Measuring Project Success Beyond The Iron Triangle
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Abstract
The practice of assessing projects performance and outcome has traditionally relied on defining success criteria in terms of the Iron Triangle (also known as the Triple Constraints). Indeed, The International Project Management Association (IPMA) defines a project’s success as “the ability to deliver the project’s product in scope, time, cost and quality.” ( IPMA Organisational Competence Baseline®). Accordingly, the conventional job of project managers has been to ensure a balance between the competing visible elements of the iron triangle. This article argues that this concern should include further considerations when assessing the success of projects, notably on large organizational level as well as the public sector. where complex megaprojects need to be subjected to a wider range of criteria for planning and evaluation in order to optimize the value delivered by these projects. Although the difficulties involved in assessing project success on this level have traditionally led project mangers to use simple models such as the iron triangle to measure success, additional criteria have been suggested to have a greater significance as measurement tools. Theses criteria include stake-holders’ satisfaction, technical performance and innovativeness, and organizational benefits and growth. The article focuses mainly on the impact on customers and benefits to the performing organization as external measurement for assessing project success.
Background
The Iron triangle model has been in use for over sex decades as a tool for project managers to plan projects as well as to evaluate their performance. It consists typically of three dynamically interrelated components; cost, time and scope. A project has subsequently been considered successful upon finalization if it is delivered in time, on budget and according to specifications (Atkinson). However, since projects are about creating value through change, interactions between projects and various components of their surrounding environment is inevitable, an environment that has through the past decades undergone drastic developments to become profoundly complex as well as highly uncertain. As a result, the content of a project as well as the nature of its intended purpose has become of a much higher significance as modern projects serve mainly as an integral part of project programs and project portfolios. Elements of the Iron Triangle provide metrics for evaluating and controlling project performance from a management point of view, while However, they fall short when it comes to shaping the purpose or the content of the project, which raises questions around the validity of this model as a thorough tool to evaluate project success. Case in point, the Big Dig project in Boston, Massachusetts. The project ran way over budget to be considered as the costliest urban road project in the history of US public works, yet the project is considered an overall success (Harry T. Dimitriou).
Measuring Project Success
The multi-attribute nature of projects compels managers to use several measures of success. These measures could be internal such as meeting budget, time schedule and technical performance or external such as customer satisfaction and needs (Aaron J. Shenhar O. L., 1997). However, The relative importance of theses measures changes throughout the life cycle of a project. Early at the beginning of the project internal factors are of higher importance to determine wither it makes sense or not to initiate the project while the role of external measures could make more sense in a program or portfolio management sense to determine wither the right project is being carried out. However, as the project progresses towards advanced stages and specifically after it ends, overruns in budget and time cease to be as important, while external measures of customer satisfaction, and its relation to the project organization, continue to be important (Harry T. Dimitriou). In conclusion, evaluating the success of a project should most importantly include two external measures which reflects its external effectiveness: Impact on proposed customers and impact on the developing organization with customers’ benefit being the most important of all.
Meeting Budget, Time and Scope
One of the most traditional methods to assess the success of a project has been to use an operational mindset to assess the efficiency of a given projects in terms of managing the constrains on resources. Most project managers regard their work as a success when they finish on time, within budget and to the determined scope. Success in this approach yields well-managed efficient projects but to use this as the solo criteria to assess success could lead to misleading results (Aaron J. Shenhar D. D., 2001). Global competition in an ever-changing highly uncertain market requires organizations to focus their resources on activities decisions aimed at improving business results, organizational performance and growth as well as improving market position in the long run. This requires more than a simple operational mindset, as projects on this level are required to be rather effective at driveling the overall strategy than simply efficient in running resources. Therefore, taking into concern customer needs, competitive advantage, and future market success could outrank budget overruns, delays and even modifications to the original scope. Case in point, the Windows software project, although the project into multiple delays and budget overruns, upon completion the software became Microsoft’s major source of revenues as it operates the systems of almost 90% of all PCs worldwide (Aaron J. Shenhar D. D., 2001).
Measuring Impact on the customers
The iron triangle model relies on internal metrics to assess the success of a project. However, it has been established that further measures such as impact on the customers and benefits to the organization, which reflects external effectiveness should also be taken into consideration when defining project success. When assessing the impact on customers, it is notable to distinguish between project success and products success. A project might be considered unsuccessful in terms of traditional thinking such as in the aforementioned case of Microsoft Windows, still results in a product that is considered successful (Windows operating systems). However, in order to consider a product successful, it must address the needs and requirements of the customer. Hence, the importance of meeting the product’s performance measures, functional requirements and technical specifications in order to come up with a product which satisfies the customers to an extent where they would benefit from using it and maybe come back for future generations of the same product or other products produced by different projects performed by the same organization (Aaron J. Shenhar D. D., 2001). The significance of project impact on customers has been on the rise worldwide. Case in point, The Affordable Care Act established in the United States which is anticipated to have a huge impact on projects performed by the pharma industry. The act indicates that all hospitals as well as health care professionals serving Medicare patients with the most common conditions will be paid for the quality of the care, rather than the quantity of services, they supply. This shift from unit towards value-based purchasing means that it is what how customers value matters the most and hence should be considered above all when measuring the success of pharma projects (From vision to decision Pharma 2020 , 2012). This is just an example of how products success is considered a significant criterion when measuring the overall success of projects, as a product which adds a new value that meets the needs of the customers would probably have the highest impact when it comes to customer satisfaction.
Benefits to the organization
Projects are the drivers of organizational change in an environment that has already been established to be ever-changing, competitive and highly uncertain. The ability to successfully perform the right projects in a sustainable cycle is the life line for organizations to cope with the competitive business environment. On organizational level, projects are integrated into project programs and project portfolios. Therefore, in addition to efficiently generating value on the short term, the efforts of a project should follow the long-term goals of the organization and successful project management should be responsible, sustainable and strategic (Responsible Project Management Byond The Triple Constraints; Aaron J. Shenhar D. D., 2001), It should as well complement practices of benefits identification, planning, delivering and tracking of projects to ensure that the right project is done right in a sustainable cycle delivering the maximum value-revenue for each value of the invested capital. This is most visible in the argument for sustainable energy projects, where long term benefits outweigh the higher project cost when compared to alternatives. Measures of the triple constraints become less important in the long run beyond project completion and products who have failed to enter the market could still generate benefits for the organization on the long run. Case in point, the Lisa project. Apple Computers faced a major business disappointment developing the Lisa computer. However, parts of this project such as technologies developed as well as gained experiences played a major role developing the Macintosh computer whish was a major success (Aaron J. Shenhar D. D., 2001).
Conclusion
Defining and measuring project success could be complex beyond the traditional notion of the iron triangle constraints. An alternative multi-dimensional approach which include external measures of customer satisfaction and organizational benefits is suggested to measure project success. However, the importance of these project success dimensions varies with the level of uncertainty and different timeframes in a strategic mindset. Uncertainty presents projects with risks and opportunities, therefore as the level of uncertainty increases, importance of meeting time and budget constraints is reduced and the impact the project has on the customers and the organizational benefit is increased. The relative importance of these measures is also time dependent. During project execution and in the short-term, project efficiency is the most important measure of project success and offers a good tool for project monitoring and control. However, upon project completion and as the product reaches the customer, project efficiency becomes less important in comparison to what impact the project and/or its products would have on the customers. Eventually, on the long run, the outcome benefits the project generates for the organization, becomes the most important measure of project success.
References
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