IT Management Reference Guide

Combating the Year-end Budget Blitz—Part 1: Building a Manageable Schedule

Last updated Nov 25, 2005.

This segment was written by Tom Cutting.

The end of the year is coming and IT budgets must be spent or swept back into profit and loss columns. Toward the end of the year, IT projects that are finishing under budget are dumping dollars back into their department coffers while funds that have been on reserve are being released. As a result of this "found" money, department heads are pressuring project managers to complete new projects by the end of the year without additional resources. If this is the norm for your workplace you aren't alone. To avoid this end-of-year crunch, you, as the project manager, need to develop manageable project schedule and use it to track and report resource availability throughout the year. This will allow you to avoid the year-end budget blitz by returning unnecessary funds earlier and give you the ability to communicating resource over-allocation at the end of the year.

This two-part article discusses how to develop a detailed project schedule, track progress, and communicate resource usage. Part one focuses on the five keys to building a manageable project schedule, while part two outlines four critical resource-tracking steps and how to use your plan to communicate availability to your management. By actively maintaining your schedule, you will be able to accurately forecast the needed time and personnel throughout the life of the project and return unneeded funding throughout the year. Unfortunately you will be able to hold back the flood of last-minute funding or the additional time-pressured projects that accompany them. But you will be able to divert some pressure by demonstrating a realistic picture of available resources with your detailed schedule.

Five Keys to Building a Manageable Schedule

There is a belief that projects that end up way under budget are better managed than those that are on or even slightly above budget. In reality, "under budget" usually means "over estimated." To avoid over-estimating your budget, project managers must develop a manageable project schedule by following five key steps:

1. Make it deliverable-based. Before you open your scheduling tool take the time to define what it is you are developing. Begin with the end product and, with your team, identify the smaller, tangible pieces, or deliverables, needed to get there. This process is known as developing a work breakdown structure (WBS). As a simple example, consider customizing your YAHOO! home page. The WBS would look like figure A.
   

   Figure A

   The deliverables for this project are the design, format, and sections one through 4. When these interim products are put together, the end result is a new home page. Further refinement would begin to define activities and tasks such as analyzing backgrounds, reviewing color palette, and selecting a design, which are tasks that would be handled in step 2.

2. Identify tangible tasks. With the deliverables identified, continue to break down the WBS until you have a list of tasks for each deliverable that, when performed, results in the development of the interim product. Tangible means that whoever is assigned to the task is able to understand what is involved to complete it. From our example, tasks for each column section would include picking a topic for each column section; reviewing and selecting content; and publishing content to the page. As a general rule of thumb, keep tasks to a maximum of two weeks. The human mind can quickly grasp what can be accomplished for an 80-hour task or within a two-week time period.

   All activities and tasks must form a part of one of the deliverables. Collectively, the deliverables will constitute your project scope. Anything not associated with these deliverables would then be out of scope. In our example, training your family to navigate the new home page is out of scope, so it shouldn't appear in the schedule.

   You do not necessarily have to track at the lowest task level. You can group several smaller tasks into work products for time tracking. However, it is important that individual tasks be made available to the team as checklists to ensure all steps are completed and estimates to complete (ETC) accurately reflect the remaining effort.

3. Tag tasks with logical dependencies. Project planning tools like Microsoft Project and Primavera have auto-scheduling features. Every time you press the enter key, the tool recalculates the end dates based on resource availability and dependencies. Without logically setting the predecessors and successors in your schedule, the tools cannot perform their jobs effectively. It isn't necessary to tag every task with a dependency, but phase and activity levels are good candidates.
4. Estimate accurate hours and durations. For each task, estimate the number of hours it would take a single individual to complete it. You haven't added specific resources to the schedule yet, but you probably have a good idea of the skill level for the tasks. Take that into account as you estimate. If your schedule groups multiple tasks into work products, summarize the estimated hours from the actual task list.

   The scheduling tool has already calculated an end date based on an eight-hour day, five-day week, but you need to add reality to the mix. No one, over an extended period of time, accomplishes an eight-hour task in a single day without being at working for 10 hours. Interruptions, time and status reporting, and meetings disrupt productivity. Add to this list vacations, sick time, and training and productivity drops to about 80% maximum over the course of the year. The temptation is to adjust the resource availability to 80%. Avoid it.

   Instead, adjust the duration of each task to reflect the time it would take a single resource to accomplish it. For example, a 40-hour task takes approximately 6.25 days to complete. You may be more pessimistic and say that a 40-hour task takes up to two weeks (10 days). Not altering the resource availability allows the scheduling tool to assign each resource multiple tasks totaling 40 hours of work for the week, which is what you want. Everyone is still expected to work a full week, but the full week won't be spent on a single task. For information on how to automate an 80% productivity factor in Microsoft Project, see the "Bonus" section at the bottom of this article.

   Don't develop the hours and duration estimates in a vacuum. Involve the team to get realistic values and timeframes. This will create buy-in from them and increase their confidence in achieving the ultimate goal. With that said, you will always have to look out for padding and adjust the schedule to meet fixed dates.

5. Add resources. The final piece to developing the project schedule is adding resources. Because the durations have been adjusted, the resources will be allocated to the tasks with the productivity factor already computed.

   After the resources have been added, adjustments will need to be made to address any over- or under-allocations. You want to make sure your team has enough work to fill 40 hours each week.

Building a manageable schedule that accurately reflects the time and personnel needed to complete a project is your huge step toward helping you push back against unrealistic new projects at the end of the year. Part 2 of this series discusses the importance of tracking the progress of the project and how you can use your schedule to communicate resource availability and return unneeded funding earlier in the year. Those funds can be used to start new projects earlier and eliminate the massive pile of unused dollars at the end of the year.

Bonus Section

Automating an 80% productivity factor in Microsoft Project can be done using a custom "Duration" field. This will allow you to calculate the time it will take a single resource to accomplish a particular task.

The custom "Duration" field (see figure B) is set up to automatically calculate the number of days a task will take based on the number of hours assigned to it.

This is accomplished by assigning a formula to "Duration1" that divides Work by 0.8 (see figure C). Because Duration fields are measured in days, the result is automatically calculated as days.

You can then copy the "Duration1" column and pasted it into the "Duration" field. A custom field is required because a formula cannot be added to the standard duration field. It is a dynamic field that automatically adjusts during the project. The calculated value is the suggested amount and you should adjust it to match the reality of your project.