Uncertainty-based project planning

Abstract

Many projects executed within organizations fail due to budget and time overruns. The goals for time and budget are often related to the planning of a project. However, due to unforeseen factors the execution often deviates from the initial project planning. These unforeseen factors can be led back to the extent to which a project is susceptible to uncertainties and risks. This thesis research has investigated to what extent it is possible to improve the front-end project planning on basis of theories on project risk and uncertainty. For this purpose a framework for assessing this risk and uncertainty is developed. This framework consists of four dimensions: novelty, technology, pace and complexity. The latter is divided into three sub-dimensions: technical, organizational and environmental complexity. The research tests this framework for a specific group of companies. These are project-based organizations (PBO) that produce complex product systems (CoPS). One such company was used in this research in a multiple case study approach in which 23 cases were selected. These individual case studies included a document analysis in which the resource hours of the project administration were studied and a semi-structured interview with the project manager. After the individual case studies were performed a cross case analysis was done for the entire group of cases. The results have shown that each of the individual dimensions influences the execution of the project and thus should influence the planning in a different way. 1) Novelty influences the clarity of internal tasks and processes and therefore the planning of these relies more on estimations than calculations. The level of novelty therefore gives an indication of the required buffers in hours and timespan that will be required throughout the project. 2) Technology uncertainty influences the amount of technical iterations (design, build, and test). This uncertainty of the technical development phase should be incorporated in the planning in the form of buffers for the technical resources. 3) A higher degree of pace requires more priority from the project team. Also, teams should be smaller to work more efficient and to reduce bureaucracy and formalization. 4) The three dimensions of complexity were studied by collecting all factors mentioned in the interviews that have led to complexity in the studied cases. The complexity of a project can therefore be assessed by the factors that are applicable to that project. Even though specific factors have specific impact on the project, in general terms it has been found that technical complexity relates to the amount of technical development and coordination hours as well as time delays in the latter phase of the project. Organizational complexity relates to the efficiency of the work of the project team and the amount of internal coordination. Finally Environmental complexity has been found to have a severe impact on external coordination of the stakeholders by the project manager and possible time delays due to dependencies on stakeholders. All the empirical data and results of the cross case analysis are incorporated in a planning tool. This tool enables a project manager to assess a project front-end on the level of risk and uncertainty this project is susceptible to. It also indicates in which dimension the risk and uncertainty is situated and it gives qualitative advice on how to incorporate buffers in timespan and hours in the project planning. This tool can therefore help a project manager in developing a more accurate project planning. The main conclusions of this study are therefore that by assessing the project risk and uncertainty in this way, it is possible to develop a more accurate project planning and with this possibly enhance the project success.