Systems thinking for managing projects

Systems thinking is a discipline that his developed substantially over the last few decades but most project managers remain unaware of its potential power in helping analyse, refine and deliver their complex projects. In fact, over the past 30 years several hundred of the world´s largest and most complex projects have successfully used the technology to improve their outcome. Traditionally a time-consuming technique to implement, it has only been utilised for the most complex projects. However, these methods are fast becoming more accessible for large projects in general. Through modelling the rework cycle and the feedback loops that drive it, using system dynamics it is possible to analyse and hence improve the dynamic behaviour of our projects. In this paper we show how a system dynamics model of a project is constructed and used to assess the project outcome. Examples of its application include: cost versus schedule trade-offs, project improvement strategies, risk assessment and assessing resource constraints. The ability to deliver such answers quickly and accurately during the bid and project definition phases provides the project management team with a powerful decision making tool for project strategy formulation. The improvement in project outcome that can be achieved at this stage of the project is massive because of the low cost of change combined with a high leverage into project commitment, risk mitigation and outcome that is available early in the project´s lifecycle.