Posted by Trying To Do Too Much with Too Little: How Poor Portfolio Management Can Lead to Schedule Delays and Cost Overruns
Management Track
MGM08_Presentation_HowPoorPortfolioMgmtCanLeadtoSchedDelaysandCostOverruns_Smart
MGM08_Paper_HowPoorPortfolioMgmtCanLeadtoSchedDelaysandCostOverruns_Smart
Abstract:
Government organizations often try to accomplish too much with the resources with which they are provided. The genesis of new projects in government organizations often begins with the search to spend idle funds. An organization’s leadership may discover that it has a relatively small amount of money that can be used to research a new technology or to begin initial development of a new project. New ideas to improve systems, develop better, newer ones, or to advance scientific understanding abound. In order to sell leadership, project management provides leadership with success-oriented, optimistic projections. Projects require several years to complete, but only the initial year, or seed money, is often considered when starting these endeavors. The initial year is only the tip of the iceberg, and does not take into account the significant cost of development, production, and operations and sustainment. As a result, these projects often begin small, but wind up costing a significant amount of money, putting a strain on the rest of the portfolio, leading to schedule delays, which in turn result in cost overruns. This paper looks as the impact of trying to do too much with too little, and quantifies the length of schedule delays and the amount of cost overruns expected due to trying to do too much with too little. The paper concludes with a call for organization level portfolio management and for an objective examination of the impacts of new additions to a portfolio.
Author:
Christian Smart
Missile Defense Agency
Dr. Christian Smart is currently employed as the director for cost estimating and analysis at the Missile Defense Agency (MDA). In this capacity, he is responsible for overseeing all cost estimating activities developed and produced by the agency, and directs the work of a 100-person team. Prior to joining MDA, Dr. Smart worked as a senior parametric cost analyst and program manager with Science Applications International Corporation. An experienced estimator and analyst, he was responsible for risk analysis and cost integration for NASAs Ares launch vehicles. Dr. Smart spent several years overseeing improvements and updates to the NASA/Air Force Cost Model and has developed numerous cost models and techniques that are used by Goddard Space Flight Center, Marshall Space Flight Center, and NASA HQ. In 2010, he received an Exceptional Public Service Medal from NASA for his contributions to the Ares I Joint Cost Schedule Confidence Level Analysis and his support for the Human Space Flight Review Panel led by Norm Augustine. He has given numerous presentations on cost modeling and risk analysis both in the U.S. and abroad. He was awarded best of conference paper at the 2008 Annual Joint ISPA-SCEA conference in Noordwijk for The Fractal Geometry of Cost Risk, best of conference paper at the 2009 Annual Joint ISPA-SCEA conference in St. Louis for The Portfolio Effect and the Free Lunch, best of conference paper at the 2010 Annual Joint ISPA-SCEA conference in San Diego for Here, There Be Dragons: Considering the Right Tail in Risk Management, and best of conference paper at the 2011 Annual Joint ISPA-SCEA conference in Albuquerque for Covered with Oil: Incorporating Realism in Cost Risk Analysis. Dr. Smart was named the 2009 Parametrician of the Year by ISPA. He is a SCEA certified cost estimator/analyst (CCEA), a member of the Society for Cost Estimating and Analysis (SCEA) and the International Society of Parametric Analysts (ISPA). Dr. Smart is a past president of the Greater Alabama Chapter of SCEA, is the managing editor for The Journal of Cost Analysis and Parametrics, and serves as the Region III VP on the SCEA national board of directors. Dr. Smart earned bachelors degrees in Economics and Mathematics from Jacksonville State University, and a Ph.D. in Applied Mathematics from the University of Alabama in Huntsville.