The Triple Constraint in Project Management: Time, Scope & Cost
In parallel with the acceptance of PMBOK and Prince as accepted standards in Project Management, (“PM”) a veritable industry has grown up around Project Management offering help and assistance with understanding the concepts behind the standards.
One such concept is the Project Management Triangle, “PMT”.
One of the more difficult tasks in Project Management is scheduling or rescheduling a project and taking all the constraints into account. The Project Management Triangle, also known as the Triple Constraint or Iron Triangle, attempts to set out a model of the project constraints. Used in tandem with Project Management and scheduling software (often the same thing) it makes the job a lot easier.
First encountered in the 1950s, it assumes:
- Quality is affected and limited by Scope, Budget, and Timescale
2. The PM can make trade-offs between constraints
3. Changes in one constraint can have knock-on effects on other constraints
You should note that the PMT can not and does not:
- Hold all the constraints
2. Assume that trade-offs are always possible. Sometimes they are not
3. Provide assurances that quality is maintained
Another approach is to redefine the three constraints as Finance, Time and HR. A common technique is using the rather simplistic approach of applying more resources to reduce timescales. Unless costs reduce in other parts of the project by shortening deadlines, costs will inevitably increase.
If we now look at Time, Cost and Scope in turn:
There Are Three Primary Project Constraints:
1. A project and its subordinate tasks will have defined end-dates. Defined end-dates fixes the amount of time available for trade-offs. Time is generally uncontrollable, but failure to meet deadlines is not acceptable. Failure can be for any number of reasons but usually follows a lack of resources or inappropriately assigned resources.
2. A project will have an agreed budget. The usual assumption is that a project is saveable or completed more quickly by throwing money at it to buy more resources. That is not always true or possible.
3. The project scope is defined in the project charter and supporting project documentation. Scope changes will affect both time and cost. It is not always possible or advisable to tinker with the project scope outside formal change management processes.
What is the Project Management Triangle?
The project management triangle defines the basic constraints that a project operates within, namely:
If we now look at Time, Cost and Scope in turn:
1. Time Constraint
A project is broken down into the tasks needed to complete it, and the relationship between each task. Task dependencies need to be taken into account, as do task priorities.
The process includes the creation of accurate estimates of the time needed to complete each task.
The output of this step is a Work Breakdown Schedule (“WBS”). A WBS documents the work effort for each task and rolls them up into stage and total work effort.
There are several ways to create a WBS, but one of the more common is to use a previous project of the same type as a template. Experience also counts as does knowledge of the work pattern of individual resources assigned to tasks.
2. Cost Constraint
Costing is a bit of a black art. Some costs can are stated exactly, but some are more of a bit of estimate (better known as a guess). Knowns include staff costs, equipment rental, and subcontractor fees. Unknowns include some outsourced fees and project contingency. Simply put, it is is the typical accounting subdivision of fixed and variable costs.
There are many tools available to help, spreadsheets, for example. Data can be drawn from the organization’s systems, for example, wage rates. What also needs attention, particularly in longer projects, is cost escalation. Wage rates will go up, subcontractor fees may have inflation-linked escalations, and other indirect costs may vary.
All projects should include a contingency to draw on if needed to cope with variations. It can be a simple percentage of the total estimated project cost. Sometimes for a more detailed calculation, it is carried out as with risk, the likelihood of occurrence, the cost of mitigation, and the cost of recovery giving a contingency cost.
3. Scope Constraint
The Scope of a project is a formal statement of what a project is to deliver. It is a combination of the high-level requirements set out in the original statement of work and refined in both the project charter and project plan.
Changing the Scope is not easy and not generally advisable. Changes to Scope will bring changes to the WBS, and therefore to project cost. Inevitably timescales will change.
All proposed changes must be put through Change Management. Unapproved changes are highly likely to ensure that the project will run over time and budget. In severe cases, it may fail to complete or complete without achieving its original objectives.
For longer projects, change is inevitable. The business environment today is one of rapid and frequent change, and businesses need to be quick and flexible to meet changing market demands. Coping can be a real headache for PMs. It is often best to drive these types of changes through change control to ensure that all stakeholders are fully aware of the nature of the change, why it is needed and the potential effects on time and cost if it is approved.
A second consideration is that of quality. A task may be done well in a given time, but adequately in a shorter time, leaving some time to be traded off for other tasks.
The Project Management Triangle has become an accepted tool in the PMs armory and provides a valuable framework during the PM process. There are, however, as always some caveats and things to consider.
Of the three constraints of time, cost and Scope, changes to either one imply changes to one or both of the others. If you look at the triangle model, change one side, and you change the other two.
Time and Cost constraints are consistent. However, Scope means different things to different people and affects their analysis of the Project Management Triangle. This ambiguity leads to endless discussions and interpretations of a project plan and can lead to some interesting conversations in a Change Management session. If you take a literal view of the triangle, with each constraint as one side, then changing one side changes the other two.
Over the years, the Project Management Triangle has evolved, and some different interpretations of the triangle have emerged using different or slight variations on Time, Cost and Scope. Time has tended to blur the value of the Project Management Triangle and introduced an element of flexibility in its interpretation.
Common Variations Are:
STR stands for Scope, Time and resource. It is mathematically based, converting the triangle into a mathematical expression, S = TxR. It states that the Scope of a project is directly related to the time and resources applied to it. In short, if you want to reduce Scope, you need to reduce time and/or resources.
Quality at the center.
In this variation, the center of the triangle represents quality, clearly differentiating quality from Scope. The Scope is the deliverables and the project specification.
Moving Quality to the center demonstrates that any change to any of the three parameters potentially affects the quality of the finished product.
People at the Centre
In 1997, a research paper by Kliem and Ludin further modified the PMT to put People at the center. They concluded that resource management was the key to project success, irrespective of how well the rest of the project was organized and managed.
There is a raft of tools and techniques to assist the Project Management with the planning and execution of a project, of which the project Management Triangle is one. However, the Project Management Triangle has been around for at least 70 years, and many observers think it is not keeping up with the times and is in effect obsolete.
In particular, by having only three constraints, it does not easily cope with today’s complex projects which can involve many different variables touching on project planning and performance. For instance, it has difficulty in dealing with the integration of the Internet and Social Media because the associated resources and constraints are very much in the hands of third parties.
Some observers also feel it does not address stakeholder satisfaction and pays insufficient attention to quality. Others also point to a lack of emphasis on achieving measurable business objectives.
However, it is a very good starting point since it brings to the forefront the fundamental practical aspects of project management.