In the last article, Introduction to Project Management, we provided an introduction to project management covering the difference between a project and a task; defining the project in alignment with your goals; and a method of determining all the activities to bring the project to completion. Now let’s look at the properties of a project, referred to in PM language as the PM Triangle—the constraints of the project..
The three properties of a project are time, cost and scope—elements that are interrelated. In most cases, one of these elements will be fixed while the other two will be variable. (Note: You may encounter another representation of the triangle: time, cost and quality; or time, cost and quality/scope. Read on for clarity.)
The triangle supports a main premise of PM: If you change any leg of the triangle, you change the project outcome. For instance, your costs (budget) could change if you shorten (or lengthen) the timing of the project or if you have to payout more for help on completing tasks. If you decide to expand the project, for instance by adding a chat feature on your website to handle queries on your new product, then you are adding costs.
Can there be two fixed elements to the triangle? Yes. If your budget is not negotiable (fixed) and you had to adhere to the original completion date (fixed), then you may be left with a end result of lesser quality or one that now does not incorporate a non-essential requirement…a bell or whistle such as interactive graphics.
This occurs when the scope of the project changes.. If you allow the requirements of the original project to expand, you have introduced scope creep which is the main reason that projects get derailed (taking longer than originally thought or costing more than might be budgeted for). This usually occurs because at the outset, you did not get the requirements (or specifications) of the project nailed down. Did you omit the critical step of deciding who all the stakeholders are in the project; or soliciting feedback from a panel of end-users? Did you miss a necessary activity when you compiled your list at the outset? Did you short change the project by hiring the lowest bidder?
When you change the fixed element of your project, you impact the variable elements. The best way to avoid any potential setbacks in your project is to decide the priority of the three elements. Is getting the project completed by a certain date most important? This may cause additional costs to meet a tight deadline. If your priority is keeping to your exact budget and you are experiencing even a low level of scope creep, then you may have to settle for a product of lesser quality. Determine and document the specification (requirement) that must be eliminated.
On time, on spec, on budget: You have probably run across this phrase before—clearly it has its origin in project management. Whether you are using PM to execute your own projects or those of your vendor or the client you are serving, your aim is to be able to say: I delivered on schedule, met all the agreed upon requirements and adhered to the budget.
Project Risk Management: A Very Basic Overview
Incorporating risk management into your project at the outset can minimize its failure. What are the things that could put the successful completion of the project at risk? From the people (do they have the skills needed) to the vendors (have you had any issues with them in the past) to the calculation of costs (have you correctly costed out each activity) to the schedule (have you accounted for all possible down like holidays, vacations, a competing project due date?).
Once you have identified all the risks, prioritize them and decide, beforehand, how you will deal with
should they arise. You can see how creating a risk response document is an important step in the PM process. While risk management is a discipline in itself and widely used across industries, we can certainly apply a basic rule: Determine how you will deal with each risk to the project you have identified choosing among these three options that have been adopted by risk management professionals:
Avoid the risk: This might mean eliminating a certain spec of the project from the outset in order to
head off project failure. In our ‘chat room’ example: Turns out that no one on the team has any experience in this technology. Without this expertise in this technology, challenges on execution will occur – perhaps an add on in the future-when resources are available for training/hiring for expertise.
Minimize the risk: This is the response you will have most often. Hire a more experienced team member, pad your time schedule or add more team members. Many professionals in project management will simply add a 10 – 15% additional budget line item to provide a cushion for unforeseen cost overruns.
Accept the risk: If you have prioritized all the risks correctly, it follows that the least risky ‘item’ in your lists can simply be accepted with little or no compromise to bringing the project in ‘on time, on spec and on budget.’
Any questions so far? Please don’t hesitate to ask.
Next issue: Basic Project Management: A Small Business Example.