PERT involves the management of probabilities during a project development. This method handles the management elegantly by use of simple statistics. The identification of tasks necessary to accomplish a project is the main idea behind the PERT method. During PERT analysis, Gantt charts that structurally list the activities and their dependencies are deployed to facilitate the logical flow into the succeeding stages, especially where there is a network of activities. In PERT estimation method, the time that is required for the completion of each action is estimated.
The simplest technique in PERT involves the determination of three time estimates that are required for the completion of an activity. Mathematically, activity times are assumed to be probabilistic. PERT is aimed at arriving at the Activity time which should be exact (Heerkens, 2001). This makes use of PERT formula during project management greatly beneficial to the project manager who may be challenged by the cost or duration estimation process.
There are several benefits that are notable while using the PERT formula. First, the formula gives the approximated completion date. This is achieved by combining the PERT formula with the bottom-up technique, and then adding the entire accumulative task durations that have been estimated by the two techniques. Therefore, in cases where clients demand to know specific completion dates, the PERT technique assists the managers in determining if the projects have chances of meeting the deadlines. The PERT formula also helps in determining the project flexibility. If they find that the items have large ranges between their optimistic estimates and their pessimistic estimates, they conclude that the project is flexible. This enables the project managers to rush the project plan by considering which items allow for this flexibility. Lastly, the PERT technique assists the project managers to schedule tasks. They do this by estimating the duration a task takes using the Standard Deviation formula and the PERT technique. These estimations help the managers in scheduling a tasks start and complete times more accurately, which is greatly beneficial, especially when the projects are complex.
However, PERT has some limitations. For example, it makes simplistic assumptions while analyzing the activity and project completion times. An example of these assumptions is that the critical path doesn’t change once it has been identified. The completion time may be underestimated, and this underestimation results into late completion. Nevertheless, the PERT’s advantages outweigh the disadvantages. For example, PERT recognizes the uncertainty during the estimation of the project time. On recognizing this, it assigns a rough approximation to this uncertainty which helps in arising at more realistic figures.
Risk Matrix is a risk assessment tool that enables the risk severity on an event to be determined. A risk can be defined as the total of all hazards that threaten the timely completion of a project. The risk that a particular hazard poses is calculated by multiplying its probability with the consequences of its occurrence. Risk Matrices enables a manager to calculate the levels of chance they can accommodate when dealing with various events. They do this by weighing the risk posed by the occurrence of an event against the toll of implementing the benefit and safety gained from it.
However, the Risk Matrix poses some challenges in its application. There are several mathematical features that prove problematic, and this makes it more difficult to assess the risks. These features include poor resolution, errors, undesirable resource allocation, and ambiguous outputs and inputs. Therefore, using rick matrixes, the managers can only compare small fractions of randomly chosen pairs of hazards. Comparison of bigger fractions may be incorrect and ambiguous as the method can assign similar ratings to risks that are quantitatively different. Managers may make mistakes by assigning higher ratings to smaller risks. Furthermore, when managers wish to counter measure a risk, they find it challenging to effectively allocate resources that are aimed at reducing a risk (O’Brien et al, 2010). Lastly, there cannot be objective categorization of risk severity. This is because the inputs to the risk matrices require immanent interpretation while different stakeholders usually obtain contradicting ratings while considering the same quantifiable risk. These limitations necessitate that managers be cautious when dealing with the risk matrices, a situation that would demand for more time and effort.
Earned Value Management
Earned Value Management (EVM) assists the project managers measuring the performance of a project in a systematic way that is used in finding the variances presence in projects. This process relies on the comparison between the works planned and the work performed. EVM is mainly applied during the schedule and cost control, and it proves to be very useful to project managers during project forecasting. An essential component used by the mangers is the project baseline which serves as a referencing point when undertaking any EVM related activity. Therefore, EVM provides the project managers with the quantitative data that are required during project decision making process.
EVM is based on the concept that all steps in a project earn values whenever the work is completed. The Earned Value is then compared to the actual and planned costs with the aim of determining the project performance. This also helps in determining its future performance styles. During the Earned Value Management, the managers measure the physical progress of a project in dollars, and this necessitates that the cost and schedule performance be analyzed in the same terms.
The Earned Value Management enables the schedule and cost measurements of a project to be managed in an integrated fashion. For example, if a budget spending plan indicates that a manager is overspending, then his schedule should show milestones erring. At this moment, the manager recognizes that there exist some problems. Earned Value Management also helps the manager in making the quantitative assessments of how serious the problems may be. Therefore, Earned Value Management helps a manager to form the conclusion quickly which may call on him to raise the staffing levels in order to enhance productivity. These benefits make managers find the principles of EVM very helpful as they run a project.