In 2018, we began working on technology to automate a methodology for calculating the impact of schedule delays. We based it on MIP 3.4 from the AACEI Recommended Practice 29R-03, Forensic Schedule Analysis. Its official name is Observational / Dynamic / Contemporaneous Split, known more commonly as a half-step analysis.
Half-step delay analysis answers the question: Which changes caused the finish date to move between two schedule updates, and to what extent is each change culpable? This methodology splits the changes into two halves: progress-related changes and schedule revisions. It is conducted by starting with the first schedule update, applying changes observed in the second update individually, and monitoring the impact on the finish date.
For those of you outside of construction project management, it’s likely that you’ve never heard of a half-step analysis, or if you have, it’s unlikely you’ve ever tried to perform one. And yet, these analyses are conducted by many consultants and schedule analysts every week, with billions of real money at stake each year. Most professional schedule analysts who specialize in construction projects are at least familiar with the methodology.
So why is it that outside of construction projects, half-step delay analysis is virtually unknown and seldom practiced?
The answer is related to economics. In other words, follow the money. In construction projects, the disputes at the end of the project can result in millions of dollars (or pick your favorite currency) of damage awards. With that much money at stake, each side (owner and contractor) typically retains legal representation, and the law firms hire schedule analysts to perform a delay analysis on the schedule updates and quantify the impact of each delay and change to the schedule. Those analysts may testify as expert witnesses in court, defending their conclusions drawn from the analysis.
Following the money: Each side pays a law firm that pays a schedule analyst to save or gain significant damages. These types of analyses require an experienced schedule analyst. They can take several days to perform, depending on the schedule size, the number of schedule updates, and other factors. Half-step analyses are expensive, but the high stakes justify the expense.
When we first began showing our technology to consultants, some had an alarming reaction. They were making a good living performing these analyses, and they wondered whether their income would be threatened by technology that automated the analysis. Was this technology an existential threat?
In truth, not at all. The automation of delay analysis is no more likely to put schedule analysts and consultants out of business than the calculator put CPAs out of business. I don’t pay my CPA Harold for his ability to do math; I pay him for his expertise, experience, and what’s in his brain. If I value him solely because of his ability to crunch numbers, I am likely overlooking many other important qualities I should consider.
Calculators (and later computers) changed the accounting profession, but it was an economic change. Calculators don’t make mistakes and are thus more accurate. There is no doubt that calculators are faster. So calculators give the same results in much less time, which reduces the expense of the work performed, not the value of the work performed. Calculators and computers were economic disruptors.
In the same way that calculators didn’t eliminate the need for consultants, automating the calculation of the delay analysis does not diminish the need for schedule analysts and consultants. It simply helps them do their job faster by automating the calculation portion of the delay analysis. The analysts use their brains in many other ways, including selecting the correct data, applying a defensible methodology, asking the right questions, examining the mountain of other project documentation, reconciling what the schedule says with what the project stakeholders say, etc. It’s a very long list. Even with AI making leaps and bounds, we are a long way off from technology replacing the experts.
While the technology is not a replacement for an expert, it does put this type of analysis within the reach of many more people for whom it previously was not cost-effective. For anyone who receives Primavera P6 schedule updates and needs to understand what actually caused the delays, it provides a quick and easy way to focus on the schedule changes that mattered.
For information on the technology or to schedule a demo, visit https://steelray.com/DelayAnalyzer/DelayAnalyzerP6.php.