Management Reserve

You and your project team will no doubt be tempted during the creation of each task to overstate the estimated amount of time for it to be completed. Don t yield to this temptation . Always reflect the accurate amount of time it should take to complete a task. You can use PERT s optimistic, pessimistic, and most likely approach if you d like, but don t inflate the time required for each task to allow for a mistakes, rework , and late activities within the project.

The reason is explained in Parkinson s Law. Parkinson s Law states that work will expand to the fill amount of time allotted to it. In other words, if your project team says an activity will take them 24 hours to complete, but they know the work will probably only take 16 hours to complete, it ll magically take 24 hours. Really, it s no magic. When people overestimate their time to account for expected troubles, just-in-case scenarios, and other time-munching issues, they rarely take advantage of the time they ve created for themselves . They ll find other work to complete or simply wait until the time they ve reserved for issues has passed and then hop into the work and hope for perfection .

Think of your own experiences. How many times have you had some small task to complete but spent hours cleaning your desk, organizing your materials, and researching the best mode of attack rather than just hopping in and completing the assignment? But how do you work on the day before your vacation? You are able to complete considerably more work on that particular day because the tasks must be completed before you re able to escape.

The same experience will be transferred to your team if you allow them two generous weeks for a task that should typically only require one. Your team will quickly discover that it will take every moment of the two weeks to complete the task you ve assigned them.

Instead, what you should do is use management reserve. Management reserve is an artificial task that is added at the end of the project. The time allotted to the reserve is typically 10 to 15 percent of the total amount of time to complete all the tasks in a project. When a task runs over its allotted time, the overrun is applied to the management reserve at the end of the critical path rather than on each lagging task. Figure 7-10 demonstrates the benefit of using management reserve.

Figure 7-10: Management reserve accounts for task overruns.

Management reserve allows a project manager to use percentages to see how the overall project is coming along. For example, if the project is only 40 percent complete but the management reserve is 65 percent used, then the project is in trouble if the remaining tasks follow the trend of the project thus far. You ll learn more about maintaining management reserve and dealing with late projects in Chapter 8.