17 Oct 2009

Sample Essay: Network Measurement: Effectiveness and Efficiency

Introduction

Effectiveness and efficiency can at the same time or simultaneously perform at high standards in any given business organization. While effectiveness refers to the levels at which any organization realizes its goals through managing to accomplish set tasks, efficiency is highly related to the magnitude of resources utilized to achieve these goals of the organization. (Daft and Lane, 2008)

This is a report set to answer the question, “Which are the various metrics used to measure the effectiveness and efficiency of a network in pursuit of organizational goals?” The report will answer in a detailed manner this aforementioned question.

There are three approaches towards the metrics used in a network analysis. These are: PERT, CPM and Event Chain methodologies.

PERT

PERT is in full known as Program Evaluation and Review Technique and is used in the evaluation of the duration of a program’s schedule. It puts in account the fluctuations associated with every activity in a project. The method usually applies various statistical measurements to accommodate each activity’s fluctuations.

Before these measurements are tackled, it is of essentiality to show the procedure used under PERT. This is as follows:-

Identification of particular activities as well as their milestones

Determination of the activity-sequence

Net-work diagram construction

Estimation of the durations per every activity

Critical path determination

Updating of the PERT depending upon the progress of the program / project.

In PERT, the requirement is that each activity should be provided with three kinds of estimates. These are: Optimistic, Pessimistic and most likely times.

Under the PERT procedure, the optimistic time denotes the shortest duration an activity can take to complete. Commonly, to determine the Optimistic time three standard deviations are utilized (that’s, from the expected time) to reduce the level of error in calculating the times.

Pessimistic time on the other hand is the longest duration an activity may take to finish. Also, here three standard deviations are applied from the expected time.

The Most likely time is the highest probability that an activity will be through in a given set time. However, this is not the same as the expected time of completion.

Therefore, using the three types of estimates, expected time can be computed. This is because PERT, during the time estimation, takes an assumption of beta probability. Thus, the formula below indicates the weighted average to calculate the expected time duration. Take Te to denote expected time.

Te = Optimistic time + (4 X Most likely time) + Pessimistic time 6

Using a hypothetical situation with activities A, B, C, D, E and F:

Table 1 can be used to illustrate PERT and the calculation of the expected time using the formula indicated before.

PERT

Activity         Optimistic      Pessimistic     most likely      expected time

A                         5                        15             10                    10

B                          2.5                     7.5            5                      5

C                          1.5                     3.5            2.5                   2.5

D                        5                        10              7.5                   7.5

E                         2                         4               2.25                 2.5

F                        1                         5                6                      5

Note that it’s just by coincidence that some of the most likely times are equal to expected times.

Critical Path Method

An organization’s efficiency and effectiveness can be enhanced by utilizing CPM (critical Path Method) as well. CPM is used to show the critical path in a diagram of networks for the purposes of any kind of an activity’s process of planning. The CPM shows these activities using a diagram of networks.

In the process of risk avoidance and ensuring efficiency and effectiveness in a program management, it identifies activities dependent on each other. An example is where a given activity cannot be initiated before completing the other. Every of the activities in the network diagram has an estimated duration. Also some activities can take place at the same time.

CPM works on the basic idea that if one activity is delayed along the critical path, the whole project would be delayed. A CPM schedule takes that of a PERT but for the last step. (Baker, et al, 2003)

Using the previous example, a Critical path can be determined and this is after a Network diagram is presented (That’s, diagram 1).

Table 2.

Activity duration (wks) Preceding Activity

A                    10                    –

B                     5                      –

C                     2.5                  A

D                    7.5                  A

E                     2.5                  C, B

F                     5                     E, D
C = 2.5

A=10                                    C=2.5

0                                                               12.5                 E=2.5

B=50

0
Critical Path

A-D-F =this is the critical path since it has the longest duration

Thus, the project takes 22.5 weeks

The arrows in the diagram show the activities, and the Circles show events of completion or commencing of an activity. The times indicated above the events show earliest start times while the ones below show the latest finish times. Latest start times are calculated from the earliest activity while the latest finish times are calculated from the last activity.

Event Chain Methodology

Event Chain is a methodology set to solve the Predicament of uncertainty in various time-based processes of a business. This method is basically dependent on six main principles. This are:-

An activity in the real life setting may not be a continuous and uniform undertaking. It usually involves some uncertainties and thus the question of risk arises. Events can either reduce or increase a project’s time schedule.

There can be a failure of a project due to the situation where a given event causing other uncatered for events. This is where the method borrows its name since these other events created are called event chains.

Subsequent to the definitions of events as well as event chains, a quantitative analysis can be performed by the aid of Monte Carlo simulation so as to tell the uncertainties and the quantification of the events’ impact. To prevent a double count as regards the factors playing part in the distribution and events’ results it’s essential to discriminate between the two.

One can prevent the negative effects of event chains by identifying the ‘critical chain of Events’. These are the events that are highly probable to impact on the project negatively.

Using historical data, the effect and the probability of events is measured. By monitoring the progress of the activities it helps in utilization of an up-to -date information in analyzing the project.

Lastly, it’s easy to analyze the uncertainties and risks in a project modeling. This is simplified by the observation of event chain diagrams to see the tasks and events’ relationship and how events affect other. (Inter Institute, 2006)

Conclusion

Thus, the conclusion is that to answer to the question,” Which are the various metrics used to measure the effectiveness and efficiency of a network in pursuit of organizational goals?”  PERT, CPM, and Event chain Methodologies are used. Also it’s of essence to note that Event Chain methodology is the most recent of the three methods used in a project analysis.

References:

Baker, S. et al. (2003). The Complete Idiot’s Guide to Project Management. Alpha Books.

Daft and Lane, P.G. (2008) Aise Management Cengage Learning EMEA.

IntaverInstitute. (2006) Project Decision and Risk Analysis Journal: Overview of Event Chain Methodology Retrieved February 20, 2009    http://www.intaver.com/Articles/RP_Art_EventChainMethodology2.html

NetMBA.com, (2007) PERT Retrieved February 20, 2009  http://www.netmba.com/operations/project/pert/

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