Initial Delivery Index
Original Publication Date: 2009-May-29
Included in the Prior Art Database: 2009-May-29
A method to predict a troubled project to avoid financial losses. Though there are many ways of predicting the problems encountered during the project life cycle and at the end of a project, there are no known models that can predict a troubled project or an anticipated troubled project. This Initial Delivery Index (IDI) is a predictive model and tool that can be used effectively during the bid stage to predict future Project Management Risk (PMR) scores with a high degree of confidence.
Initial Delivery Index
While delivering a project, client dissatisfaction can lead to financial loss for the
deliverer. Early recognition of troubled projects due to underperformance can result in
avoiding profit leakages. Typically, project performance studies traditionally look
backward in time and reflect "root causes" or "lessons learned" of "what went wrong" or
"what went right" during execution of the project. The proposed method for predicting
troubled projects are based on a concept of knowing what is termed as an Initial
Delivery Index (IDI), a feature that quantifies the intuition and experience of a Risk
Manager (RM) associated with the project by asking several questions to the risk
manager in the proposal evaluation stage of the project.
Traditionally early prediction is achieved by; collect data from thousands of projects
attempting to identify patterns that will help in early recognition of troubled projects.
Efforts have shown, for example, that Risk Ratings correlate to Project Management
Risk (PRM) ratings only for low risk projects and that Client Satisfaction scores and
Keys reports have no correlation to PMR ratings.
One concept might be that the factors analyzed in the "root cause" studies are the ones
where data is available in the organizations existing financial and QA systems and that
there is another set of well known data that is not being systematically reviewed and
utilized. The IDI model quantifies and uses the latter set of data. A significant
opportunity exists to better leverage the experience and intuition of Risk Managers and
Line reviewers to look forward and quantify 'the odds' of the next likely troubled or
successful project and plan appropriately.
The IDI is a predictive model and tool that can be used effectively during the bid stage,
to predict future PMR scores with a high degree of confidence. The IDI aligns
strategically to develop, manage, enhance, and support initiatives to improve
The Initial Delivery Index quantifies the intuition and experience of a Risk Manager by
asking questions in the proposal evaluation timeframe. The answers to these questions
put forth to the risk manager are then processed through a concept of factor analysis
and a decision tree statistical model is used to predict a rating, for example "A", "B",
"C", or "D", which is useful in and during the Project Management Review cycle of the
project. The model is also capable of computing the associated probability of each
rating. The ability to predict a troubled project with a high degree of confidence before
the deal is presented to the client allows the management to further evaluate the risks
and implement action plans to mitigate any such risks associated with the projects. For example, a set of sample questions are given below:
How friendly is the client environment to the deliverer?
How favorable is the contract structure to the deliverer?