Iron Triangle of Project Management

Revision as of 16:09, 26 February 2021

Abstract

The roles of a project manager are numerous and one important role is attaining project success by balancing the competing constraints on a project with the resources available ^[1]. Without constraints, that would be a simple task and all projects would be good, fast, and cheap. Unfortunately, that is not the case as most projects must operate within some important boundaries concerning, scope, time, and cost. The interrelation of these components can make the difference between project success and failure and maintaining a balance between the three factors can help determine the overall quality of a project. The iron triangle is a model of these project elements and emphasizes that a change in one factor invariably affects the others. The theory helps project managers better understand the trade-off dynamics among these main constraints of project management. Even though the constraints of the iron triangle are a decent indicator regarding project management success, it is not necessarily the only marker of overall project success. The project scope can be delivered on time and within budget but ultimately result in an unsuccessful project because there are various other factors that help determine the effectiveness of a project. This article will describe the essence of the iron triangle, how project managers can apply the concept in practice, the main limitations of the theory, and some related concepts.

Big idea

Relation to project management

Figure 1: The iron triangle of project management, illustrating the interrelation of scope, time, and cost. Modified from Fundamentals of Project Management by Heagney ^[2]

Portfolio, program, and project management all operate in parallel and provide a structured way to align and effectively carry out organizational strategies. However, there is a difference in their focus and contribution to the attainment of strategic objectives and the theory regarding the iron triangle is primarily associated with project management. ^[3]

Project management is the application of knowledge, skills, tools, and techniques to meet a projects’ requirements. Effective project management consequently helps organizations to increase chances of success and meet business objectives. Poorly managed projects, on the other hand, may result in missed deadlines, cost overruns, and poor quality projects.^[1]

The iron triangle (also called the project management triangle) is a concept based on the triple constraints of project management and an important theory in the field. These constraints are limitations placed upon a project which the project manager and team must operate within. There can be various constraints on a project, but there are three essential constraints that operate on most projects. These constraints are scope, time, and cost. An illustration of the iron triangle concept can be seen in Figure 1. ^[4]

Constraints of the iron triangle

Scope

Defines the boundaries of the project and describes what the project must deliver. It includes the processes required to ensure that the project includes all the work required to complete the project successfully. The project scope is therefore about defining and controlling what is included in the project. The term “scope” can refer to either product scope or project scope. Product scope are the features and functions that characterize a product while the project scope is the work performed to deliver a product with some specified features. ^[1][4]

Time

The time constraint denotes a specific time frame or deadline within which the project must be completed and is often set by the client. This includes milestones and deadlines for each project phase. Completing a project within the given time limit requires proper scheduling and effective time management. ^[4]

Cost

The cost of doing the project is another variable that defines the project. The cost constraint is about the budget that has been allocated for the project which limits the total expense. It includes all financial resources available to complete the project within the prearranged scope. The constraint includes money for the workforce, materials, quality control, and more. Cost is a key factor throughout the project management life cycle and is often set by the client of a project. Therefore, the allocated budget can be fairly close to or far from the actual cost for the project.^[4][5]

The iron triangle is simply a model illustrating the relationship between these three constraints, showing that no constraint is independent of the others. If any one of them changes, at least one other variable will also change to restore balance to the project.^[5] As seen from Figure 1, the fourth part of the triangle is quality and sits at the center but is not considered one of its constraints. The quality of the overall project depends on the project scope, cost, and time spent on the project. In order to achieve project management success and deliver a quality project, a balance must be realized between the three constraints. There is no universal standard for quality and the definition of it depends on the project. Keeping a project on budget or getting it to market on time are examples of how quality can be measured and it depends on how it is defined.^[6]

Trade-off dynamics

The theory behind the iron triangle is essentially about the trade-offs between these constraints that form the end-points of the iron triangle. The trade-off dynamics of the constraints are described in Table 1, where the up-arrow (↑) denotes increase and the down-arrow (↓) denotes decrease, for the corresponding constraint.^[7]

Application

The big idea behind the iron triangle has now been presented and the question now becomes how can project managers use this concept in practice. The iron triangle concept is an essential element of a project manager’s toolbox as it is their role to balance the scope, time, and cost constraints to deliver the specified output. Projects often incur cost overruns and slippage in real life and the idea behind the iron triangle is critical for project managers to minimize the likelihood of that happening.^[2]

Setting the iron triangle constraints

Starting a project on the right foot is critical to its future success and the plans created during the project planning phase will help in achieving this. The project's scope, time, and cost constraints are set and defined in the planning phase and for that reason, the iron triangle concept should be utilized by project managers. That will expectantly increase the chances of a successful project launch. ^[8]

In the beginning, most projects have at least one element of the iron triangle fixed in place, i.e. it cannot be changed. For example, the deadline or allocated budget of the project might be non-negotiable. These fixed constraints are often decided by the stakeholder or client of the project but sometimes it's the project manager's to decide.^[6] The saying "good, fast, or cheap - pick two" describes this idea quite well and is commonly used within project management. The terms good, fast, and cheap refer to the three constraints of the iron triangle. The idea is that projects are commonly constrained to choose two of the three constraints and consequently give up the last one.^[7] This idea is demonstrated in Figure 2 and Figure 3.

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  Figure 2: Scope and time constraints are prioritized at the expense of cost.

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  Figure 3: Scope and cost constraints are prioritized at the expense of time.

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  Figure 4: Cost is the prioritized constraint at the expense of scope and time.

To explain the concept a bit more, let's consider Figure 2 as an example. The scope and time are prioritized in that scenario indicating the client wants the project to be delivered on time and of the highest possible quality regarding scope. To accomplish this, the project cost will rise as a consequence. The client of the project depicted in Figure 2 seems to have ample financial resources. Figure 3 illustrates a similar circumstance, except the time allocated for the project is not of importance. The project scope and cost constraints should be respected without a specific deadline. The client in this scenario has limited financial resources and will therefore have to be flexible regarding the schedule. Sometimes only one constraint is fixed and should not be changed as illustrated in Figure 4. This means that both the scope and schedule of the project will have to be flexible in order to keep the project on budget.

Controlling change in the iron triangle

According to the PMBOK Guide (6th Edition) there are five project management process groups and using the iron triangle is especially beneficial for one of them, namely the controlling process group ^[1]. Project managers can apply the iron triangle concept in the controlling phase of a project, i.e. when dealing with the inevitable changes that can occur in the life of a project. This fact that projects can and will change, presents challenges for the project manager. These changes often affect the constraints of the iron triangle and it is the project manager’s role to implement methods to deal with these changes to retain control of the overall project. The project manager should make necessary adjustments to keep the iron triangle balanced in order to maintain the quality of the project. This important task of project managers is summarized appropriately by the following statement from Fundamentals of Project Management: "If you do not keep the work current, you have no plan." ^[2][5]

Example of changes that can occur in practice and throw the iron triangle out of balance:^[2][5]

• Scope related changes
  • Additional projects are added to the existing project
  • Client calls with a new requirement for a feature
  • Market opportunities change
• Cost related changes
  • Management decreased the allocated budget for the project
  • Cost of raw materials increase
  • Additional human resources are required
• Time related changes
  • Deadline for project is accelerated
  • Time-related competition pressures occur

Like mentioned before, the fixed elements of a project are often dictated by the customer, but sometimes it is the project manager's job to decide which elements are most important to the project's success. When problems arise in a project that forces a change to be made, it is important to know which constraints can be adjusted and what action should be taken.

Practical examples of how project managers can use the iron triangle when a problem occurs, depending on if the related constraints are fixed:

• Problem arises on a fixed constraint
  • Course of action is generally clear
    • Example: A car feature takes more time to complete than estimated and the project manager signed a contract regarding the delivery of that feature (hence, the scope is fixed). The project manager can make changes to the unfixed elements. He must decide whether to delay the deadline or add resources to finish the project on time.

If the fixed side and the problem side are different, don’t give up. That’s the beauty of the project triangle; there’s always room to make changes For example, if your project has to finish on time and it has grown in scope, you can still adjust cost by adding resources.

If all three sides of the triangle are stuck, don’t panic. The project might be in trouble, but at least you know it’s in trouble and you have a good starting point to rethink the project’s goals or quality standards.

These ideas can be encapsulated into a step-by-step guide on how project managers can utilize the iron triangle concept in real-life, clearly showing that the decision-making process is made easy.

Step-by-step guide on how the iron triangle can be applied in practice:

1. Problem emerges in a project which forces a change regarding the constraints of the iron triangle.
   ⇒ Example problem: client calls with a new requirement for a feature.
2. Project manager must locate the problem on the triangle and find out if the problem is time, cost, or scope related.
   ⇒ The example problem is clearly scope-related as new requirements are being added.
3. Project manager must figure out which constraints can be changed to deal with the problem and maintain a balance to the triangle.
   ⇒ For this theoretical problem, the budget is non-negotiable. Hence, the project manager can only modify the schedule.
4. Project manager must adjust the flexible constraints to fix the problem and deal with the necessary change.
   ⇒ In this case, the project manager can only modify the schedule. He decides to push back the deadline of the project to a later date.
5. The iron triangle is now balanced again and the project can be finalized.

Limitations

From the previous sections, it is apparent that the theory behind the iron triangle is useful for project managers when planning and controlling projects and to maintain a balance between the three key constraints of project management – scope, time, and cost. The project management literature tends to measure the success of a project based on these main design parameters which create the sides of the iron triangle ^[9]. However, the achievement of these traditional objectives does not necessarily mean that a project is perceived to be successful as this is only one aspect of success and must balance with other factors ^[10]. The iron triangle takes limited account (depending on the definition of the project scope) of whether the main project deliverable fulfilled the final purpose for which it was intended and whether the objectives of the stakeholders were attained ^[11].

Not a lone indicator of project success

A project can be late, over budget, and under-deliver on the project scope and still deliver a benefit to users and ultimately be considered a success ^[9]. A real-life example of this is the construction of The Sydney Opera House. This project was delivered 10 years behind schedule and the budget overruns were severe. The project was obviously considered a major failure, especially when analyzing it from the perspective of project management and the iron triangle concept. Today, the Sydney Opera House is a worldwide attraction for millions of tourists per year and considered a major success for Australia. ^[10] Ultimately, the project should perhaps be considered a success rather than a failure because of the long-term benefits it created.

On the contrary, a project can also be regarded as a project management success and satisfy all the constraints of the iron triangle but still turn out to be a failure in the end. An example of this is The Millennium Dome in London which is the largest single roofed structure in the world. The project was completed on time, within budget, and to scope. From a project management perspective, it might seem like a success, but the building did not create any real value, based on difficulties of finding suitable uses for the building.^[10]

Problematic constraint relationship

Another problem with the iron triangle model is regarding the relationships of the constraints. There seems to be a problematic relationship between the cost and time constraints when the model is analyzed. The cost constraint refers to different types of expenditures, such as people costs, as explained in previous sections. If we take the people costs as an example, it is arrived at by multiplying a cost by duration or time. This means that the cost factor essentially contains time and this can be seen as a problem. Consequently, time can be seen as part of the cost constraint rather than a separate constraint. That leaves us with a model containing only two factors instead of three. ^[12]

Related concepts

This section depicts that even though the iron triangle has served the needs of projects rather well for many years it might lack the breadth and depth needed in the complex project landscape. As a result, other more complex versions have been created with added constraints for those who feel the three constraints of the iron triangle are not sufficient.

In the book Effective Project Management by Wysocki, another version of the iron triangle is mentioned. The version is termed the scope triangle and includes six variables - time, cost, resource availability, scope, quality, and risk. The constraints clearly show that it is closely related to the iron triangle concept. The scope triangle is regarded as a tool for managing complex projects.^[5]

The PRINCE2™ method is another related concept to the iron triangle and builds on the core factors of time, cost, and scope by adding quality (as a separate factor), benefits, and risk resulting in a total of six constraints.^[13]

Annotated bibliography

• Heagney, J. (2011). Fundamentals of Project Management (4th ed.). AMACOM.

  This book gives a basic overview of the tools and techniques of project management as a whole. In relation to the iron triangle, there is a chapter regarding sources of change that are generally associated with the constraints. It provides an understanding and helps identify these likely sources of change to projects.

• Wysocki, R. K. (2019). Effective Project Management: Traditional, Agile, Extreme, Hybrid (8th ed.). Wiley.

  This book covers the field of project management and describes traditional project management projects in detail. The iron triangle is mentioned in the book along with in-depth explanations of the triple constraints. It also provides information to get a better understanding of the trade-off dynamics between the constraints. The scope triangle is mentioned in the limitations section and this book is a great reference for those who wish to learn more about the concept that is closely related to the iron triangle.

• Van Wyngaard, C. J., Pretorius, J.H.C.,Pretorius, L. Theory of the Triple Constraint – a Conceptual Review. https://www.academia.edu/8294762/Theory_of_the_Triple_Constraint_a_Conceptual_Review

  This paper explains the triple constraint theory which directly relates to the iron triangle. The constraints and the relationship between them are discussed along with noteworthy illustrations explaining the trade-off dynamics of the constraints. A number of key attributes of the triple constraint model are also discussed in addition to some notable limitations of the iron triangle.

• Bourne, L. (2007). Avoiding the successful failure. Paper presented at PMI® Global Congress 2007—Asia Pacific, Hong Kong, People's Republic of China. Newtown Square, PA: Project Management Institute.

  This paper is about some limitations of the iron triangle concept and demonstrates that delivering value (time, cost, and scope) in a project is only one aspect of success and that projects cannot be judged solely on these constraints. There are some real-life examples of projects mentioned that explain this limitation. The paper is a great read for those who want to learn more about the limitations of the iron triangle concept and what factors (other than time, scope, and cost) should be considered when deciding whether a project is a success or not.

• Siegelaub, J. M. (2007). Six (yes six!) constraints: an enhanced model for project control. Paper presented at PMI® Global Congress 2007—North America, Atlanta, GA. Newtown Square, PA: Project Management Institute.

  This paper explains the theory behind the triple constraint and questions if three constraints are sufficient. In the limitations section of the article, the method PRINCE2™ is mentioned and the content of the paper is mainly about that. PRINCE2™ has six constraints and is termed an enhanced model for project control. This paper is an interesting read for those who want to know more about this concept that is closely related to the iron triangle concept.

References

1. ↑ ^{1.0 1.1 1.2 1.3} P.M.I. (2017). A Guide to the Project Management Body of Knowledge (6th ed.). Project Management Institute.
2. ↑ ^{2.0 2.1 2.2 2.3} Heagney, J. (2011). Fundamentals of Project Management (4th ed.). AMACOM.
3. ↑ The Standard for Program Management (Fourth edition). (2017). Project Management Institute.
4. ↑ ^{4.0 4.1 4.2 4.3} Everitt, J. (2020, May 25). Understanding The Project Management Triangle. Wrike. https://www.wrike.com/blog/understanding-project-management-triangle/
5. ↑ ^{5.0 5.1 5.2 5.3 5.4} Wysocki, R. K. (2019). Effective Project Management: Traditional, Agile, Extreme, Hybrid (8th ed.). Wiley.
6. ↑ ^{6.0 6.1} The Project Triangle. (n.d.-b). Microsoft. Retrieved February 23, 2021, from https://support.microsoft.com/lv-lv/office/the-project-triangle-8c892e06-d761-4d40-8e1f-17b33fdcf810
7. ↑ ^{7.0 7.1} Van Wyngaard, C. J., Pretorius, J.H.C.,Pretorius, L. Theory of the Triple Constraint – a Conceptual Review. Retrieved February 16, 2021, from https://www.academia.edu/8294762/Theory_of_the_Triple_Constraint_a_Conceptual_Review.
8. ↑ Haworth, S. (2021, January 15). Start Your Projects Right: A Complete Guide To Project Initiation. The Digital Project Manager. https://thedigitalprojectmanager.com/project-initiation-guide-how-start-projects/
9. ↑ ^{9.0 9.1} Bannerman, P. L. (2008). Defining project success: a multilevel framework. Paper presented at PMI® Research Conference: Defining the Future of Project Management, Warsaw, Poland. Newtown Square, PA: Project Management Institute.
10. ↑ ^{10.0 10.1 10.2} Bourne, L. (2007). Avoiding the successful failure. Paper presented at PMI® Global Congress 2007—Asia Pacific, Hong Kong, People's Republic of China. Newtown Square, PA: Project Management Institute.
11. ↑ Caccamese, A. & Bragantini, D. (2012). Beyond the iron triangle: year zero. Paper presented at PMI® Global Congress 2012—EMEA, Marsailles, France. Newtown Square, PA: Project Management Institute.
12. ↑ Baratta, A. (2006). The triple constraint: a triple illusion. Paper presented at PMI® Global Congress 2006—North America, Seattle, WA. Newtown Square, PA: Project Management Institute.
13. ↑ Siegelaub, J. M. (2007). Six (yes six!) constraints: an enhanced model for project control. Paper presented at PMI® Global Congress 2007—North America, Atlanta, GA. Newtown Square, PA: Project Management Institute.