The Iron Triangle of Project Management
Balancing Your Budget, Scope, and Schedule
(Also known as The Triple Constraint of Project Management.)
You're managing the implementation of a new reporting system for your organization. As your project progresses, things happen differently from how you'd planned. You find that you need extra computer hardware, and some tasks have taken longer to complete than you originally predicted.
To get the tasks completed on time, you consider recruiting more contractors. But, to do this, you'd have to take other costs out of the project's budget. You think about not buying the extra computer hardware that you need, however, this would mean changing the project's scope, so that some functionality isn't delivered.
In many projects, the budget, scope and schedule are closely linked. Changes to one of these three key constraints will most likely affect the others, or impact on the quality of the project.
This article examines the relationship between the three constraints of budget, scope and schedule, and looks at ideas and tools for helping you deal with the issues that can affect this relationship.
The Iron Triangle
The project mandate and project charter identify the project's objectives. At the core of these documents is a requirements statement that says what the project needs to deliver. This includes a definition of what is in and out of scope for the project. It also establishes the project's deadlines and its budget.
These constraints of scope, budget, and schedule are known as the "iron triangle" (see figure 1).
These constraints are considered an iron triangle because you can rarely change one constraint without also impacting the others. The way that you deliver the project within these constraints impacts the quality of the project's outcomes, either positively or negatively.
For example, suppose your project mandate is to launch a new standalone IT system. The design phase has overrun significantly. You could consider several options:
- Extend your project timeline – Your stakeholders will get the system later than planned, which may cause issues, and may not be an acceptable solution to them. It will also take longer to deliver, and therefore will increase labor costs. However, there may not be any negative impact on the quality of the end product.
- Re-plan the rest of the project to deliver future phases more quickly – This may increase project risks if areas such as testing and training are not completed in full. Therefore you may not meet the original quality objectives. This could also increase the cost of the project.
- Change scope – You could take elements of scope (functionality, systems, interfaces, processes automated, or departments supported) out of the project so that it can be delivered within the agreed timeline and budget. This will not meet the organization's original expectations of deliverables. Overall costs may also increase if these scope areas are delivered at a later date.
The art of project management is for the project team (not just the project manager) to implement the project within these constraints of scope, schedule and budget. When you have an issue that must be resolved, consider which option gives you the best solution – not necessarily the ideal solution – for your particular project.
In project management, there's a saying that, when considering the three factors of fast, cheap, and good, you can only choose two:
- If you deliver the project quickly and cheaply, then it probably won't be very good.
- If you deliver it quickly and well, then it won't be cheap.
- If you deliver the project well and cheaply, you won't get it very quickly.
While this doesn't always happen, there's some truth in these statements. If you have difficult issues to resolve, make sure you think carefully about the solution, and consider its impact on other parts of your project.
Use this framework to help you make decisions about issues that affect the iron triangle.
Before you start, discuss with your sponsor the high-level options appropriate for your project. Understand any flexibility you may have in your project budget, delivery timelines, scope, and quality requirements.
- Review your critical path. Are there tasks that you can remove from this?
- Re-plan to determine if you can do tasks differently, or in a different sequence, to reduce your overall delivery timeline. Are there tasks that you can do simultaneously to reduce the overall time required?
- Is there contingency time built into the plan in later phases? Can you use this contingency time now, or would this just delay the problem to a later phase?
- Is it appropriate to move some scope components into a future project phase so that you can deliver the current phase on time?
- Review the tasks included in the plan. Are they all essential to deliver the required project outcomes? Are any tasks unnecessary?
- Is the change to the scope essential to delivering this project's objectives in this phase? Would it be more appropriate to a new scope request to a "wish list" to consider later?
- Can you move some scope areas into a later phase?
- Is the definition of business requirements strong enough for the project to continue? Should you suspend the project and review the business requirements?
To reduce the likelihood of the scope changing during the project, get stakeholder involvement and approval early on in the business requirements and design phases, so that your project scope definition is as complete as possible.
Also, make sure that you have a robust scope control process in place, so that you don't make promises to stakeholders that you can't keep.
- Can you deliver tasks more cheaply? Can you use cheaper components or cheaper resources? Can you do this without negatively affecting the required levels of quality?
- Do all of your planned tasks contribute to the project's outcome? Can you stop any tasks?
- Can you reduce project team expenses? For example, can you reduce travel costs?
- Do you have any contingencies that you can use?
- Beware of "scope creep" –This is when you allow many small changes to be made to your project's scope without thinking carefully about the implications. This can then lead to a set of changes that you would never have accepted if they had all been presented at once. If you suspect that this is happening in your project, conduct a project review to help you see the project as a whole. Then decide how to take things forward.
- Remember your deliverables – Don't forget about what you're there to deliver. Focus on the bigger picture when making decisions, and make sure that you're managing benefits actively.
- Get project sponsor and steering group support – Make sure that you keep key stakeholders informed and on board with the status of the project. Communicate serious issues, major risks, and scope change requests as soon as you can. Steering group members have the advantage of not being involved in day-to-day delivery, so they can often see things more clearly.
Focus on your project's desired outcome – For example, it may be possible to re-plan a project to deliver on schedule by reducing the time allocated to training or support before you deliver the end-product.
If budget is available, you may be able to adequately make up for this by increasing the level of post-implementation support and training.
The challenge of project management is to deliver the project's objectives within the constraints of the "iron triangle" of budget, schedule, and scope, without affecting overall quality.
There are many tools available to support you during the project lifecycle. As a project manager, you must make choices based on what's required for the project to achieve its overall objectives. Take positive action quickly if there are issues to resolve, if there are risks to manage, and if there are problems to overcome. This is what good project management is all about!