Over the years, CII has conducted significant research to analyze and measure risks during project development and to develop tools to help predict potential risks to key project outcomes (cost, schedule, quality/operability, safety, stakeholder satisfaction). Perhaps the best known of these is the CII Project Definition Rating Index (PDRI), which is used by owners and contractors during front end planning. Once the PDRI exercise is completed, most tracking during project execution is accomplished with traditional measurements (cost and schedule variance, critical path tracking, performance ratios, earned value, etc.).
Traditional tracking has three drawbacks: 1) the requirement of hard data, 2) the cost of collecting data, and 3) the processing time to report results. The Research Team decided that what was needed was a method, once the front end planning and risk analysis have ended, of identifying indicators that most likely will lead to project success. To supplement traditional tracking, the Team decided to develop a new tool, the Project Health Indicator or PHI, that does not rely on hard data and has broader application because management can utilize it at all levels of the organization to assess project “health.” The tool is for use during the detailed engineering, procurement, and construction phases of a project.
The tool relies on “Leading Indicators” which the Team defined as: Fundamental project characteristics and/or events that reflect or predict project health. Revealed in a timely manner, these indicators allow for proactive management to influence project outcomes.
There are two limitations in using the PHI Tool. The first limitation is that the data collection for the research was generally limited to CII member organizations. Therefore, the projects used in the research were mainly from the industrial and building sectors. The second limitation is that the PHI Tool will not actually measure and quantify a specific amount of risk for a project, but will forecast the potential risk that certain project outcomes will not be met.
4 : Implementation Tool #1
IR220-2,
Project Health Indicator Tool
The PHI is an Excel spreadsheet based tool and contains two outputs. The first output is the score that reflects the risk related to project outcomes, or a measure of project health. The second output is the correlation to project practices to help identify areas that should be improved to lower the risk of undesirable outcomes. The PHI tool is intended as a complement to traditional project controls and as an early warning system to identify problems earlier tan by traditional methods.