Estimating the duration of a project is one of the first challenges for project managers and their teams. Due to its complexity, failures in this initial phase can compromise the success of the endeavor at hand. Ultimately, applying the PERT (Program Evaluation and Review Technique) technique, combined with the CPM method, is essential for managing the project schedule, coordinating costs and results.
This article will cover the concept of the PERT method, used to develop more assertive estimates and better manage projects, anticipating a series of complex factors, such as cost and time estimates.
What is PERT in projects?
Created in 1958 in the United States by NASA, the PERT technique consists of determining the duration of an activity based on three possible estimates for that activity: Optimistic (O), Pessimistic (P), and Most Likely (ML).
This is a way to reduce the chances of failure in the implementation of new projects through estimates that demonstrate the inherent risks of each stage. To arrive at an accurate estimate, it is necessary to rely on the expertise of specialists.
The combination of these three possibilities is the great differentiator of the PERT method, as it weighs the uncertainties and risks involved in the activity.
First, it is necessary to obtain the Optimistic, Pessimistic, and Most Likely estimates for the activity from specialists. Consider that:
- optimistic: this is the perfect scenario, where everything goes right;
- pessimistic: this is the worst-case scenario, where everything goes wrong;
- most likely: this is a reasonable scenario, where everything stays within the norm with no major surprises (neither good nor bad).
Read also: 5 tips for good IT project management
Additionally, the project must be broken down into a series of tasks that determine how the schedule will be executed. These stages include:
- designation of leadership or management roles participating in the project;
- phases structuring the project implementation;
- duration estimates for the project at each of its stages;
- the person responsible for tracking the project.
With this information, you can move on to the PERT network — composed of three essential points, also known as the Critical Path Method (CPM/PERT). Read on to understand.
CPM Method
Considered a part or an extension of the PERT technique, the Critical Path Method (CPM) is used in managing more complex and extensive projects. However, it can even be applied to simple projects, bringing a series of benefits.
The method was also conceived around 1958. The objective was to optimize the production chain and reduce maintenance downtime.
Based on this model, tasks or activities are organized graphically. In diagram form, it shows the connection between each stage and their respective dependencies. Understand the symbols used:
- arrows: tasks to be used in the project, also organized by execution time (indicated numerically) — keeping in mind that some tasks or activities can be performed simultaneously or may have an interdependent relationship;
- dotted arrows: show tasks that depend on the completion of other tasks, or adjustments in the schedule, sometimes called dummy activities — when visualizing new possibilities or critical moments in the schedule;
- circles: mark the transition between tasks, connecting the arrows, also called nodes or events.
Thus, the critical path of the CPM method shows the tasks or stages that must be completed for the total realization of a project. Through diagrams, it is possible to estimate the duration of each event (which must be indicated), as well as visualize float times between tasks or opportunities for optimizing the production routine.
Similarly, the technique helps identify bottlenecks, required resources, necessary labor, and potential problems in the project. It also points out downtime periods when maintenance or shift changes in the production system can be performed.
The benefits of the CPM method:
- identification of priority tasks;
- classification of task durations;
- evaluation of potential modifiable tasks for a better production flow;
- estimation of task flow and time spent on execution;
- comparison between planning and execution through the diagram.
Combining the PERT method with CPM allows for a broader view of the logical sequence of planning. Find out how the PERT calculation is performed:
PERT Calculation Formula
The PERT formula applies a greater weight to the Most Likely estimate, while still considering the Pessimistic and Optimistic estimates.
PERT = (Pessimistic + 4 x Most likely + Optimistic)/6
It is even possible to adjust the weights between estimates according to the reality of your project, provided that the total sum of the weights does not exceed 6.
Let’s look at an example:
- Optimistic estimate = 20 days;
- Pessimistic estimate = 35 days;
- Most Likely estimate = 25 days;
PERT = (35 + 4 x 25 + 20) / 6 = 25.83 days
In other words, the PERT estimate pointed out for the activity is 25.83 days.
Standard Deviation: Pessimistic – Optimistic / 6
The standard deviation indicates how much the duration calculated by the PERT formula can still vary, both upward and downward.
Following the example, the standard deviation for the activity will be:
Standard Deviation = 35 – 20 / 6 = 2.5 days
That is, the activity will be executed between 23.33 days (25.83 – 2.50) and 28.33 days (25.83 + 2.50), which is the same as saying that the estimated duration for activity A is 25.83 +/- 2.50 days.
The larger the standard deviation, the more uncertain your estimate for the activity is, because the variation between the optimistic and pessimistic scenarios is very significant.
Variance: (Pessimistic – Optimistic)² / 6
After finding the PERT estimate for the activities and establishing their sequence and dependency, it becomes possible to arrive at the project duration.
Project Deviations
To find out what the project’s standard deviation is—that is, how much the project can vary upward or downward—you cannot simply add the standard deviations of each activity together. Instead, you must calculate the variance of each activity, add them up, and take the square root of the result to find the project’s standard deviation.
Example of activity variance calculation:
Variance: (2.50)² = 6.25
Benefits of the PERT method
Now that you know how to apply the PERT technique, discover how the tool can improve your project results and facilitate decision-making:
- allows for predictive analysis of a project;
- points out project uncertainties in diagram form;
- assists in cost reduction and resource optimization;
- allows for a broad analysis of potential activity duration;
- combined with the CPM method, it improves communication between company departments.
The technique can be used both in projects and for other activities. In some cases, it can be applied solely during high-risk moments when there is no accurate estimate and the variation between the worst and best case scenarios is significant.
Did you already know about the PERT technique? To learn more, subscribe to our newsletter and receive exclusive content to further improve your project management!
