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Define: Earned Value

Earned Value: The amount of money a project has already earned, based on percent complete.

Calculating earned value will let you know approximately how much money is in the bag.  Obviously, it has to pass through the Accounts Receivable department, but eventually the money will be there.  This scheme works well for projects where money tightly follows work.  In other words, you do the work, and the money follows soon after.  While that’s often true of service-based companies like consultancies, it is not always true of manufacturing projects.

When a company manufactures goods, there is a much longer pipeline to cash.  Money does not tightly follow work.  You develop the product, test it, manufacture it, test it again, market it, sell it, and then your customer pays.  That process can take months or years.  So earned value is not as tangible.  And, there is the upside of selling the same design for several years.

Standard Time® calculates earned value based on Actual Work times the Client Rate.  Obviously, this is very tightly connected to the work you perform.  Every hour means billable time.  For consultancies, this matches reality pretty closely.

–ray

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How To: Set Working Time in MS Project

Microsoft Project offers calendars that can be used to set the working hours for a project and the resources working on it.  In other words, you can set the base calendar for the project, and then override that with resource work times.  This post discusses how to set the working time in Microsoft Project.

The following steps will illustrate the effect that working time has on a task in a Microsoft Project file.

Set up a new task:

  1. Enter a new task
  2. Enter 8 hours for the Duration
  3. Enter your Name as the Resource
  4. You will notice that the task occupies one day  See below.

 

 

 

To change the base calendar for the project:

  1. Choose Tools, Change Working Time
  2. Choose “Standard (Project Calendar) from the dropdown
  3. Hold down the control key and select all the working days of the month
  4. Remove the 1:00 PM – 5:00 PM hours (to make half days)
  5. Notice that the calendar has changed to show your new choices
  6. Click OK, and notice that your task Gantt bar has gotten longer to accommodate the fewer hours per day.

 

 

To change the individual work hours for the resource:

  1. Choose Tools, Change Working Time
  2. Choose your name from the dropdown
  3. Click on the second day of the task
  4. Hold the control key down and select three days
  5. Click the “Nonworking time” choice to signify a vacation
  6. Click OK, and notice that the task has gotten every longer

 

 

–ray

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Accuracy is a Necessity

I had the misfortune of incorrectly accusing a vendor, one of my company’s main suppliers, of neglect. It turns out…they weren’t neglectful at all!  I was wrong and had received bad information!!

I worked in the new product engineering group with a company that sold a lot of knick-knacks, similar to what you find in card shops like Hallmark.  We did catalog sales without a storefront.  My company had tens of millions in annual sales.  Part of my job was creating a new quality control program to improve the products we purchased from our manufactures.

One bright day I sat across from our main supplier and delicately challenged them on a few quality issues we had found in one of our recent audits.  You can only imagine my embarrassment to find that the product I trashed, was not theirs!  An auditor on the QA Team had incorrectly identified this problem product with the wrong vendor!  I had discussed three products in total, two of which belonged to them, the third did not.  Rather than making progress and improving the two products correctly identified as theirs, I spent the better part of two hours mending fences and eating crow.

Needless to say I had a long discussion with the auditor that filed the flawed report.  We put in place procedures to double check and verify products and correctly assign them to the right vendor.  I learned a valuable lesson that day.  Accuracy is important and usually doesn’t take much effort.  This was a lazy mistake that nearly brought down a 10 year relationship and wreaked havoc for thousands of other people.

Whether it is simple or complicated…having solid accurate information is a must.

 

–Warren

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Why Enterprise Software Must Be Sexy

I’m going to put in my two cents regarding the sexification of enterprise software.  The argument of whether enterprise software needs to be sexy (to keep up with consumer products) is still on the table.  See the CIO article below.  I vote “Yes” and here’s why…

CIO article by Brian Watson: Newer innovations like software as a service, Web 2.0 and mobile applications are broadly available to those outside the IT department. For those consumers of business software, freshness and flash are key selling points.
http://www.cioinsight.com/c/a/Foreward/Why-Enterprise-Software-Must-Be-Sexy/

Enterprise apps are made to serve a specific purpose.  They track project time (like Standard Time®) or access human resource records (like SAP®), or any number of specific jobs.  People use them every day, and their value lies in the depth of service they provide.  Apps that do a lot, command the big bucks.  Try to replace them, and you’ll have a huge battle.

But still, people have to use them every day.  And if they don’t like them, they gripe.  That huge battle to replace them suddenly looks pretty small compared to dealing with unhappy employees.   No big app can last forever in the face of employee dissatisfaction, regardless of its value in the enterprise.

And guess what?

All those employees have consumer items they compare the enterprise apps to.  Cell phones, big screen TV’s, PDA’s, cordless phones, etc.  They begin to expect the big enterprise apps to employ some of the sexy usability enhancements they find in their personal consumer items.

Think about it…  Would you rather use an enterprise app with 80’s-style “VCR” controls or those of your cool new MP3 player?  That’s why enterprise apps need to be sexy.

 

–ray

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Outsourcing: Buying Time

For product development teams, outsourcing almost always means “buying time.”  Every project has three aspects in contant tension: Time, Cost, Quality.

1. If you want to save time and get your product to market faster, you can pay more (cost) or make a smaller product (quality).

2. If you want to spend less money, you can delay the delivery date (time) or cut features (quality).

3. If you want a high quality product, you can spend more money (cost) or wait for it to mature (time).

Outsourcing clearly cost’s money.  So why do it?  To get your product to market faster, that’s why.  You are spending the money now, so that you can recouperate it earlier.  Beat the competition to market.

No?  You’re not doing it for that reason?  You’re using India as a cut-rate development shop?  Oops, that may be a mistake.  Remember the other aspects in constant tension?  Quality is one of them…

 

–ray

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Define: Critical Path

Critical Path: A series of tasks that extend a project to its longest finish date.  Tasks that depend upon previous tasks, causing a project to finish at the latest time.

 

A project’s critical path is your longest route from start to finish.  In other words, your project cannot be finished any quicker than through this series of tasks.  Eliminate or shorten some tasks, and your project will be completed sooner.

It is valuable to analyze a project’s critical path.  Sometimes you can offload tasks to other resources, effectively shortening it.  In essence, you are turning a series circuit into a parallel circuit with multiple paths.  Any time you can do this, you are trading time for resources.  Yes, it will cost more, but you’ll finish sooner.

Consider a simple project with 1,000 hours of work, all performed by a single person.  The critical path is that single-path sequence of tasks.  Task 1, then 2, then 3, and so on…  You get the idea.

What if you added another person who could do the same work?  The project would then be completed in 500 hours, utilizing two paths.  But do you have a second person?

This is the crux of project management – juggling time, resources, and cost to maximize productivity.  Quite a game, huh?  🙂

–ray

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How to: Level Resources in Microsoft Project

This post discusses how to perform resource leveling in Microsoft Project.  Before we perform the steps, we should first define resource leveling.

Resource leveling is the act of moving project tasks so that employees are not over allocated.  In other words, tasks are moved to new dates so they are not all piled on top of each other.  This ensures that resources have steady work without gaps and without excessive demand.

Microsoft Project can perform a one-time leveling, or automatically perform it each time a task is changed.  Normally, resource leveling is most effective for projects that have tasks with constraints.  For instance, a task may be set to ‘Start No Earlier Than’ a certain date.  This constraint forces the task to start after a specified date.  Other tasks may need to be split to start before and after this task.  In fact, the example below demonstrates this exact scenario.

 

First, setup a new project:

  1. Create two new tasks
  2. Add resources to the tasks
  3. Set the task durations
  4. The tasks should look like the image below

 

 

Set a task constraint:

  1. Drag the first task to the right so it overlaps the second task
  2. Notice the task icon in the information column
  3. Double-click on the task to see the Task Information dialog
  4. Click the Advanced tab to see the task constraint

 

 

Level the tasks:

  1. Choose Tools, Level Resources
  2. Click Level Now
  3. The results will be a split task that allows the resource to work before and after the first task.

 

 

–Newshirt

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Technology…Communication Made Easy?

I once worked for a large company as a QA manager.  One day word got out that our VP of Customer Service was on the war path because damage complaints were up over 33% year to date!  It was costing us a lot of money to resend orders that were damaged upon arrival at our customer’s locations.

 I was a mid-level manager at the time and only heard rumblings from my superiors from high level meetings they attended.  I was instructed to change product packaging to hundreds of items, perform drop testing and all sorts of comparisons to reduce damage complaints.  Nothing worked.  After about six weeks of panic and fact finding no one had arrived at a reason for the problem .

Then one day I sat in on a high-level meeting.  I recalled a friend of mine that worked in our  call center telling me how we started resending new items, instead of coupons for damaged products.  It just so happened that our system calculated damage complaints based on resent items, not coupons.  I mentioned this during our meeting; we crunched the numbers and determined that damage complaints were NORMAL!  No increase had ever occurred, only the way we calculated them!!

I would have given anything to avoid those six weeks.  We invented new procedures, hired consultants and changed all of our packaging!  If only we would have talked about this before we initiated the changes!  Communication, although not always easy, is always essential.

 

–Warren

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Diamond Cutting

The four C’s of diamond cutting are Color, Clarity, Caret, and Cut.  Every stone is judged on these characteristics, and the price set accordingly.  My assertion is that these qualities also apply to the art of product development.  Engineers and Product Managers, listen up!  The value of products for your customers follows the same principles as cutting and polishing a beautiful stone.  Indulge me, and I’ll explain.

1. Color.  People expect beauty in the products they use, and will always choose a pleasing product to an ugly one.  This aspect of project development refers to the almost imperceptable touches of style you add to your work.  As left-brain engineers, we often overlook this.

2. Clarity.  Have you applied a ‘usability test’ to your product?  How clear is it?  How easy is it to navigate and complete the basic tasks?  Consider using a digital camera to study people using your product.  You’ll learn a lot about clarity and usability.

Polish: Refers to any blemishes on the surface of the diamond which are not significant enough to affect the clarity grade of the diamond. Examples of blemishes that might be considered as ‘polish’ characteristics are faint polishing lines and small surface nicks or scratches. Polish is regarded as an indicator of the quality of as diamond’s cut; it is graded as either Ideal, Excellent, Very Good, Good, Fair or Poor.

3. Caret.  Is your product full-featured?  Is there a lot of value?  Consider building it out to offer more for the money.  But listen closely to customers before launching into your build-out program.  Find out what they want, and add only those features.

4. Cut.  There a dozens of ways to present a product (i.e. cut the product features for use).  Choose an ugly one, and customers will look elsewhere.  They want new ways to approach their problems.  After all, they have exhausted all the conventional wisdom, and are looking to you to solve the real jawbreakers.  Do it, and they will reward you.

 

–ray

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What’s More Important than Web 2.0?

Blogs, wikis, and social networks top the list for collaboration tools among project team professionals, right?  After all, they bring the entire team together in ways nobody ever thought possible.  But that’s not what the latest Ziff Davis study found.  In fact, “shared project management tools” was in the top ten, up there with simple old email.  Didn’t know that?  Check out this article by Allan Alder at CIO Insite.

http://www.cioinsight.com/c/a/Research/Collaboration-Unlocking-the-Power-of-Teams/

It’s buried on page five, but the zinger quote below tells it all.  Check out the chart on page 5 too.  It tells us that products like Standard Time® really are important!  They are the ones bringing project teams together.  “Shared project management systems” ranked at #8, while “MySpace” was at #27, just above “None of the above.”

 

Shared project management systems, workflow systems, real-time document collaboration tools and knowledge management systems are considered more important than any Web 2.0 technology: They are widely used by project teams and, to a slightly lesser extent, by co-workers engaged in business processes.

I’d like to see the list of collaboration tools you find useful for your project team.  If you are not using Standard Time, what are you using?  I’d like to hear!

–ray