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PM World Today May 2010 (Vol XII, Issue V)

PM WORLD TODAY FEATURED PAPER MAY 2010

Project Nonlinear Scaling and Transformation Methodology and TRANSCALE Tool


By Pavel Barseghyan, PhD
Abstract Statistics show that the percentage of failed projects is still at unacceptably high levels, which leads to colossal financial losses. One of the main reasons for this state of affairs is the low accuracy of estimates of the project during its planning and execution. In turn, the low accuracy of estimates of parameters of projects is explained by the lack of a consistent quantitative theory of projects. This state of affairs calls for a radical improvement in the quality of new generation methodologies and tools for project management. The comprehensive solution to this problem requires the development of new theoretical concepts and quantitative theories in the field of project management, following the experience of physics, mathematical biology, and other generally accepted quantitative sciences. Such theories in the field of quantitative project management could form the basis for a new generation of methodologies and tools for planning and execution of projects. If we carefully analyze the background and reasons behind successful tools in various fields of human activity (aircraft, chip design, and others), it is easy to see that the basis for universally recognized successful tools includes fundamental quantitative theories. Outstanding examples of the above can be seen in the simulation tools for electronic circuits based on Kirchhoffs Laws and tools for the synthesis of logic circuits based on Boolean algebra. As is known, such universally quantified theories of project management are simply not available, increasing the vulnerability that estimation tools developed in this area are based on the shaky foundations of statistical estimates of the parameters of projects. The goal of this paper is to partially fill this gap by developing tools for project management of a new generation, designed for nonlinear scaling and transformation of projects. The new tool TRANSCALE is based on the quantitative theory of the projects, published in [1] and [5]. Key words: Nonlinear scaling of projects, transformation of projects, project space, graphical presentation, multi-dimensional flat presentation of project laws, change management, software tool.

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PM World Today May 2010 (Vol XII, Issue V)

Introduction Traditionally the field of project management relies on its two branches. These are the qualitative and quantitative methodologies of project management. The fact that in many different fields of human activity the percentage of failed or somehow accomplished projects is very high suggests that these two branches of project management have many unsolved problems which are causing huge financial losses. If we consider this situation in more detail, it is easy to see that industry relies heavily on qualitative methods of project management, because they are more reliable in comparison with quantitative methods. In this sense, the reliability of existing quantitative methods of project management is far lower, so they do not have enough importance for industry. Moreover, industry refers to quantitative methods of project management with marked suspicion. This attitude will continue will continue as long as there is no real progress. If we approach this issue from the perspective of the potential development of methods of project management, it turns out that in this sense quantitative methods have a great potential. Despite the fact that qualitative methods for project management continue to evolve, they mostly have been exhausted. As for the methods of quantitative project management, it should be noted, that enormous financial investments made in this direction during the last 40-50 years did not yield tangible scientific and practical results. This area of knowledge, as it was 40-50 years ago, remains in its infancy so far. It should be emphasized that a large number of written books, dissertations, reports, and articles cannot be a criterion for scientific progress in this direction, because the accuracy of quantitative methods in PM remains unacceptably low. Genuine scientific progress in this area requires the creation of such a quantitative theory of projects, which will establish functional relationships between parameters of a project without the use of statistical methods. Such a quantitative theory of projects in its essence and structure must conform to known physical theories, in particular, classical thermodynamics. Once again, we note that a positive feature of such theories is that they are based on facts, but at the same time, they are invariant with respect to specific data. Created over the last 40-50 years, the currently dominant methods of quantitative project management have tried and are trying to find the relationships between the parameters of

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PM World Today May 2010 (Vol XII, Issue V)

projects by means of statistical methods. The purpose of these methods is to evaluate and predict the parameters of projects during their planning and execution. The only way to assess the quality of these methods is to assess the values of estimation and projection errors. As is well known from many sources, the magnitude of these errors is so high that it makes no sense using them for practical purposes. Moreover, these methods can cause confusion in dealing with serious practical problems. This also explains the attitude of industry to the current methods for quantitative project management. It would seem that this state of affairs in the field of quantitative project management has long had to develop the right attitude to all these methods, as long discredited statistical approach in this area. But the inertia is a great strength and the march of aforementioned monographs, articles and reports continues successfully, as all this continues to be a source of welfare. It turned into an unnecessary tradition to blame all the failures of quantitative project management on the notorious chaos. Undoubtedly, the randomness in the organization of project activities adversely affects the state of things, but surely, we can thwart chaos in conditions of low randomness, too. Here, the main cause of failure is not the chaotic nature of human labor, but ignorance of its fundamental laws. As a consequence, we do not know the fundamental functional relationships that exist between the parameters of a project, and which do not depend on the will of people. Therefore, the main purpose of new quantitative theories and methodologies for project management should be the study of these fundamental functional dependencies by means of parametric mathematical models and theories. Such models and theories proposed in (1) and (2), where with the aid of the equation of states of the project and objective functions of the project, the functional relationships between the parameters of the project have been obtained. The purpose of this article is to continue the research begun in [1] and [5], and describe the range of practical applications for the developed models and theories of project management. For the explanations, the TRANSCALE tool that has been developed for nonlinear scaling and transformation of projects is used. State equation of projects Planning and execution of an arbitrary project is accompanied with a number of scaling and transformation procedures. For instance, increasing the reuse level for a project, one can decrease the complexity of the project. This kind of change accompanies several nonlinear changes of the project duration, team size and team productivity.

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PM World Today May 2010 (Vol XII, Issue V)

Another example of the nonlinear transformation of a project is the change of its planned duration which is accompanied with changes of project total effort, its team size and team productivity. These examples indicate that for the analysis of such situations we need new approaches, because contemporary quantitative PM does not have adequate answers for these kinds of challenges. For the analysis of these kind of problems lets consider the statement from [1], consisting of the fact that regardless of the nature of an arbitrary project, its complexity, size and degree of difficulty can be described by the following balance equation of state. S*D (1) P Here N av - is the average team size, T - is the project duration, P - is the team productivity, S - is the project size, D - is the project difficulty. N av * T = Accounting for the level of project reuse R the new size of project will be S - R and the corresponding state equation of project will have the following form ( S R) * D (2). P This equation can be derived in two alternative ways: First - by the definition of project effort and second - by the definition of project throughput. N av * T = 1. Project effort can be defined as W . (3) P Here W - is the project complexity or the work amount needed for the completion of project. E = N av * T and E = From here we can have N av * T * P = W 2. Similarly the project throughput H can be defined as H= W T (5) (4)

The same throughput which is the number of the work or complexity units done by the team per unit time can be defined as the product of the team average size and team productivity H = N av * P (6)

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PM World Today May 2010 (Vol XII, Issue V)

From (5) and (6) follows the same relationship (4), which represent itself the balance or state equation of an arbitrary project. Nonlinear nature of the scaling and transformation procedures of projects The equation of state of the project is universal in nature and may contain complex functional relationships between the parameters of the project. This versatility allows the use of this equation for the nonlinear analysis of scaling and transformation of projects. But the simple appearance of the balance equation (4) is misleading, because the equation does not directly reflect the functional relationships between the pairs of project parameters. In particular, there are no linear relationships between complexity W of the project and other parameters. Such linear relationships can only be created artificially, while maintaining the other parameters constant. For example, it is meaningless to talk about a linear functional relationship between complexity of the project W and productivity P , regardless of the fact that maintaining constant in the equation (4) values N av andT , it is possible to artificially achieve that. But as we know, with the increasing complexity W of the project the team productivity P decreases, because it is accompanied by an increase in the average size of the team N av . We can give similar examples for the quantities N av and T , thereby showing that no linear relation exists between the complexity of the project W and the values N av and T . For a more detailed understanding of the state equation of projects (4), we note that by its nature it is similar to the equation of the state of ideal gases in physics. This equation has the form [2]. P *V = n * R * T (7)

Here P is the gas pressure, V is the volume, n is the amount of substance of the gas, R is the universal gas constant, and T is the absolute temperature. It is known that there exists a linear relationship between temperature T and gas volume V at constant pressure P (Charles Law). Similarly there exists a linear relationship between temperature T and gas pressure P at constant volume V (Gay-Lussacs Law). The condition of constancy of temperature leads to the hyperbolic relationship between volume V and pressure P of gas (Boyles Law).

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PM World Today May 2010 (Vol XII, Issue V)

But in general case, when there is no any restriction on the parameters of gases, the relationships between them are much more complicated. On the basis of the state equation (7) of gases alone it is impossible to obtain relationships between the parameters of gases. For that purpose one can use fundamental principles of thermodynamics [3] and thermodynamic potentials [4]. The peculiarity of these principles is that they rely on the experience in a broad sense of the word, but statistics in such generalization is not directly used. Similar principles are applicable for obtaining fundamental relationships between project parameters too [5]. The nonlinear theory of project scaling and transformation For effective project management it is necessary to know those functional relationships that objectively exist between the project parameters and which do not depend on the will of people. In this sense, the new mathematical theory of project management, presented in [1] and [5], creates a reliable basis for estimates and predictions of projects during their planning and execution. These methods of assessment and forecasting can be applied during the project work for the purposes of what-if analysis, and as new methods of project data mining. A new mathematical theory of projects due to its universality also can serve as a basis for building a new generation of project management tools. Project scaling and transformation tool: TRANSCALE This tool is designed for quantitative analysis of scaling and transformation of projects during their planning and execution. The tool can also be used for the purposes of program management and project portfolio management to optimize resources. TRANSCALE tool can be used for: Project nonlinear scaling (meaning analysis of different options of the same project with different complexities and reuse levels); Project nonlinear transformation (meaning analysis of different implementation options for the same project with different planned durations and team sizes); Project data mining without using statistical methods, including mining of sparse project data; Various what if analysis by means of project scaling and transformation for project classification, grouping and similarity analysis; Project change analysis and management.

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PM World Today May 2010 (Vol XII, Issue V)

Graphical representation of projects and functional relationships in TRANSCALE The tool has wide possibilities for graphical presentation and analysis of project data including what-if analysis of projects. Briefly consider these possibilities of the TRANSCALE tool. Graphical presentation of projects with TRANSCALE has two modes: 1. Individual projects and groups of projects can be presented in two-dimensional project space, where the axes are pairs of project parameters (Fig.2). 2. Individual projects and groups of projects can be presented in flat multi-dimensional project space (Fig.4). These graphical representations are constructed on the basis of functional relationships between the parameters of the projects obtained in [1] and [5]. Lets consider the main results of [5] for the case when project complexity is a constant equal to W0 . If the case is discussed when the project has a constant complexity W0 , among the rest of its four parameters (i.e. the effort E , the average number of people N av , the duration of the project T and the productivity of the team P ) there are possible twelve functional dependencies, six of which are the inverse function of the remaining six. Consider only the first six functional relationships, since the remaining six are symmetrical with respect to them. These functional relationships are: 1. 2. 3. 4. 5. 6. Team productivity vs. Team average size; Project duration vs. Team average size; Project total effort vs. Team average size; Project total effort vs. Project duration; Team productivity vs. Project duration; Project total effort vs. Team productivity.

In Fig.2-1 - Fig.2-6 are presented the screenshots of the relationships between project parameters for one project in two-dimensional project space.

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PM World Today May 2010 (Vol XII, Issue V)

N av

N av

Fig.2-1 E

Fig.2-2 E

N av

Fig.2-3 P

Fig.2-4 E

Fig.2-5

Fig.2-6

Fig.2 Six relationships between the parameters of the project for a single project Fig.3 contains the same relationships for the group of five projects. All six figures represent itself the screenshots of TRANSCALE tool for five arbitrary projects. Attention should be paid to the functional relationship between team productivity P and its average size N av . For all five projects teams, productivity is a slowly decreasing function of the average team size. But every team has its own, distinct from others, productivity, which depends on the specific conditions of work. P T

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PM World Today May 2010 (Vol XII, Issue V)

N av

N av

Fig.3-1 E

Fig.3-2 E

N av

Fig.3-3 T

Fig.3-4 E

Fig.3-5

Fig.3-6

Fig.3 Six relationships between project parameters for the group of arbitrary five projects

Multi-dimensional flat presentation of projects in the project space

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PM World Today May 2010 (Vol XII, Issue V)

Presentation of projects in the two-dimensional space has limited capabilities, because it does not allow observing and analyzing the influence of change of the presented parameters on the other invisible parameters of projects. From this point of view it is very convenient to use for project graphical presentation an artificially flattened multi-dimensional project space (Fig.4). The basis of such a flattening is the fact that all parameters of the project have positive values and therefore with the aid of two axes one can represent four parameters of the project.

Fig. 4 Four-dimensional flat presentation of one project with relationships between its parameters Fig.4 presents a single project with its four coordinates (effort, duration, average team size and team productivity). This picture also contains graphs of four functional relationships between the parameters of the project.

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PM World Today May 2010 (Vol XII, Issue V)

Fig.5 Dialog box for choosing coordinate axes and changing TRANSCALE modes In this multi-dimensional mode, the TRANSCALE tool enables one to change the coordinate axes, as well as the scale of each axes. This is done using a dialog box, which is shown in Fig. 5. Each axis can be changed by selecting one of the project parameters from the list below. 1. Team Average Staffing ( N av ); 2. Project Duration (T ); 3. Project Total Effort ( E ); 4. Team Productivity ( P ); 5. Project Complexity ( W ). As an example Fig.6 illustrates the change of axes for the same project that is presented in Fig.4.

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Fig. 6 Another multi-dimensional flat presentation of the same project with functional relationships between its parameters

Fig.7 Group of projects in the system of [ N av ,T , E , P ] coordinates with the functional relationships

Fig.8 The same group of projects in the system of [ P , N av ,T , E ] coordinates with the functional relationships

Project change presentation with TRANSCALE Project change analysis is the most important feature of TRANSCALE. Lets consider different examples of project change quantitative analysis for two modes (two-dimensional and multidimensional) of the tool. Graphical interpretation of any changes in the project leads in TRANSCALE to the sliding of the project point along with functional trajectories in the project space. For the multi-dimensional

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case, an arbitrary change in the project causes simultaneous sliding of four project points along with four functional dependencies on the flat project space (Fig.10). In addition, similar to a two-dimensional case, in the multi-dimensional case groups of projects can also be presented in TRANSCALE. This makes it possible to compare projects from different viewpoints, including their dynamic comparison with what-if analysis. In particular, the analysis of the functional relationship between the efforts E and project duration T indicates that the dynamic characteristics of projects may differ significantly from each other (Fig.7 and Fig.8). This means that the mere coincidence of the parameters of different projects does not mean their complete similarity. 1. Project change presentation in two-dimensional case As an example lets analyze the functional relationship between team productivity P and average team size N av (Fig.9). This functional relationship has a central role in quantitative project management. As can be seen from the figure, team productivity is a slowly declining function of team average size.

Fig.9 Reduction of the average team size leads to the team productivity change (change of the average team size from N av = 34 to N av = 24 results productivity change (increase) from P = 235 to P = 252 which is an around 7% change of productivity) Assume we have a project with an average team size N av = 34 . Reduction of the average team size from N av = 34 to N av = 24 increases the productivity of the team from P = 235 to P = 252 . 2. Project change presentation in multi-dimensional case Fig.10 shows a single project in four-dimensional flat project space before and after change of

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the planned project duration. The initial planned duration of the project is T1 . The reduction of this duration from T1 to T2 accompany with three other changes of the values of project effort E , average team size N av and team productivity P .

Fig.10 Change of the planned duration of the project T = T1 T2 causes three spontaneous changes of its effort, average team size and team productivity Establishment of unambiguous relationships between the changes of project parameters and their graphical presentation makes it possible to drive the change management in an effective way. Conclusions 1. The quality of existing quantitative tools of project management is not satisfactory because of their low accuracy in estimating and predicting the values of the parameters of projects. 2. In order to reduce the huge financial losses caused by the failures of the projects, industry needs tools of a new generation to address the pressing problems of quantitative project management. 3. These tools should be based on fundamental theories of projects and be independent of specific statistical data on the projects.

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PM World Today May 2010 (Vol XII, Issue V)

4. A new generation of tools can be constructed based on the state equation of projects and their objective functions. 5. An example of such a tool in the field of quantitative project management is TRANSCALE, which is designed for non-linear scaling and transformation of projects. 6. TRANSCALE may have wide applications in the planning and execution of projects. Future work 1. 2. 3. 4. Applications of TRANSCALE for project planning. Applications of TRANSCALE for project execution. Applications of TRANSCALE for project data mining. Applications of TRANSCALE for risk analysis.

References 1. Pavel Barseghyan. (2009). Principles of Top-Down Quantitative Analysis of Projects. Part 1: State Equation of Projects and Project Change Analysis. PM World Today May 2009 (Vol XI, Issue V) http://www.pmworldtoday.net/featured_papers/2009/may/Principlesof Top-DownQuantitative-Analysis-of-Projects.html 2. Gas laws. Wikipedia. http://en.wikipedia.org/wiki/Gas_laws

3. Laws of thermodynamics. Wikipedia. http://en.wikipedia.org/wiki/Laws_of_thermodynamics 4. Thermodynamic potential. Wikipedia. http://en.wikipedia.org/wiki/Thermodynamic_potential 5. Pavel Barseghyan (2009) Principles of Top-Down Quantitative Analysis of Projects: Part 2 Analytical Derivation of Functional Relationships between Project Parameters without Project Data. PM World Today June 2009 (Vol XI, Issue VI).

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About the Author

Pavel Barseghyan, PhD


Author

Dr. Pavel Barseghyan is a consultant in the field of quantitative project management, project data mining and organizational science. He is the founder of Systemic PM, LLC, a project management company. Has over 40 years experience in academia, the electronics industry, the EDA industry and Project Management Research and tools development. During the period of 1999-2010 he was the Vice President of Research for Numetrics Management Systems. Prior to joining Numetrics, Dr. Barseghyan worked as an R&D manager at Infinite Technology Corp. in Texas. He was also a founder and the president of an EDA start-up company, DAN Technologies, Ltd. that focused on high-level chip design planning and RTL structural floor planning technologies. Before joining ITC, Dr. Barseghyan was head of the Electronic Design and CAD department at the State Engineering University of Armenia, focusing on development of the Theory of Massively Interconnected Systems and its applications to electronic design. During the period of 1975-1990, he was also a member of the University Educational Policy Commission for Electronic Design and CAD Direction in the Higher Education Ministry of the former USSR. Earlier in his career he was a senior researcher in Yerevan Research and Development Institute of Mathematical Machines (Armenia). He is an author of nine monographs and textbooks and more than 100 scientific articles in the area of quantitative project management, mathematical theory of human work, electronic design and EDA methodologies, and tools development. More than 10 Ph.D. degrees have been awarded under his supervision. Dr. Barseghyan holds an MS in Electrical Engineering (1967) and Ph.D. (1972) and Doctor of Technical Sciences (1990) in Computer Engineering from Yerevan Polytechnic Institute (Armenia). Pavel can be contacted at pavel@systemicpm.com.

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