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Reported project management effort, project size, andcontract type
Abstract
Literature based hypotheses on the proportion of projectmanagement effort are created and tested with reported effort datafrom 117 projects by software supplier firms. The results supportmost of the literature based hypotheses, but some of the hypothesesare not supported. The supported hypotheses are the correlationsbetween project management effort, project size, and team size. Theunsupported hypotheses are the necessity of spending at least someproject management effort on a project, and the insignificance ofcontract type. The conflict with previous studies and practicalexperience may be a result from market pressures and skewedreporting. The analysis implies that there is a pattern ofinaccurate reporting of effort data and some possible explanationsfor the pattern are discussed. The results suggest that we do notproperly understand the internal dynamics of supplier firms.
1. Introduction
Two important steps during project planning are the estimationof the effort required for the actual implementation of the projectand the creation of the work breakdown structure (WBS). Theimportance of the WBS has been stressed in standards such asPRINCE2 (OGC, 2009), PMBOK (PMBOK Guide, 2013), and ISO 21500 (ISO,2012). The importance of the estimation of effort has been notedespecially in the software development field (Jørgensen andShepperd, 2007, Moløkken and Jørgensen, 2003), in which projectsare often late due to problems in effort estimation (Jørgensen andMoløkken-Østvold, 2006).
The accuracy of effort estimation is especially important forsoftware supplier firms that operate in the project business. Animportant part of their business is based on selling projects andassociated services to their customers (Artto and Wikström, 2005).Although those firms may not be dependent solely on sellingprojects, the profitability of individual projects is especiallyimportant for them (Savolainen et al., 2012). In order to be ableto make a profit on projects sold to customers, the effort requiredby an individual project has to be estimated during the sales phaseof the project marketing cycle (Cooper and Budd, 2007).
Software development projects are especially prone to estimationerrors (Jørgensen, 2005, Kocaguneli et al., 2012, Moløkken andJørgensen, 2003), and those errors may have a significant economicimpact on software suppliers. Software suppliers have to be able toestimate the actual costs that a project will impose on them. Forthat purpose, they can use expert estimation (Jørgensen, 2005) orsoftware effort-estimation techniques. The use of softwareeffort-estimation techniques is based on defining the new projectby some of its attributes and comparing those attributes to ahistorical data set (i.e., a set of past projects) containing themeasures of the relevant attributes (i.e., distribution of actualeffort, size, programming methodology, programming language,experience of the development team, and others) (Dejaeger et al.,2012).
We are not aware of studies that link contract type to effortestimation or effort reporting. Hence it is assumed that contracttype has no impact on effort, although it has been reported to havean impact on project success (Sadeh et al., 2000).
Project management effort is an important part of the effortrequired for the implementation of a project, and research suggeststhat any complex activity such as a project or a complex taskcannot be started without spending a minimum level of effort.According to Barry et al. (2002), a certain minimum level of effortis required for starting complex activities. In addition, there arecases in which the supplier encounters additional challenges(Savolainen and Ahonen, 2015), which increase the projectmanagement effort required during the start of the project. Hencethe effort estimation of the project management activities for aproject should include at least the effort required for startingthe project and its complex tasks determined in the work breakdownstructure created for the project.
The creation of a detailed work breakdown structure requiresknowledge of the expected amount of project management effort thatwill be needed for the beginning project. For that reason, thedistribution of effort between different tasks in the WBS should beknown. For this study, we analyzed 117 software developmentprojects in order to find out the relative minimum and maximumlevels of project management effort that is required for themanagement of a software development project. Prior to theanalysis, we created five hypotheses based on the literature andour experience.
Analysis of the data did provide support for some of ourtheoretical hypotheses, but some of the hypotheses turned out to beunsupported. Supported hypotheses are the correlation betweenproject duration and the proportion of project management effort,and the correlation between team size and the proportion of projectmanagement effort. Unsupported hypotheses are the minimum amount ofproject management effort required and the relationship between thetype of contract and the proportion of project management effortrequired — these results are not in accordance with previousliterature and our own experience. However, the data provide aglimpse into the actual realities of supplier firms. The realitiesof the project business may explain the unexpected results, sincecommercial realities may force the supplier firms to behave in waysthat make the historical data less accurate than would bepreferred. The results of our study suggest that there is asystematic pattern of inaccurate reporting of project managementeffort.
The structure of the paper is as follows. In Section 2, weoutline our hypotheses and the reasoning behind them. Section 3briefly outlines the data, and Section 4 presents our analysis. Theresults of the analysis, some of which are counterintuitive, arediscussed in Section 5, and some explanations for the unexpectedresults are speculated. Section 6 provides a conclusion.
5. Discussion
The results of our analysis have interesting implications. Theresults and their implications require further discussion. In thissection, we discuss the results, possible explanations for theresults, and the implications of the results.
5.1. Results and possible explanations
The results of our analysis provide support for some of ourhypotheses, but not all of our hypotheses are supported. Thesupported hypotheses are H1 and H2. For hypothesis H4, there was nosupport. Similarly, hypotheses H3 and H5 were clearly not supportedby the analysis.
The supported hypothesis H1 tells us that longer projectsrequire a greater proportion of project management effort thanprojects with a shorter duration. This is in accordance with theliterature, in which the management of changes is very importantwhen the duration of a project grows (Dvir and Lechler, 2004), andlonger projects are less likely to succeed due to growinguncertainty (Cooke-Davies, 2002). Hence long duration is in itselfat least a partial reason for the increasing proportion of projectmanagement effort.
The supported hypothesis H2 suggests that large project teamsrequire a greater proportion of effort for coordination andmanagement than small teams. The results of the analysis supportthe view that during project planning, more effort should bedirected to project management related activities when the size ofthe team grows. The result can be explained by the additionalcommunication required by the management of a larger project team.Communication is especially important in the case of distributedteams, for which coordination and management effort may have to berethought (Tannenbaum et al., 2012).
The data does not support H4. However, a visual analysis of thedata (shown in Fig. 3) suggests that the lack of support for H4 isdue more to the limited number of large projects in our data.Definite support or lack of support for H4 would require additionaldata, and possible reformulating of the hypothesis.
The lack of support for H3 is against our prior expectationsbased on the literature. Since starting a complex task requires atleast some management effort (Barry et al., 2002), the projectswith zero project management effort are clearly against earlierresults. We are aware of only one previous study that has reportedactual numbers on the project management effort used in a supplierfirm. In that study, Haapio (2011) reported that the amount ofproject management effort varied between 2.6% (min) and 23.5% (max)of the total effort (1Q 8.1%, 3Q 14.9%, mean 11.7%, and median11.3%). However, Haapio only classified project managers'activities as project management effort. Despite that difference,Haapio's data did not have a single project with zero hours usedfor project management.
It must, however, be stressed that the data consist of reportedeffort, not actual observed effort. Fig. 1 suggests that there is apattern in the reporting of project management effort. The patternsuggests that project management effort may not be correctlyreported in the case of small projects, and the reported proportionof project management effort is smaller than the real proportion.This pattern of inaccurate reporting is a very interestingphenomenon and clearly requires further study. The pattern ofinaccurate reporting may have several reasons and some of thepossible reasons for that are outlined later in this section.
The lack of support for H5 suggests following possibilities: (1)our data is not representative and no conclusions should be basedon it, or (2) the project management practices should be differentfor projects with different types of contracts, (3) the reportingof hours spent is somehow skewed, or (4) the customer handles agreater part of project management activities in the case oftime-and-materials contracts than in the case of fixed-pricecontracts even if the projects are performed on the supplier'spremises and produce an end-product.
Our data is from three firms only. The firms may be exceptions,although that is not likely because we have no information thatwould make those firms exceptions in the competitive field ofsoftware suppliers. Another possibility is that the projectsincluded in the data are exceptional. That possibility cannot berejected, but we think that is unlikely, although the projects wereselected by the representatives of the firms. The data representshow the actual timesheets had been filled in.
The data represents the actual timesheets of the projects, notthe actual distribution of effort. The real distribution may bevery different, especially in the case of small projects. We thinkthat there may be various reasons for the reported distribution ofeffort not to be the same as the actual distribution of effort.These reasons are speculations, not researched facts. The firstreason is that the members of the project team may not report someeffort correctly due to a misunderstanding or insufficientguidance. The second reason is that there may be a natural tendencyto report less management effort for small projects than is reallyspent. The third reason is that the misleading reporting may bedeliberate and a consequence of the business realities in which thefirms operate. An additional issue may be inaccurate reporting ofovertime, which in itself may skew the data.
Accurate reporting on how employees spent their effort requiresgood guidelines, sufficient training, and the possibility to reportthe actual distribution of effort in a truthful way. We are notaware of any studies on this, but we assume that in many cases themembers of a project team encounter situations in which they havedifficulties in deciding how to report what they just did. Thisexplanation may be supported by the fact that in many projects,there were at least some hours reported as belonging to thecategory “other”, which means something else than projectmanagement activities or actual software development activities.Those hours have been reported as belonging to the project, but notbelonging to project management or development.
The second possible explanation for the zero or very few hoursreported as project management may be a result of people trying tolook good and effective. A good member of a project team shouldspend his or her working time implementing the project. In thatcase, the team members may report the distribution of their effortin an inaccurate way. This may happen especially in small teams inwhich there is no dedicated project manager. A part-time projectmanager may perform all the necessary project managementactivities, but report that effort as something else than projectmanagement. That may be deliberate or subconscious. This may be aresult of people's tendency to change their behavior according tothe stated objectives. It has been noted that you are what youmeasure (Hauser and Katz, 1998).
The third possible explanation is based on the business aspectsof the firms providing software development services. It ispossible that during the negotiation phase of the project marketingcycle shown in Fig. 5 (the figure is adapted from Holstius (1987),the types of effort or distribution of effort presented in theagreement may differ from the real distribution of effort betweendifferent types of activities. This type of phenomenon has beenstudied by Glass et al. (2008), who found out that about half ofsoftware development projects included intentionally inaccurate ormisleading marketing or reporting.
6. Conclusion
Project management effort is one of the necessary types ofeffort required for successful completion of software developmentprojects. Prior knowledge on the relative amount of projectmanagement effort (for example, as a percentage of the total effortrequired) would help effort-estimation and thework-breakdown-structure building for a project. In order to get abetter understanding of the relation of relative project managementeffort to the size of a project and the size of a team, we analyzeddata from three organizations.
The analysis revealed that the size of the team correlatespositively to the relative project management effort required. Theduration of the project also correlates positively with therelative project management effort. Our data has, however, severalcharacteristics that conflict with our assumptions based on theliterature and our experience. Hence our analysis creates more newquestions than it provides answers for.
It seems to be the case that there is a pattern in the effortreporting, and that pattern may be a sign of a common tendency forinaccurate or misleading reporting. Hence the most interesting openquestions consider the ways of reporting the effort spent and thetruthfulness of that reporting, the impact of commercial issues onreporting, and the usability and accuracy of the historical dataused for effort-estimation. Those questions show there are manyissues regarding the behavior of firms that operate in the projectbusiness that we do not know about, and those questions requirefurther study.
please get one sentence the most take away and one-sentence criticism from this article Reported project management effo
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