Benchmark Six Sigma Expert View by Venugopal R
A Project Manager is often faced with the challenge of balancing a project amongst multiple constraints, the most popular ones being Scope, Timelines, Cost. Many a time, the competitiveness of a project depends upon one or more of these factors. One of the key responsibilities in Project Management is to coordinate with Project team and the connected stakeholders to successfully manage the variabilities of these elements and their interrelated effects.
The 3 elements of this ‘trinity’ are represented using a triangle as below:
While bidding for a project, the marketing team would want to commit these factors a positively as possible in order to win the project. Once the bid is won, the responsibility of delivering the project within the committed boundaries falls upon the project manager and his/her team.
Any compromise on one of the elements has a risk of adversely impacting the Quality of the product / service, unless it is appropriately balanced by the other elements.
When Timeline is critical
Consider a situation where you are an OE producer of taillamps for an automobile company. The company will have a deadline to launch a new car model for which the initial output of the product has to be made ready. In this case the timeline is very critical. The teams in Design and Production Engineering will have to come out with the product as per the expected design before the deadline. In case they face constraints in achieving the same, they would try to add more resources or resort to very costly production process, since the regular tools may not get ready within given time. This could increase the cost of the project. Another option that they would have is to compromise on the scope (for eg: avoid certain complexities in the design, limit the project only for fewer models, shorten the test cycle etc.). It may be noted that increasing resources will not reduce the timeline for all situations, and beyond a certain limit.
Agile methodology which is popular in software development projects, is one approach where the project scope and timelines are managed in collaboration with the client, by iterative development.
When Scope is Critical
Consider a project which is taken up as a safety related improvement for a product. The scope of the project has been clearly defined, design verified and agreed upon. The scope may include modifications to multiple components, completion of mandatory evaluations, delivering to various locations and so on. In such a situation there is no question of compromising the scope. If there is a challenge in adhering to the agreed scope, the project manager may see if the same can be achieved by additional costs or by availing more time. Additional costs might be needed for additional modifications of tooling, resources for performing reworks or additional testing. Extended time and the costs may sometimes be related to the same reasons, viz. time to perform the tool modifications, time to carry out additional tests etc.
Sometimes, it is possible to have a ‘Scope creep’ which means that the original scope, (or originally understood scope) could expand during the course of the project. This is more common for Service Industries, for instance IT Services, where certain services are outsourced or taken up with as a ‘partnership’, and not based on strict contractual agreements. Usually when such scope expansions occur based on mutual agreement with client, a timeline extension and / or price negotiation might be done. For certain services, penalties are charges for falling short of Quality requirements as per SLA. However, for planned scope expansions, grace period for relaxed Quality may also be sought from client.
When cost is critical
The cost budget for a project is determined based on initial information available. Invariably, the costs are dependent upon the price agreed / expected from customers. The fixing of cost might have been done based on certain assumptions. For example, an assumption that developing automation to take over 60% of the manual effort within a certain period of time, would have had a significant influence on the cost budgeting for a project. However, in reality, once the project progresses, we may realize that only 40% automation is possible within the given timelines, then the resource cost has to be increased for the additional manual effort. In this case, it may not be possible to adjust the other elements viz. Scope and timelines to overcome the cost constraint, especially on contractually agreed projects.
An example where the scope of the project might be altered due to unprecedented cost pressure could be in real estate. A builder may downsize the scope for a residential project by cutting down on discretionary common facilities. Similarly, if we consider airlines services as a project, cost pressures tend to alter the scope of certain ‘frills’ or make them available only on extra payment.
For all situations, it may not be practically possible to adjust the other two elements to accommodate the variation in one element.
Quality
In the context of the subject being discussed, we see that people sometimes confuse between the two terms “Scope” and “Quality”. It is important to understand the differences and also operate accordingly. While the project manager may work on balancing the three elements, viz. Time, Scope and Cost, great care has to be taken to ensure that the ‘Quality’ of a product or service is not adversely impacted. Even if a product / service is offered at a reduced scope, any deficiencies of the product / service within the agreed scope will amount to drop in Quality, which has to be monitored and kept in control.