The Twilight of CPM: Embracing Network Analysis in Project Management

The era of the traditional Critical Path Method (CPM) and PERT in project management is reaching its twilight. Network analysis is a superior approach that optimizes activity chains, manages milestone significance, discerns and highlights the importance of project participant roles, and mitigates risk. This groundbreaking shift allows project managers to visualize the complexities of megaprojects and adapt their strategies accordingly.

Complex projects, such as megaprojects, are characterized by intricately interconnected temporary networks of activities and networks of diverse internal and external participants, requiring careful coordination and management to ensure successful completion. The seamless integration, meticulous planning, and effective coordination of these networks are vital in ensuring successful project completion and optimal outcomes.

In this discussion of Project Networks, we focus on the critical path, a traditional and effective method. DuPont initially developed the Critical Path Method (CPM) in the 1950s to streamline project management by identifying the longest sequence of tasks in a project, which determines the shortest possible project duration. Despite its proven effectiveness, the CPM is limited in its ability to address the complexities of modern megaprojects.

The critical path, once the linchpin of project management, is just one of a multitude of outlier paths. This can be clearly seen in the figure below, which plots the path lengths (in days) from a capital project schedule on the x-axis. Each path links activities from project start to finish. Risk-weighting these paths based on internal characteristics and external insights from similar projects can reveal that some other outlier paths may become the Critical Path with more probability. As projects unfold, unforeseen events can quickly bring these paths to the forefront, making the traditional CPM approach obsolete.

By visualizing the project as a system, network analysis simplifies the process of identifying risk, uncovering connections, and determining the most impactful changes and interventions.?This approach, known as the "inside view," focuses on the project's internal characteristics, resources, activities, and relationships. In contrast, the "outside view" emphasizes learning from previous track records.

Network analysis bridges the gap between these two perspectives by mapping learned risks and records to specific nodes, such as activities or milestones within the project network. This synergistic?combination multiplies the benefits of both views, creating a robust foundation for effective risk reduction. In the case of the Critical Path, it can uncover the probabilities associated with any outlier paths that may potentially emerge as the new Critical Path, along with the corresponding participant roles. This empowers project managers to proactively prepare and adapt to the ever-changing project dynamics.

The project network state during planning heavily influences its evolution during execution. By mapping the risk model to the project network to the activity level, we pave the way for better decision-making and improved project performance.

Outlier paths and risk weighting of activities in a project schedule are discussed in much more detail in our paper to be presented at the #EURAM annual Conference at Trinity College in #Dublin

The Critical Path Method does not disappear. It is subsumed into network analysis, transforming it into a facet of a more comprehensive approach enabling project managers better to understand the intricacies and interdependencies of various activities while still utilizing the strengths of CPM. This holistic approach enhances the management of complex projects by considering all aspects of project performance, ultimately resulting in more effective decision-making and improved project outcomes.

Today, with the advancements in technology and the ever-increasing complexity of projects, it is essential to evolve from traditional project management methods and embrace the future of project management with network analysis. By leveraging the strengths of both the inside and outside views, we can revolutionize the way we manage and execute projects, ensuring success in an increasingly complex world.

At Cybereum , we're dedicated to helping projects transition to this new era of project management. If you're ready to explore the potential of network analysis and other innovative digital solutions, reach out to us for a free consultation.

References:

Natarajan, A., 2023. 'Maximizing Megaproject Performance and Impact with Digital Technologies: The Role of Network Analysis, Machine Learning, and Blockchain', EURAM 2023, Dublin, 14-16 June.