Improving the Accuracy and Timeliness of Project Outcome Predictions, Version 1.1
Predictability, the condition to produce early and accurate forecasts for cost and schedule measures at completion and needs to have a high degree of accuracy and reliability in order to have meaningful benefit to the sponsoring organizations.
The research team concluded that the processes and tools utilized to generate, communicate, and revise a project’s cost and schedule forecast are as diverse as any other techniques used within the profession to address challenges. Importantly however, the research revealed that there were distinct and identifiable differences between effective and ineffective projects with respect to the practices they use to forecast final cost and schedule outcomes. The research team categorized these practices as follows:
- Human behavior and organizational culture
- Project characteristics
- Forecasting practices
- Management processes
These four categories form the basis of the team’s Four-casting model. Of the four, human behavior and organizational culture was the category statistically shown to have the greatest influence on predictability. The four categories of practices are presented in detail in IR291-2 including key “takeaway” findings, a list of potential predictability “derailers,” and recommended mitigation actions.
Project team performance needs to be evaluated based on the team’s ability to mitigate cost and schedule deviations through the early and accurate prediction of cost and schedule outcomes, as opposed to the prevalent evaluation of a team’s performance based solely on the magnitude of such deviations at project completion.
RT-291 developed a numerical index to measure cost and schedule predictability performance. This resource, the Predictability Index, indicates a project team’s past ability to proactively and effectively address the events and surprises that have affected the accuracy and timeliness of its forecasts. Indeed, project teams cannot eliminate surprises (or all bad news), but they can—and should—mitigate the effect of such surprises with their early recognition, transparent and candid reporting, and full appreciation of the events that influence effective forecasting. To this end, project stakeholders are strongly encouraged to consider the importance of human behavior and organizational culture as explained in the research findings and as emphasized in the proposed predictability practices. (RS291-1, p. 47)The disruptive nature of change on owner and contractor project performance presents itself in varied form, frequency and intensity. While some companies categorize changes through many individual change reasons grouped into key types of change, others choose to catalog changes through only a few individual reasons. Reported change reasons also reflected the different approaches to business taken by distinct industry sectors. Differences were also observed between owner and contractor organizations:
- For owners, changes associated with scope, work planning and execution disrupt predictability the most
- For contractors, changes associated with scope and control functions were found to be the most disruptive
In its effort to categorize changes that affect predictability, the team identified 36 distinct change reasons, grouped into 10 types of change: (RS291-1, p. 33)
- Scope changes
- Standard, regulatory, and legal requirements
- Engineering design
- Work planning and execution
- Commissioning and start-up
- Control functions
- Vendor/supplier and procurement
- Economic conditions
- Legal and social conditions
- Force majeure
