System Dynamics in Project Management: Assessing the Impacts of Client Behavior in Project Management

Abstract

Major projects generally involve a “client” and a “contractor”. The client often essential for approving intermediate milestones or documentation, can however, cause detrimental effects to the project, requiring changes to work scope or the product definition, delaying documentation approval or essential information, requiring too much reporting, or tightening milestone schedules. If the relationship starts to deteriorate, positive dynamics can be set up, and many such are discussed in this paper. These effects must be analysed and quantified: to keep control of the project costs and time, to estimate correctly the true cost of contract amendments, and where necessary to make auditable claims against the client. Traditional project management tools are based around decomposing the project into constituent cost or time elements. These techniques have proven inadequate on their own for analysing and managing modern complex projects, which are increasingly becoming more complex and intra-related. A holistic approach must be used, particularly to deal with systemic effects such as multiple client actions. A natural technique for modelling such effects qualitatively is cognitive maps/ influence-diagram: a natural extension is to develop these into System Dynamics (SD) models, able to capture both hard auditable systemic effects, and the softer “human” effects that play an important part but are harder to quantify. Academic and practical work has continued to demonstrate the usefulness of SD in project management, particularly supporting dispute resolution.