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The Challenges of Calculating ‘% Complete’ in Project Management

September 13, 2012 | Author: PM Hut | Filed under: Scheduling

The Challenges of Calculating ‘% Complete’ in Project Management
By Gary Hamilton, Gareth Byatt, and Jeff Hodgkinson

Alternative title: ‘Why using percentage complete as a metric to track progress is flawed…’

As Program and Project Managers, we are frequently asked by our stakeholders (to differing levels of detail) about the status of our program or project from a timing/schedule perspective (the same is true of cost, scope, quality and other key metrics). When we want to indicate schedule progress, our most common responses are ‘Ahead of Schedule,’ ‘On Track,’ or ‘Behind Schedule.’ Using a metaphoric traffic light (which some in the US refer to as a ‘stoplight’), this means that at 90% or above, overall project health is green, 90-75% (or thereabouts) is yellow, indicating at risk but preventable if immediate action is taken, and below 75% is flagged red, meaning definitely at risk.

Overall project health can often be a subjective assessment made by the program/project manager (in consultation with the team), taking into account several elements that can be summarized as the program or project ‘Health,’ such as scope and budget compliance, schedule, risk average, team confidence, resource availability, and others.

Often, those who are requesting the information about schedule compare the project status only with the project schedule percentage or what some term the ‘PAS’ (Performance Against Schedule) – in the belief that 90% or above PAS is green (using the stoplight) and good – no worries. However, the use of percentage completion as a single gauge of the project schedule health is fraught with many limitations and risks. It is akin to your sports coach focusing purely on how well the attacking members of the team will score goals and forgetting about everyone else, or a chef baking a cake but only focusing on how much flour to use.

The primary reason that ‘percent complete’ is a poor summary of project schedule health is that it tends to be a subjective measure, proportional in its accuracy to the ability of all team members to precisely estimate the total time to complete their tasks and the value of the work complete, and the remaining work to be done. As the saying goes…

‘The first 90% of a project takes 90% of the effort and the last 10% takes another 90% of the effort…’

A secondary reason is that the schedule is particularly dependent on the status with scope, your progress in managing identified risks, and the status of your budget. People may be on time with their activities, but if the Level of Concern of a significant-rated risk is increasing or a scope change is likely, the schedule could be under pressure. Returning to our primary reason stated above, scheduled activities can be frontend or backend effort loaded. If many activities are backend loaded, the aggregate sum of the task completion can give the impression of being further ahead than is actually the case, which can be magnified at the overall program or project health assessment level. Accuracy can also be proportional to the remaining tasks versus completed tasks at any given time in the active life cycle. The more tasks remaining, the less accurate you will be (because the more likely it is that there will be changes). Of course, it’s one thing to do the work and another thing to record status into a scheduling tool in a timely and accurate manner. As the saying goes…

‘Garbage in equals garbage out…’

Small inaccuracies across many tasks can be compounded into a misleading overall assessment. It only takes one team member to fail to populate their schedule status in the project schedule or to do it incorrectly to lessen the confidence of the data as the due date for completion approaches.

Some PMs learn in ‘PM 101’ that two methods can be used to measure the status of tasks:

  1. If a task has not started, it is a 0% but as soon as it begins, it gets a 50% and, when fully completed ,100% (this is a basic concept often used to calculate Earned Value)

  2. The actual estimated completion % is provided based on the assessment of effort completed and remaining.

With Method #1, there is much ambiguity of the real effort. A task that has commenced may be 1% complete or 90% complete, yet it is reported to have a 50% completion status. Depending on the size and duration of the task in question, a gap in one task can offset several others; as a result, the actual project completion rate of progress is a ‘best guess.’ Method #2 can provide more detailed accuracy, but is dependent on the task owner’s subjective judgment and ability to capture progress correctly. Estimating activity and task durations is difficult, and unforeseen challenges can occur at any time which can skew the real accuracy. As the American author Tom Robbins has been quoted as saying…

‘Using words to describe magic is like using a screwdriver to cut roast beef…’ Tom Robbins

What we need to agree on is this: how accurate does the percent complete need to be when it is communicated to stakeholders? It is usually (but not always) human nature to communicate positively rather than negatively about progress. Given this, is your % complete estimate higher than you are saying it is? The answer depends on how all tasks are being measured. Accurate reporting is a skill.

‘Work in Process has no Customer Value only Cost…’

Regardless of whether the work in progress is 1% or 99% complete, that number has no inherent value to the customer. Think about it; would you like to have 50% of an automobile, a building, or a software program? Customers only find value in completed, working deliverables. Therefore, project managers should not use percent of total project as a blanket indicator of the project status.

How can we as PM practitioners circumvent the challenges of providing percent complete progress and provide a clear picture to our stakeholders? A key success factor is to consider things in their entirety – don’t just ‘follow the approach that only looks at the attacking options.’

First, consider making the task estimated completion estimates ‘backward-looking.’ In other words, with respect to the overall task, aim to accurately estimate what has been done to date. Then look at what should be done by looking forward to accurately assess what must still be done to complete the task. What is the correlation? We could focus this article on TOC (the Theory of Constraints), but the concept we wish to point out here is to ‘forward focus’ on the remaining work and reassess your judgment if concerns (e.g. risks, potential changes to scope) are identified. Assuming that you do not want the task end date to be changed, the estimate for the remaining effort increases and therefore the actual % complete for the schedule update date requested is reduced but is most likely more accurate.

‘The farther backward you can look, the farther forward you are likely to see…’ Winston Churchill

In conclusion, ‘percent (%) complete’ is one of several health factors used for a program, a project or its sub-elements. Your communication of this metric (or KPI) should be based on the sum of several areas or project/program metrics such as schedule compliance (SPI), cost compliance (CPI), risk overall average, scope compliance (no planned changes with respect to the schedule), and team and a PM’s overall trending assessment.

Gareth Byatt, Gary Hamilton, and Jeff Hodgkinson are experienced PMO, program, and project managers who developed a mutual friendship by realising they shared a common passion to help others and share knowledge about PMO, portfolio, program and project management (collectively termed PM below). In February 2010 they decided to collaborate on a five (5) year goal to write 100 PM subject articles (pro bono) for publication in any/all PM subject websites, newsletters, and professional magazines / journals. They have been translated into Arabic, Czechoslovakian, French, German, Italian, Spanish, Portuguese, and Russian and published on websites in 23 countries including Australia, Brazil, Canada, Chile, Czech Republic, France, Germany, Hong Kong, Italy, India, Jamaica, Netherlands, New Zealand, Nigeria, Pakistan, Panama, Poland, Russia, Trinidad, Turkey, UK, USA, and Sri Lanka. Their mission is to help expand good program and project management practices by promoting the PM profession, to be a positive influence to the PM Community, be known as eminent influencers of PM practices, and in earnest hope readers can gain benefit from the advice of their 65+ years of combined experience and expertise and include the expertise of co-authors who write with them on certain articles and subjects. Along with writing articles, each also champions a role in the overall writing program collaboration process:

  • Gareth manages all requests for additional guest author collaborations
  • Gary manages the article development tracking and readership metrics
  • Jeff manages the article distribution and new readership demographics

Each can be contacted for advice, coaching, collaboration, and speaking individually as noted in their bios or as a team at: Contactus@pmoracles.com

Gareth Byatt is Head of the Group IT Portfolio Management Office for Lend Lease. Gareth has worked in several countries and lives in Sydney, Australia. Gareth has 16+ years of project, program, and portfolio management experience in IT and construction. He can be contacted through LinkedIn.

Gareth holds numerous degrees, certifications, and credentials in program and project management as follows: an MBA from one of the world’s leading education establishments, a 1st-class undergraduate management degree, and the PMP®, PgMP®, PMI-RMP®, & PRINCE2 professional certifications. Gareth is currently a Director of the PMI Sydney Chapter, he is the APAC Region Director for the PMI’s PMO Community of Practice and he chairs several peer networking groups.

He has presented on PMOs, portfolio and program and project management at international conferences in the UK, Australia, & Asia including PMI APAC in 2010. Email Gareth: Email Gareth: gareth.byatt@gmail.com

Gary Hamilton has 16+ years of project and program management experience in IT, finance, and human resources and volunteers as the VP of Professional Development for the PMI East Tennessee chapter. Gary is a 2009 & 2010 Presidents’ Volunteer Award recipient for his charitable work with local fire services and professional groups. He has won several internal awards for results achieved from projects and programs he managed as well as being named one of the Business Journal’s Top 40 Professionals in 2007. Gary holds numerous degrees and certifications in IT, management, and project management and they include: an advanced MBA degree in finance, and has the PgMP®, PMP®, PMI-RMP®, PMI-SP® , CAPM®, Project+, PRINCE2, ITIL-F, MCTS, MCITP, and SSGB professional certifications. Email Gary: Gary@PMOracles.com or contact him through LinkedIn.

Jeff Hodgkinson is a 32 year veteran of Intel Corporation, where he continues on a progressive career as a program/project manager. Jeff is an IT@Intel Expert and blogs on Intel’s Community for IT Professionals for Program/Project Management subjects and interests. He is also the Intel IT PMO PMI Credential Mentor supporting colleagues in pursuit of a new credential.

Jeff received the 2010 PMI (Project Management Institute) Distinguished Contribution Award for his support of the Project Management profession from the Project Management Institute. Jeff was also the 2nd place finalist for the 2009 Kerzner International Project Manager of the Year AwardTM. He lives in Mesa, Arizona, USA and volunteers as the Associate Vice President for Credentials & Certifications and the Agile CER (Chapter Engagement Representative) for the Phoenix PMI Chapter. Because of his contributions to helping people achieve their goals, he is the third (3rd) most recommended person on LinkedIn with 555+ recommendations, and is ranked in the Top 60 (currently 54th) most networked LinkedIn person. He gladly accepts all connection invite requests from PM practitioners at: www.linkedin.com/in/jeffhodgkinson.

Jeff holds numerous certifications and credentials in program and project management, which are as follows: CAPM®, CCS, CDT, CPC™, CIPM™, CPPM–Level 10, CDRP, CSM™, CSQE, GPM™, IPMA-B®, ITIL-F, MPM™, PME™, PMOC, PMP®, PgMP®, PMI-RMP®, PMI-SP®, PMW, and SSGB. Jeff is an expert at program and project management principles and best practices. He enjoys sharing his experiences with audiences around the globe as a keynote speaker at various PM events.

Email Jeff: jghmesa@gmail.com or at: phxpmicredentials@yahoo.com

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This entry was posted on Thursday, September 13th, 2012 and is filed under Scheduling. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1 person has left a comment

Thank you for a very informative article.

I just have one question, using Method #2 in your article, how do you calculate how much percentage is a task on schedule or behind schedule with no cost involved but just the following information?

1. Current Date
2. Start Date
3. End Date
4. ActualEstimatedPercentCompletion

Thanks for any input you can give.

Jojo Rodriguez wrote on September 14, 2012 - 4:06 pm | Visit Link

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