Fact Based Management

Eduardo Miranda
CASCON, November 11th,
1999

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Defining “Fact Based” Management

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Dialogue A
John – “We need to have the new software ready by the end of
the year”
Caroline – “But that leave us with only 6 months to complete
the project”
John – “That’s our market window”
Caroline – “But John, we will have no buffer ...”
John – “Dan got his Project rolled out in six months, should I
give the assignment to him?”

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Dialogue B
John – “We need to have the new software ready by the end of the year”
Caroline – “That leave us with only 6 months to complete the project”
John – “That’s our market window”
Caroline – “From the product spec the new software is going to be bigger
than Application Y and smaller than Z, let’s say around 50 KSLOC, so if
we want to have it in six months, with the resources available, we will
have to perform at least twice as better as Dan’s project”
John – “What about putting more people into it, we need to get the new
release ready for December 22nd”
Caroline – “We’ll need around 18 people, but still have to test and
integrate roughly 33 internal interfaces, and our overall probability of
success will be less than 50%. A better approach would be … ”

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Quiz

lWhich one of the preceding dialogues better reflects the

“Fact Based” Management concept?

– Dialogue A

– Dialogue B

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Dialogue A

Caroline - “We’ve planned 350 test cases and executed 276 so

far”
John - “How many TRs did you have?”
Caroline - “During the first two weeks of testing we got 50,
during the two second 65 and last week 48”
John - “So by the end of the week you shall be done with
testing”
Caroline - “But John ...”

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Dialogue B
Caroline - “We’ve planned 350 test cases and executed 276 so
far”
John - “How many TRs did you have?”
Caroline - “During the first two weeks of testing we got 50,
during the two second 65 and last week 48”
John - “So by the end of the week you shall be done with
testing”
Caroline - “By projecting the trends we got so far we will need
to continue testing for another 3 weeks to reach the 100
errors left mark”
John - “ We have to ship it anyway, we have a deadline to
meet”
Caroline - “I understand that, but our current estimate is that
there are around 150 errors yet undiscovered. If you want to
go ahead you’ll need to get a waiver from the QA Director”

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Quiz

lWhich one of the preceding dialogues better reflects the

“Fact Based” Management concept?

– Dialogue A

– Dialogue B

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

What is the problem with opinion, as
opposed to, fact based management?

lComes late

lValuable knowledge, experience and data are lost

lA lot of time is wasted arguing which opinion is correct

lUsually the most vocal, or the one with most power, and not
necessarily the one with best argument prevails

lIt might get personal

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

How much do bad decisions cost?

TTL Overtime effort

TTR R
Headcount

Newcomers effort
TTD
Overtime effort

E = H x PT, planned level of effort H

PC x R Coaching Time

PS

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

A measurement base

Benchmarking

Strategic Level. The evolution of the process capabilities is monitored

and benchmarked to assess the competitiveness of the organization and
set policies.
Administration

Process Management Level. Data is grouped across the organization.

Process capabilities are established and monitoring using control charts.

Project Management Level. Data is grouped and presented in context.

Forecasts are made using models. i.e EPM, MinimunTime, etc.

Transactions & Artifact Level. Provides the raw data, i.e: How big is Block
X, How many TRs were closed last week

Data Collection

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

But measurements are not enough

y higher is
worse

Inflection point

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

The overtime cycle & project failures

Quality Rework
Overtime

Productivity

Effort
Cost

Schedule

Product Size

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Using system thinking to prevent problems
Technical
Adequacy
Stability +
Functional -
Size +
Developer
- Productivity
Product Size +
-
Effort -
+ + + +
Schedule +
+ +
Cost
Rework - Quality

+ Variable changes in same direction

Complexity -
- Variable changes in opposite direction

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Resource Planning

© Business Engine, 1998

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

 Project Interactions
Project Delay

New Projects
-
- +

-
Reduce scope
Resource of project
Availability

- +

Band Aid
Solutions

+ Variable changes in same direction +

- Variable changes in opposite direction

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

The 90% complete syndrome
cumulative production

time
Rayleigh Linear

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

The Rayleigh curve

rate of production

Learning

Hard problems

time

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

EPM
Estimate

Testing
Activities
No
Deviation ?

Development Yes

Root
Cause
Analysis

Corrective
Yes No Review
Problem ?
Action Estimate

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Project reporting using Earned Value
EAC

Project
Target Cost (BAC) Overrun

ACWP

BCWS Cost Variance

Project
Slippage
$ Schedule Variance
BCWP ($)

Work
performed

Time Reporting Completion

Date Date

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

How accurate do the models need to be?
True
worse bad
behaviour

assumed behaviour

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

 – There seems to be a general misunderstanding to the
effect that a mathematical model cannot be undertaken
until every constant and functional relationship is known
to high accuracy. This often leads to the omission of
admittedly highly significant factors (most of the
“intangibles” influences on decisions) because these
are unmeasured or unmeasurable. To omit such
variables is equivalent to saying that they have zero
effect... Probably the only value known to be wrong...

J. W. Forrester, Industrial Dynamics, The MIT Press, 1961

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

 Probe Benchmarks
CASE Tools

Measurement
Data Base

Query
Accounting Capability

Early Warnings
Activity Based Project
Costing Correlation
Matrix

Forecasting
Models

Control
Charts
Processing

Strategic
Trends

Technological Infrastructure
Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda
Estimation & Planning - Minimum Time

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Forecasting & Monitoring Project Progress

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

 Understanding system behaviour - The Test
Planning Simulator Delivery Plan

System Test Plan

Function Test Plan

Simulation Simulation Output

Parameters

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda

Summary

lThe only way to shorten TTM, is to do the right

things right the first time
lIf a problem is allowed to develop, there is no
satisfactory recovery.
lThe existence of practical measurements for
project management is an essential ingredient of
quality decisions

Ericsson Research Canada © All rights reserved 1999 Eduardo Miranda