After a successful career in leading large organizations including Director of Operations for a five billion
dollar enterprise and CEO for a $750 million company, in 1996 Daniel Walsh founded Vector Strategies, a
Theory of Constraints, (TOC) focused company. He is the co-founder of Exepron a 21st Century project
management, SaaS cloud based, real time collaborative, critical chain software solution.
He is a recognized expert in developing and implementing powerful strategies that quickly and
dramatically improve market presence and profitability. He has worked with companies in the
shipbuilding, pharmaceutical, construction, engineering; software, manufacturing, aerospace & defense
industries. Numerous Fortune 100 companies are among his clients, including Textron, IBM, Boeing,
Lockheed and the U.S. Department of Defense.
Daniel Walsh is a sought after lecturer, coach, strategic thinker and is a trusted advisor to many senior
corporate executives including TOC consulting expert for the Institute for Defense Analysis. In addition he
co-authored the seminal Theory of Constraints Handbook and written numerous articles and papers. He
currently is a member of numerous corporate boards and in addition is the former Chairman of the
Theory of Constraints International Certification Organization Board, the global professional organization
dedicated to setting the standards, testing and certifying competency in the Theory of Constraints.
State of Utah
MRO Aerospace. 12 months of backlog
scheduled in 10 days of engagement.
700 Developers on Exepron
Traditional PM Methods
PMI Report 2014
Annual Survey of 1,100 accredited member respondents
Traditional PM Performance
10,649 projects
200 Companies
30 Countries
50% failure Rate
https://podio.com/site/budget-busters?mkt_tok=3RkMMJWWfF9wsRolsqvKZKXonjHpfsX67ugtUae1lMI%2F0ER3fOvrPUfGjI4FT8pmI%2BSLDwEYGJlv6SgFQrHDMa15ybgJWBQ%3D
Years Late
because :
we must
Control
Costs
In order to
In order to
Successfully
run our
business
we must
Conflict
In order to
we must
because :
we must
Focus on
meeting customer
schedules
Maximize
Throughput
because :
Control
Costs
we must
In order to
In order to
we must
Manage
Well
Conflict
In order to
we must
because :
we must
Protect
Throughput
because :
Control
Costs
we must
In order to
In order to
Manage
Well
In order to
we must
because :
To What to Change ?
Protect
Throughput
10
The Problem
The Problem
CCPM will (conceptually) positively impact cost by
significantly improving management of Schedule and
Scope Maybe!
CCPM methodology is a Throughput focused solution
and was not intended to manage Cost World Metrics
Attempts at applying Throughput techniques to
reconcile Cost World methodology with Throughput
methodology in CCPM have failed
WHY?
12
The Problem
Conventional Approach
The Cost & Duration allocated at the task level consists of:
The Touch Time work hours to complete the task
Embedded Protection against Variability
An industry recognized efficiency factor
Total Time
Task Duration
Total Cost
CCPM Approach
The Cost & Duration allocated at the task level consists of:
The Touch Time Duration to complete the Task
Extract Safety from tasks
CONFLICT
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CCPM Paradox
Inertia Since CCPM is Throughput focused then
all metrics must be Throughput metrics
Many professional organizations, companies and
individuals believe CCPM is a half baked solution
Many companies will not even consider CCPM
Conflict with Cost Metrics during Implementation
Blocks support from many stakeholders
Jeopardizes Sustainability - Source of Many failed
implementations
WHY?
14
The Scorecard
CEO, Board, CFO, Comptroller, Treasurer, Auditors;
Contract Administrators, Financial Analysts and
Customers using the Official metrics to evaluate
project performance
Even if Schedule & Scope is on track, may be in
conflict with Financial Oversight and Compliance
requirements
CCPM not providing Critical Cost Information needed
by Decision Makers
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Future
Budget at Completion
Cost
Variance
Schedule
Variance
Cost
Cost World
Planned
Value
Actual
Cost
Todays
Date
Earned
Value
Time
Delay
Time
16
Role of Metrics
Throughput World
Source: www.Exepron.com
Role of Metrics
Have one set of
metrics to make
global and local
decisions
18
SIMPLICITY
Einstein on Simplicity:
Everything should be made as
simple as possible, but not simpler.
Ockham's Razor
Among competing hypotheses that predict equally well, the
one with the fewest assumptions should be selected.
William of Ockham (c. 12871347), an English Franciscan friar,
scholastic philosopher and theologian.
19
The Solution
20
Mobius Effect
A
Cost World and Throughput World
inside the the same CCPM solution
21
Control
Costs
we must
In order to
In order to
Manage
Well
In order to
we must
because :
To What to Change ?
Protect
Throughput
22
Solution
Render unto Caesar the things that are Caesar , instead of
perpetuating and challenging the universally accepted precepts of
cost accounting, rather embrace them and incorporate into CCPM
thinking.
The CCPM tools must develop this capability, reconciling and
mapping all of the costs and earned value directly to a specific task
in the projects CCPM schedule. This becomes an integral part of
the:
Planning phase Scheduling phase Execution phase.
Source: CCPM: Assessing the Efficacy and Feasibility, Daniel P. Walsh; www.exepron.com
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Collaborative Business
Solution
CCPM must not be limited to just Planning, Scheduling
and Execution of the work content
Must expand and embrace the Financials Cost and
Revenue
Offer value to all of the Stakeholders
CCPM must become a TOTAL Business Solution
CCPM has the unique potential to permeate
throughout the entire Enterprise
24
Metcalfs law
Network Usefulness
Network Nodes
25
Solution
The cost and earned value are calculated in the Cost world and
maps to the schedule that is calculated in the Throughput world
We now can now mange the three pillars. The cost data can be
directly mapped back to the CCPM task. It might be helpful
visualizing two parallel requirements that will have to be
updated in execution.
We will update the cost, earned value, (revenue) and update the
time remaining in the task. The additional effort is very minimal
and the benefits enormous.
Solution
CCPM
PRO
Throughput
Metrics
Cost
Metrics
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