Transforming project forecasts using probabilities

Plagued by watermelon projects? You know the kind... the ones that are green, green, green, until the very end and then they are red. Well, you're not the only one. The good news is that changing the way you forecast can provide a higher level of clarity on just how likely it is that a project will finish by a given date.

By attending this talk you'll learn 1) why probabilities are a necessity when uncertainty is present, 2) how to use your team's data to create probabilistic forecasts, and 3) what to keep in mind to create the most accurate forecasts.

Transcript

1. @everydaykanban | @55degreesAB 1
2. @everydaykanban | @55degreesAB Follow us on social media /company/55degrees @55degreesAB @55degreesAB /55degreesAB /c/ActionableAgileAnalytics Apps that make it easier to get work done 🎉 From re fi ning work, to bringing external data into Jira, to improving work fl ows and creating reliable forecasts, 55 Degrees has apps to make your work less stressful.
3. #PM72 3 @everydaykanban | @55degreesAB Benjamin Franklin November 1789 “…IN THIS WORLD, NOTHING IS CERTAIN EXCEPT DEATH AND TAXES.”
4. Often forecasts are interpreted as certainties because we don’t tell them otherwise 4 #PM72 @everydaykanban | @55degreesAB CC BY-SA 3.0, https://en.wikipedia.org/w/index.php?curid=3422341
5. 5 #PM72 @everydaykanban | @55degreesAB The 3 Gaps Outcomes Plans Actions
6. 5 #PM72 @everydaykanban | @55degreesAB The 3 Gaps Outcomes Plans Actions ! Knowledge Gap Difference between what we would like to know and what we actually know
7. 5 #PM72 @everydaykanban | @55degreesAB The 3 Gaps Outcomes Plans Actions ! Knowledge Gap Difference between what we would like to know and what we actually know ! Alignment Gap Difference between what we want people to do and what they actually do
8. 5 #PM72 @everydaykanban | @55degreesAB The 3 Gaps Outcomes Plans Actions ! Effects Gap Difference between what we expect our actions to achieve and what they actually achieve ! Knowledge Gap Difference between what we would like to know and what we actually know ! Alignment Gap Difference between what we want people to do and what they actually do
9. 6 #PM72 @everydaykanban | @55degreesAB Used with permission from Jim Benson A predictable response
10. 7 #PM72 @everydaykanban | @55degreesAB EE4: Building an SSV Timeline Total expected hours Total hours Sam Jansen Expected hours Total hours Alexander Meynen Expected hours Total hours Tinus Michiels Expected hours Total hours Jeroen van Aert Expected hours Total hours Jef Van Den Bergh Expected hours Total hours Bob Verschueren Expected hours Total hours 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Tasks Subtasks wk h h h h h h h h h h h h h h Engineering a. Case SSV 1 i. Motor/ Solar panel analysis 7 4 3 ii. Gear ratio 15 2,5 2,5 10 2,5 2,5 2,5 2,5 iii. Choice of materials 10 5 1 1 1 1 1 5 1 iv. Frame design 30 15 2 1 1 1 15 1 1 v. Optimalisation (bisection method) 25 4 15 10 4 vi. Sankey diagram 10 12 10 vii. Production parts 20 10 12 10 viii. Construction 60 10 10 10 10 10 10 b. Case Simulink i. Simulation solar panel 24 4 4 4 4 5 4 4 10 ii. Simulation DC-motor 7 4 3 iii. Simulation race 6 1 1 1 1 1 1 c. Case SSV 2 i. Slope run test 24 4 4 4 4 4 4 ii. Simulation drive shaft 7 3 4 iii. Technical drawings 40 10 30 iv. Collision analysis 15 10 5 d. Race day 30 5 5 5 5 5 5 Enterprising e. Wikipage i. Company information 3 3 1 ii. SSV information 5 5 1 f. Name & Logo i. Design 2 1 2 ii. Engraving 6 3 3 g. Documents i. Plan of approach 4 2 2 2 2 ii. Work breakdown structure 4 2 2 2 2 iii. Gantt chart 10 1 5 3 5 3 iv. Cooperation contract 2 2 2 v. Case 1 document 45 5 5 15 5 5 15 5 5 15 5 vi. Simulink document 15 5 10 5 10 vii. Case 2 document 40 15 5 10 10 h. Wikipage i. Upload documents 5 5 1 ii. Blog 5 5 2 2 iii. Design description 6 3 3 iv. Final process report 5 i. Evaluation i. Test 1 30 5,00 5 5 5 5 5 ii. Test 2 30 5,00 5 5 5 5 5 iii. Peer assessments 1 total 548 0 92 27 92 25 92 21 88 22 91 25 90 25 Legende milestone responsibillity Gantt chart 1 Educating Weeks The workplace version of ruling it harder… CC BY-SA 3.0 - https://upload.wikimedia.org/wikipedia/commons/thumb/b/bf/AM4_Gantt.pdf
11. Deterministic Forecast 8 #PM72 @everydaykanban | @55degreesAB IT WILL BE DONE ON X DATE
12. Deterministic Forecast 8 #PM72 @everydaykanban | @55degreesAB IT WILL BE DONE ON X DATE •Communicates a single possible outcome
13. Deterministic Forecast 8 #PM72 @everydaykanban | @55degreesAB IT WILL BE DONE ON X DATE •Communicates a single possible outcome •Provides no probability of that outcome
14. Deterministic Forecast 8 #PM72 @everydaykanban | @55degreesAB IT WILL BE DONE ON X DATE •Communicates a single possible outcome •Provides no probability of that outcome •Appropriate only when certainty is assured
15. Probabilistic Forecast 9 #PM72 @everydaykanban | @55degreesAB THERE’S AN 85% CHANCE IT WILL BE DONE ON OR BEFORE 
 X DATE
16. Probabilistic Forecast 9 #PM72 @everydaykanban | @55degreesAB THERE’S AN 85% CHANCE IT WILL BE DONE ON OR BEFORE 
 X DATE •Two components: ‣ Range of outcomes ‣ Probability you’ll fall into that range
17. Probabilistic Forecast 9 #PM72 @everydaykanban | @55degreesAB THERE’S AN 85% CHANCE IT WILL BE DONE ON OR BEFORE 
 X DATE •Two components: ‣ Range of outcomes ‣ Probability you’ll fall into that range •Appropriate whenever uncertainty is present
18. 10 Let’s create these probabilistic forecasts… #PM72 @everydaykanban | @55degreesAB Single Item Forecasts Multiple Item Forecasts
19. 10 Let’s create these probabilistic forecasts… #PM72 @everydaykanban | @55degreesAB Single Item Forecasts Multiple Item Forecasts 📆 Fixed Date 📑 Fixed Scope 2 Types
20. For each, we can use the same simple data to calculate the probabilities 11 #PM72 @everydaykanban | @55degreesAB
21. Single Item Forecasts 12 #PM72 @everydaykanban | @55degreesAB How long will it take?
22. Single Item Forecasts 12 #PM72 @everydaykanban | @55degreesAB How long will it take? Finish Start
23. Single Item Forecasts 12 #PM72 @everydaykanban | @55degreesAB How long will it take? Finish Start Cycle Time: The total elapsed time it takes a work item to travel from start to fi nish
24. #PM72 13 @everydaykanban | @55degreesAB Cycle Time: The total elapsed time it takes a work item to travel from start to fi nish Single Item Forecasts (Finish date - start date) + 1
25. #PM72 13 @everydaykanban | @55degreesAB Finish Start Cycle Time: The total elapsed time it takes a work item to travel from start to fi nish Single Item Forecasts (Finish date - start date) + 1
26. Use a Cycle Time Scatterplot to calculate probabilities 14 #PM72 @everydaykanban | @55degreesAB
27. Use a Cycle Time Scatterplot to calculate probabilities 14 #PM72 @everydaykanban | @55degreesAB 50% of work took 7 days or less
28. 85% of work took 16 days or less Use a Cycle Time Scatterplot to calculate probabilities 14 #PM72 @everydaykanban | @55degreesAB 50% of work took 7 days or less
29. 15 #PM72 @everydaykanban | @55degreesAB by understanding your risk tolerance Choose a probability
30. 15 #PM72 @everydaykanban | @55degreesAB Wrong as much as right… by understanding your risk tolerance Choose a probability
31. 15 #PM72 @everydaykanban | @55degreesAB Wrong as much as right… Ask: What is the fallout if we fall outside of the probability? by understanding your risk tolerance Choose a probability
32. 15 #PM72 @everydaykanban | @55degreesAB Wrong as much as right… Contains too many outliers Ask: What is the fallout if we fall outside of the probability? by understanding your risk tolerance Choose a probability
33. 15 #PM72 @everydaykanban | @55degreesAB Wrong as much as right… Contains too many outliers Just the right balance? Ask: What is the fallout if we fall outside of the probability? by understanding your risk tolerance Choose a probability
34. 16 #PM72 @everydaykanban | @55degreesAB probabilistically Deliver your forecast
35. 16 #PM72 @everydaykanban | @55degreesAB 85% of the time we finish a 
 work item in 16 days or less 
 (from the day it starts) probabilistically Deliver your forecast
36. 17 #PM72 @everydaykanban | @55degreesAB The underlying rule of thumb
37. Multiple Item Forecasts 18 #PM72 @everydaykanban | @55degreesAB When will they all be done?
38. Multiple Item Forecasts 18 #PM72 @everydaykanban | @55degreesAB Finish Start When will they all be done?
39. Multiple Item Forecasts 18 #PM72 @everydaykanban | @55degreesAB Finish Start Throughput: The total count of items that pass the de fi ned fi nish point in a given unit of time When will they all be done?
40. 19 #PM72 @everydaykanban | @55degreesAB A Throughput Run Chart will show you the data But you need a Monte Carlo Simulation to calculate the probabilities
41. 20 #PM72 @everydaykanban | @55degreesAB For Fixed Scope, use Monte Carlo: When
42. 20 #PM72 @everydaykanban | @55degreesAB For Fixed Scope, use Monte Carlo: When There’s an 85% chance that we will f inish these 45 items on or before May 25
43. 21 #PM72 @everydaykanban | @55degreesAB For Fixed Date, use Monte Carlo: How Many
44. 21 #PM72 @everydaykanban | @55degreesAB For Fixed Date, use Monte Carlo: How Many There’s an 85% chance that we can f inish 67 or more items by then
45. 22 #PM72 @everydaykanban | @55degreesAB For an entire portfolio, use Portfolio Forecaster!
46. 23 @everydaykanban | @55degreesAB Summary
47. 23 @everydaykanban | @55degreesAB • When more than one outcome is possible, probabilistic forecasts are necessary. Summary
48. 23 @everydaykanban | @55degreesAB • When more than one outcome is possible, probabilistic forecasts are necessary. • Probabilistic forecasts show risk in 2 ways: 
 a probability (%) and a range. Summary
49. 23 @everydaykanban | @55degreesAB • When more than one outcome is possible, probabilistic forecasts are necessary. • Probabilistic forecasts show risk in 2 ways: 
 a probability (%) and a range. • Choose a % that matches your risk tolerance Summary
50. 23 @everydaykanban | @55degreesAB • When more than one outcome is possible, probabilistic forecasts are necessary. • Probabilistic forecasts show risk in 2 ways: 
 a probability (%) and a range. • Choose a % that matches your risk tolerance • Tools like ActionableAgile and Portfolio Forecaster exist to help you create these forecasts in minutes. Summary
51. 24 #PM72 @everydaykanban | @55degreesAB Join us at the after party for demos of ActionableAgile, Portfolio Forecaster, and more Tuesday, June 14 19-21 CEST Register on the PM72 website!
52. @everydaykanban | @55degreesAB 🍦 Follow us on social media /company/55degrees @55degreesAB @55degreesAB /55degreesAB /c/ActionableAgileAnalytics Get your free trial of any app shown below via the Atlassian Marketplace!