Triple Constraint Triangle: enhancing project performance

An increase in project delays and undesired project scope growth are the most bothersome aspects of project execution for a project manager. These events are accompanied by poor project performance and ultimately the shutdown of a project. Regardless, companies are often uninformed on the philosophy behind project cost management.

The Triple Constraint Triangle provides more insight on the importance of this topic.

Triple Constraint Triangle – Cost, Schedule, and Scope

The success of a project is often measured through Key Performance Indicators (KPI). KPIs with which everyone is familiar are the Cost Performance Index (CPI) and the Schedule Performance Index (SPI). These KPIs are closely related via the Triple Constraint triangle and are, therefore, generally used together to indicate the overall project’s success.

What is the triple constraint triangle in project management?

The Triple Constraint Triangle, also known as the Iron Triangle, Project Management Triangle, and Project Triangle is a fundamental concept in project management that illustrates the relationship between three primary constraints that influence the success and delivery of any project: scope, time, and cost. These constraints, collectively referred to as the triple constraint of project management, are interconnected, meaning that a change in one constraint will inevitably affect the other two.

1. Scope constraint: the work or tasks required to complete the project successfully.
2. Time/ Schedule constraint: Time encompasses the project’s schedule, including all phases from initiation to project completion. This involves setting deadlines, milestones, and overall timelines for project deliverables.
3. Cost constraint: Cost involves the budget allocated for the project. This includes all financial resources needed for completing the project, such as labor, materials, equipment, and other expenses.

The interplay between project constraints

The Triple Constraint Triangle captures the dynamic interplay among scope, time, and cost, where adjustments in one area inevitably impact the others. Understanding these interactions is pivotal for effective project management:

• Time and Scope: Adjusting project scope can directly influence the project timeline. For instance, reducing the scope may streamline project tasks and shorten the timeline to meet deadlines. Conversely, extending the project schedule can accommodate additional scope changes or unexpected project requirements, aligning with stakeholder needs for comprehensive project activities.
• Cost and Scope: Modifying the project scope affects resource allocation and budget utilization. A reduced scope typically requires fewer resources and can lower costs accordingly. Conversely, expanding the project scope demands more resources and increases overall project costs to fulfill additional requirements and deliverables.
• Cost and Time: There exists a direct correlation between project duration and associated costs. For example, prolonged project schedules or delays may escalate costs due to extended labor, equipment rentals, overhead expenses, or penalties. Conversely, accelerating project timelines to meet deadlines can incur higher costs from expedited resources or overtime wages.

Why is the Triple Constraint important for project success?

The Triple Constraint Triangle is essential in project management as it highlights the interdependency of a project’s key elements: cost, schedule, and scope.

As a project manager, your role involves balancing these three project constraints by making trade-offs to keep the project on track. Each constraint influences the other two, requiring careful prioritization and adjustment.

Recognizing competing demands

Every project comes with competing demands. Identifying which constraint—cost, time, or scope—is the highest priority is crucial. This prioritization helps in making necessary adjustments to the other constraints to maintain project balance and ensure successful completion.

For example, if a tight deadline is the top priority, you might need to adjust the scope and increase the budget to allocate more resources. Alternatively, if staying within budget is the main concern, extending the timeline or reducing the project scope may be necessary.

Aligning stakeholder expectations

Stakeholders often have differing views on what is most important. The Triple Constraint Triangle provides an understanding of the project trade-offs, which facilitates better communication and decision-making. Thus, it ensures that all stakeholders are aligned and can adapt to changes effectively.

The Triple Constraint Triangle in practice

While in many companies the individual aspects of the Triple Constraint Triangle are managed via software tools like Primavera, Microsoft Project or even Excel, their correlation is often overlooked. The reason here is that it is already difficult to get a good grip on individual aspects, let alone their relation.

Correct philosophy with the correct cost control tool

A dedicated project cost control software should combine disciplines such as cost estimating, cost control and scheduling into one while allowing the user to keep using the software they are familiar with. Such instrument lends itself as an excellent project controls tool and helps greatly with project performance optimization by connecting the different disciplines in project controls.

Cost management integration: Project performance is strongly dependent on the adoption of the correct cost control philosophy.

To ensure high project performance and associated high KPIs, one must become familiar with the fundamentals of cost control. A prominent one is a well-defined Work Breakdown Structure, a hierarchical structure in which the scope of work is decomposed. This allows for better resource allocation to activities, as well as more accurate KPIs through Earned Value Management (EVM).

Earned Value Management not only allows you to look back on project performance but also look ahead and adjust project execution in such a manner that further escalations are prevented, and potential opportunities are taken advantage of.

Conclusion

All in all, the way to go when controlling projects is to not only look back on project performance but also to look forward. This is only possible through adopting the correct cost control philosophy, for which the correlation between all cost control aspects must be well understood. A dedicated software which combines different aspects of project controls is particularly suitable for helping its users in doing so.

Interested? In the following blog, we dig more into the Work Breakdown Structures for assigning the work-packages / deliverables to understand how it helps in applying the correct cost control philosophy.