THE SUCCESSIVE PRINCIPLE – Perhaps the Worlds Best for Estimation

Many have probably done some form of project management and found that it may seem cumbersome and ineffective.

HOW DO YOU MAKE AN EFFECTIVE ESTIMATION IN A BUSY EVERYDAY?

In today’s business one has to choose effective methods and tools to keep up with the competition.

HKS-Consult suggest using The Successive Principle, made by Steen Litchenberg:

  • The method is probably the most accurate and effective method available in the world
  • The method is statutory in the public sector in Norway. 80% of major complex projects such as tunnel and highway projects and large IT infrastructure projects keep the budget!
  • A major entrepreneur AF-Gruppen.no has increased their EBIT from 2.5 to 6% due to implementation of the method
  • The method also estimates the environmental impact (uncertainty) of the project. Experience shows that there are often 75-90% of the uncertainties OUTSIDE the project and only 25-10% in the project’s technical solution!
  • The method works top down and focuses only on the deliveries in the project that have the biggest uncertainty contribution. This will save a lot of analysis work and avoid ‘Paralyzed by analyzing!

Efficient approach:

The method is executed in an efficient manner as follows:

  1. Schedule estimation: Participants, alternates, facilitators, premises, etc.
  2. Describe the project’s basic situation: General conditions, frameworks, conditions, risks, product specifications, market, etc.
  3. Project sponsor, project owner and project manager make a basic description of projects
  4. An expert group estimates the basic estimate in man hours and costs
  5. A facilitator leads the estimation group through a Successful Principle (Iterative Estimation Rounds)
  6. Subsequently, the facilitator and the project team prepare a report
    1. The overall project of the project
    2. The project’s overall prerequisites, risks and opportunities
    3. Project base estimate and a robust budget
    4. Top10 conditions to mitigate risks and associated Top 0 improvement opportunities
  7. The project manager presents the report and a plan for the steering committee or project owner and sponsor
  8. The project to be corrected and a new estimate can be implemented at the changed points

Valuable Results:

  • A robust budget and plan – that keeps
  • List of Top10 uncertainties for project management to handle
  • Including optimasation proactively and early in th eproject
  • Input to risk and opportunity analysis, and moreover important assumptions
  • Common stakeholder alignment and understanding of the project
  • Team building and anchoring in the organisation
  • Less stress in the organisation and employees and less overtime work
  • For projects that states compeding offers the company can e.g. choose P(80), P(70), P(50) or P(40) to reflect the company strategy.

Potential Applications:

  • Estimation and risk assessments of business cases
  • Estimation of project budgets
  • Estimation of schedules possibly combined with Monte Carlo simulation
  • Purchase of own house or car
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Project Thanet Wind Farm. Curtesey: DongEnergy

Application in the Oil Industry

For many year companies in the oil industry have been using The Successive Principle. E.g. for calculation budget for e new olil rig orrelocating an oilrig.

Such projects are very complex at a very high cost and sootime at a low margin. hence, it is outmost important beeing able to forsee the cost and timelime with good accuraccy.

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Decommissioning of Swedish Nuclear Power Stations

A Swedish organisation makes every three year a new estimation of the cost fo decommissioning the neuclear power plants. This is a very complex and demandig process and involved a high number om entrepreneurs, certification bodies, authorities etc.

However, by using The Successive Principle the organisation gets a rather precise estimate of costs and time for such a large project.

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