The Iron Triangle

In Project Management circles, the Iron Triangle is seen as both a driving and as a restraining force in management the successful completion of project on time and within budget with the anticipated and expected level of quality that was promised.

However, as anyone knows who has worked on a project, this is a balancing act at best and at worst, it can easily become a nightmare.

So, what is it that I am talking about here?

I am talking about what is referred to as The Iron Triangle. The Iron Triangle refers to the variables of Time, Cost, and Quality in equal measures hence the triangle. But, some project mangers put Time, Cost, and Scope at the points of the triangle with Quality hovering in the center.

Let's take a look at each one of these to get a better understanding of what I am trying to get across.

Ok... so, we have this project that let's say can only last 3 months. We then refer to this 3 month period as our Time variable. During those 3 months, we have weeks, days, and hours with which to play and can assume that daily time is 8 hours for 5 days each week, and weekly time is 40 hours and that we have 4 weeks each moth so we are working with an overall amount of time of:

• 12 weeks
• 60 days
• 480 hours

If we then look at our Cost variable, we can derive our total cost from our Scope Statement which calculate the overall costs and the detailed costs along each step of the way. These costs would have included:

• salaries & benefits
• labor wages & benefits
• equipment leased
• maintenance
• raw materials
• transportation (gasoline)
• utilities
• phone
• office supplies

Each one of these budget items is inflated about 10-20% to cover “just in case” expenses not anticipated. The project, if performed by an outside contractor will have a profit margin built into the costs as well of 10% or more, all of which is typically agreed upon before the project even begins.

The quality variable while seemingly obvious can be very detailed in its requirement and specifications if dealing with a project of creating new computer software or a new competitive product that must perform a certain way under certain situations and conditions.

If the output of the project is a restaurant meal for a customer, then if poses different types of quality restraints than if the output of the project was an automotive vehicle or a military weapon or even a bridge connection 2 land masses with a quarter mile of water in between them.

However, if the output of the project is a backyard deck or a utility building then obviously the quality requirements are going to be or could be a little more relaxed

As I mentioned earlier, some project managers put Scope at one of the corners instead of Quality. Project Scope can be defined as how the project is going to get from point A to point B in a certain amount of time (in this case 12 weeks).

Now... let's play around with our Iron Triangle.

Suppose half way through the project, the owner of the project comes up to you and indicates that there needs to be 2 more stops between point A and point B.

What would you do?

Simple... everything immediately gets renegotiated... and, a clause to this effect has been included in the original project contract.

If 2 more stops are being added, then that could impact our Time variable, our Cost variable, as well as our Quality variable.

Is the project owner willing to pay more money or accept more time or a reduction in quality? If the answer is no to all of these, the project continues as planned... but, if the project owner is willing to accept some slight changes, then a new scope arrangement has to be made.

This may not seem like a big problem but if the equipment is leased, the project may not be able to hold on to it past the deadline for its return. The labor might be promised for some other project that must start on time as well; and, if that is the case then overtime will be required. And, the project may have completed so many crucial milestones (measures of completion) that its course can no longer be altered.

A change in each one of these variables will cause increases or decreases in the other two and it is up to the project manager or leader to be able to see and identify all theses complications or be able to absorb the costs if he doesn't.

A project manager's reputation can be made or broken by The Iron Triangle.