SMELL A RAT
70A glance at a report may give you the feelings that there is something wrong. In my long career as a Head of Project Supervision, I pointed out in-efficiency or dishonesty in many cases. After retirement, I started teaching Project Management at University Level and experienced gained in the past helped me better explain the concepts.
Case Study Method is a good way of teaching. Recently, I gave a case where a project failed to meet time and budget estimates. Consequently, the Project Manager was fired. The case was circulated to the students with following ending:
“Suppose you were the Project Manager, was there any justification in firing you?”
The response was not encouraging as some students commented without any pre-requisite calculations and some became un-necessarily defensive. Changing the question to “Do you think Mr. X was rightly fired”, might have brought better results.
In brief, a Project Manager had reported that the construction could not be completed in time as initially there was no paved road right upto the site. So the construction materials such as iron & cement had to be off-loaded 100 meters away and manually brought to the site. The work was speeded up only when the road was connected to the site. Because of this, the completion took four-month instead of two-month as originally envisaged.
Apparently, this appears to be a valid reason. But it must be validated by subsequent events: (i) the activity should show a sharp increase and (ii) unit cost should come down. But this was not what actually happened as shown below:
Modern way of constuction
So the project Manager was dishonest and he was rightly fired.
Of course, there is an early warning system for the Project Supervisors but they concentrate on major delays or over-budget cases. Depending upon inflation and general infrastructural problems, a provision of 10% to 15% is considered normal. A dishonest manager would take the benefit of such provisions.
Full version of the case is given below:
How projects are tracked?
In real life, a progress report is prepared on weekly or monthly basis. It gives siginifant information such as further time and cost for completion. It forewarns the Project Manager how much a project would be delayed or experience cost over-runs.
In this way, the project manager can take appropriate action to save the situation. The normal presentatin is shown in the sheet below:
SPREAD SHEET SHOWING IMPORTANT INFORMATION
WORK SHEET
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Very interesting. I imagine this example is based on a real event and happens often in the business world. The lesson I learned is that a certain ammount of trust is required in a project of this type, but that a balance of feedback and reporting is required to keep track. The Chief executive lost control of the project manager because he required fewer and less detailed reports allowing the project manager to act on a corrupt tendency.
Thanks for your comments. You are right. The project manager was able to hide his manipulation as he knew that so long as remains within a certain limit, it would not be noticed by the Chief Executive. Had there been meticulous monitoring, the dishonesty would have been discovered in the first month.
I think managers go by "Management by Exception". It means as long as situation is within threshold of a junior, no intravetion is required. The junior knows this too and would try to fleece moderately.
Once I was head of a training institute and I thought that the trainees be given calculators when they are participating in a training program. I went to market and found out that a basic calculator was available for Rs.80/ (that was long ago). I ask the purchase manager to buy 50 calculators adding that it would cost a total of Rs.4,000. Normally, he was very efficient but in this case he showed no interest. When pressurized he said, "Please buy it and get re-imbursement from me". If he were to buy himself, the bill would have been around Rs.5,000.
I agree. Unfortunately, it is true. This confirms Tom Phillip observation that trust is most important and that an employee should reciprocate it with honesty. The popularity of Out-sourcing is due the fact that a business knows for sure how is to be paid and when even though doing in-house seems cheaper.
THANK YOU FOR SHARING THIS ARTICLE AND VERY INFORMATIVE FOR ME. THANKS ONCE AGAIN
I found this case really informative.
an intersting study sir
THANK: I WAS READ A ARTICLE SO, I GOT GREAT KNOWLEDGE AND IT ARTICLE IS VERY INFORMATIVE AND I UNDERSTAND THE BCWP,BCEP,ACWP.
Thank you sir i read this articale carefully its very informative.
Indeed an interesting case study and equally interesting explanation! Thanks a lot to Mr. Hafeez for taking out time and describing each and every aspect. I'll recommend other fellows to go through it.
Regards,
Fahad Khan
Thank you Sir for sharing such an informative casestudy now i can understand BCWP,BCEP,ACWP.
I had some confusions in calculation of Further Time, but not after going through the calculation of Further Time in the worksheet.
Thanks Sir
Very informative article!
Dear Hafeez It is really appreciative to collect information about some important articles in project management through hubpages with an affiliation of your own case studies with illustrative examples.
I have little confusion at over run time column . On the 1st and 2nd month 32 days are calculated with the help of the formula
= bcws - bcwp / budgeted cost per day But on the 3rd month with the above formula does not give 46 days ..
Illustration 1st month = 5000000-2250000 / 166667 = 16.49 ( 17 round off)
2nd month = 10000000-4750,000 / 166667
= 31.49 ( 32 round off)
3rd month = 10000000-7350000 / 166667
= 15.89 ( round off 16 )
On the third month time over runs by 46 days as mentioned in above table but through calculation it gives 16 days .
I would appreciate if you remove my confusion for the 3rd month time over runs
Best Regards
While I was practicing this question, I came across the same issue as described by Emran Ali. Can you please explain how the TIME OVERRUNS for 3rd and 4th months have been calculated?
Hi Emran Ali & Fahad Khan,
The problem has arisen only because the actual duration has far exceeded the budget-duration of 60 days. To put it simply, if a project was to be completed in 60 and it has taken 120 days, it is obviously delayed by 60 days.
Emran has calculated 16 days for the third month. Because the project which was to be completed in 60 day has already taken 90 days and is still incomplete the delay would be 16, as calculated, plus 30 days making it to 46 day.
You may extend the formula as follows:
(BCWS-BCWP)/ WORK per Day +(ACTUAL DAYS - BUDGETED DAYS)
For the first two months, actual days and budget days would remain the same i.e. 30 in the first and 60 in second month. In the third month, actual days would increase to 90 (30*3) while budgeted days would remain at planned level of 60 days. This difference is in addition to difference of 16 days as calculated by Emran.
Hope it would make clear. Please do not hesitate to ask further explanation.
Thanks for such a nice articale
hello, my respected and worthy teacher i have read your case study it was extremely effective for me.
hello sir,
you have been sending us valuable articles this case was also worth reading and it increased my knowledge.
Thanks a lot to Mr. Hafeez for clarifying the issue i.e. how the time over run in the 3rd month is calculated. Now I've understood the whole topic completely.
Regards,
M. Fahad Khan
Dear Hafeez
i am gratified to see your explanation , though an explained formula in your reply has certainley explicated how 3rd month time over run is to be calculated . Your Gratitude through articles have erudite me from every aspect in terms of developing and giving me better understanding .
Best Regards
Thanks for the compliments.
Sana A Razzak
Dear sir ,
i also got confusion regarding the issue of moths crossing the actual limit (3rd & 4th month) in time over run, as emran asked .now i m fullay clared about that and have no confusion.
thanks for giving us a time to clear the students problem
SMELL A RAT!
this is really an interesting case study...
there was some confusion regarding calculation.. but as i gone through the old posts of your students the way you have explained it really cleared the concepts of month crossing the actual limits
thanks alot for sharing such a practical information with us i have really learned alot through your hub pages thanks alot onces again
dear sir u have cleared all my doubts thanks for explain it
asifkamran 2 years ago
good study