Iron Triangle of Project Management

Revision as of 16:15, 21 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 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. ^[4]

The constraints

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

A specific time frame or deadline within which the project must be completed. This includes milestones and deadlines for each project phase.^[4]

Cost

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.^[4]

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] The theory of the iron triangle is illustrated in Figure 1. Quality is placed in the center of the iron triangle to show that the quality of a project depends on the project's scope, cost, and time spent on the project ^[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 iron triangle concept is an essential element of a project manager’s toolbox as it creates a better understanding of the boundaries of a project and consequently simplifies the decision-making process.

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. (https://www.projectmanager.com/project-management) 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. (Effective Pro Management) 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.

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. (Aðal PM bókin) 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. (linkurinn)

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. (EFFECTIVE PM) 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 (heimild: aðal pm bókin). 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.

Controlling change in the iron triangle

Most projects are exposed to changes during their life cycle. 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. 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.” (fundamentals of project ma)

Limitations

Annotated bibliography

[?] https://strategyzer.com TEXT

[?] BOOK TITLE TEXT

References

1. ↑ ^{1.0 1.1 1.2} P.M.I. (2017). A Guide to the Project Management Body of Knowledge (6th ed.). Project Management Institute.
2. ↑ 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. ↑ Wysocki, R. K. (2019). Effective Project Management: Traditional, Agile, Extreme, Hybrid (8th ed.). Wiley.
6. ↑ Aston, B. (2019, April 23). A Project Management Triple Constraint Example & Guide. dpm. https://thedigitalprojectmanager.com/triple-constraint/
7. ↑ 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.