There is a saying that time is money and never is this more apposite than when considering the impact of delay in a project.
Microsoft Project can be used to illustrate the cost of delays quite powerfully. A lot of projects will have an “opportunity cost”, there will be awareness that being late has cost implications. If you are aware as to what these financial measures may be you can create a Work Resource to model them.
In the example used for this article we will model a delay cost of £1000.00 per day with maximum units being 100%. Create the resource and define it’s A cost tab rate as being £1000.00/day.
Next create two Milestones called “Planned Finish” and “Scheduled Finish” and indent them beneath a Summary Task called “Project Delay”. Link the two milestones to the milestone that marks the end of your schedule, for example “Project Complete” (I always recommend that you mark the end of each stage/phase/summary task with a Milestone). In this example “Planned Finish” and “Scheduled Finish” will both have the same predecessor “Project Complete” linked with the default dependency Finish to Start with a lag of “0” days. When you have done this the Summary Task “Project Delay” will have a duration of “0” days reflecting the two milestones within it.
Assign the resource called “Delay” to the Summary Task “Project Delay” using the Assign button from the Assign Resource Dialogue Box (ALT+F10) – it will show as being assigned 100% and costing £0.00. By default resource names are not displayed against Summary bars in the Gantt Chart view so don’t panic if you cannot see it.
At the moment your Delay Resource is costing your project £0.00 – you can check this in the Cost column displayed in the Assign Resource Dialogue Box, but only in the 2007 version, sorry!
The next step is to set a Finish no Later Than (FNLT) constraint date on the “Planned Finish” milestone to reflect the target completion date for your project. If you have set the correct “Hard Constraint” (indicated by a RED calendar icon) at this point and have followed the steps as described you might get a message from the planning wizard warning about a potential for there to be a scheduling conflict, if you do get this message elect to continue using the Finish no Later than constraint. In this example I have a project scheduled to finish on 9th September and a FNLT constraint date set for 11th September.
If the project is delayed by one or two days there is no impact, both the milestones within the Project Delay summary task will be scheduled later in time but the summary task will still have a duration of “0” days.
If a task is delayed in your project and the target end date is breached the planning wizard will warn you of a “Scheduling Conflict” – elect to continue and allow the scheduling conflict. Your Project Delay summary task will now reflect the number of working days delay your project has suffered and crucially the cost to your project.