Iron Triangle of Project Management

Revision as of 21:44, 22 February 2021

Abstract

The roles of a project manager are numerous and one important role in 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 is therefore essential. 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, and the main limitations of the theory.

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. The concept of the iron triangle is illustrated 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.^[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.^[6] As seen from Figure 1, quality is placed in the center of the iron triangle and is not considered one of its constraints. The quality of a project depends on the project'scope, cost, and time spent on the project. In order to achieve project success and deliver a quality project, the three constraints must be balanced. ^[7].

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.^[8]

Application

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 prevent that from happening. The following sections will provide a better explanation for why the theory is important in practice.

Managing the constraints

Applying the theory in practice revolves around keeping track of and managing the time, scope, and cost constraints by using the relevant tools and techniques^[9]. Therefore, it is important that project managers carefully manage each constraint in order to deliver a quality project. The project managers must consider both the planning component and control component regarding each constraint.

Project time management

Managing the schedule of a project includes both a planning component and a control component. The planning component requires the project manager to develop a schedule that can be met by providing time estimates for the duration of tasks and the amount of labor time needed to complete the tasks. The control component requires the project manager to compare time estimations to actual times in addition to the overall management of the project schedule.^[6] The time required to complete a project must be estimated as accurately as possible. This task must be done during the planning phases of the project life cycle to create a schedule that covers the duration of all necessary activities. Some useful project management tools to achieve this are PERT charts and the critical path method.^[9]

Project scope management

This includes the necessary processes to make sure that the project includes all the work required for it to be successful. Managing the scope of the project is mainly about defining and controlling what is included in the project. ^[1] It is important for project managers to define the scope early or during the planning stage of a project. The scope can expand when project is executed if it is not well defined from the start and might cause the project to fail. This circumstance is known as scope creep in project management and a relevant method to reduce the risk of scope creep is creating a work breakdown structure. ^[9]

Project cost management

Managing the cost of projects also includes a planning component and a control component. The planning component requires the project manager to set up the project budget and mapping those costs into the project schedule. The project manager should also control the consumption of the budget over the project life cycle.^[6] The responsibilities of the project manager regarding this constraint include the activities involved in planning, budgeting, financing, funding, and controlling costs so that the project can be completed within the agreed budget ^[1]. The budget for a project is established early in the project life cycle. Historic data from similar projects is often used and can be beneficial to provide a comparison to base the budget on.^[9]

Controlling change in the iron triangle

Most projects are exposed to changes during their life cycle and it is unrealistic to expect the specifications of a project to remain fixed. Project can and will change, thereby presenting challenges to 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 control the project. The project manager should make necessary adjustments to keep the iron triangle balanced and 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][6]

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 ^[10]. 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 ^[11]. 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 ^[12].

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 ^[10]. 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 ^[11]. Ultimately, the project should perhaps be considered a success rather than a failure because of the long-term benefits.

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 was labeled a “white elephant” by the press, based on difficulties of finding suitable uses for the building.^[11]

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. ^[13].

These examples depict that the concept regarding the iron triangle is to be used.........

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, from planning to execution. The iron triangle is mentioned in the book along with in-depth explanations of the triple constraints of the iron triangle. It also provides information to get a better understanding of the trade-off dynamics between the constraints.

• 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.

References

1. ↑ ^{1.0 1.1 1.2 1.3 1.4} P.M.I. (2017). A Guide to the Project Management Body of Knowledge (6th ed.). Project Management Institute.
2. ↑ ^{2.0 2.1} 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. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named EffectivePM
6. ↑ ^{6.0 6.1 6.2 6.3} Wysocki, R. K. (2019). Effective Project Management: Traditional, Agile, Extreme, Hybrid (8th ed.). Wiley.
7. ↑ Aston, B. (2019, April 23). A Project Management Triple Constraint Example & Guide. dpm. https://thedigitalprojectmanager.com/triple-constraint/
8. ↑ 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.
9. ↑ ^{9.0 9.1 9.2 9.3} What is Project Management?. Project Manager. Retrieved February 20, 2021, from https://www.projectmanager.com/project-management
10. ↑ ^{10.0 10.1} 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.
11. ↑ ^{11.0 11.1 11.2} 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.
12. ↑ 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.
13. ↑ 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.