Attaining the Iron Triangle for Project Success
According to the Project Management Institute, project managers typically are considered successful if they can make necessary and reasonable tradeoffs amid the “iron triangle” of constraints—time, cost and quality—and still deliver on a project.
In the triangle shown, project scope is the area of the triangle, and constraints are the vertices. The iron triangle theory states that if one of the vertices is pulled in either direction, at least one of the other two vertices needs to change for the area (scope) to stay the same.
This could function in several ways. For example, if you seek to:
- Save money, time and/or quality will suffer;
- Save time, cost and/or quality will suffer; or
- Ensure top quality, cost and/or time will suffer.
The iron triangle offers a simple explanation for a relatively straightforward project management concept. However, in the construction world, the iron triangle theory changes and serves as more of an excuse than a rule. That’s because, for construction project managers, it implies a choice must be made; the belief is that only two of the three vertices can be successfully achieved at once on a given project. Instead of stating that when one constraint changes the others need to react, the view in construction is that you can keep ahold of only two of them and the third will be negatively affected. Thus, you have to pick your priorities.
In a world where scope, budget, schedule and level of quality are all agreed to in a contract at the beginning of a job, it’s unfortunate that project managers and superintendents continue to argue that achieving only two of the three vertices at one time is possible. This belief essentially defeats the purpose of a guaranteed maximum price contract and proves it really should be called a guaranteed minimum price contract.
The reality is that the construction industry view of the iron triangle is an excuse for the chronic failure to meet deadlines and budgets. Delays and overruns are common, and no one seems to know what to do about it. Contract language has been adjusted, insurance products have been created and an entire dispute-resolution industry has been built—yet the problem remains. Similarly, project managers and superintendents alike have tried diligently for a long time to effect change, to no avail. But even though systemic failure exists here, it’s not because of an impossibility.
Of the iron triangle’s three components, cost and quality are relatively easy to control. On the other hand, scheduling oversight and analysis fall into a black hole, which is where the problem manifests. For example, most construction projects have a fixed cost due to the bidding nature of construction contracts—and subcontractors have fixed-priced contracts, too—so there’s no real risk on the cost management front. (An exception is delay-related costs, most of which are best managed through schedule-based project controls.) Quality is overseen by on-site superintendents whose number-one job is to make sure quality is present. And the reality is that quality is usually impacted only when a project is delayed.
In short, the iron triangle is attainable, and the key lies in the schedule.
In today’s construction landscape, scheduling is a key element as well as a gray area that needs vast improvement for construction to be more predictable. The schedule is also a key driver of cost and, when mismanaged, will usually cause significant impacts to quality. Furthermore, financial damages from schedule mismanagement usually far surpass damages caused by other items. Such damages include lost revenue, additional costs related to construction, and legal and consulting fees associated with claims.
Communication of schedule data, or lack thereof, is a key element of success in terms of schedule management. Visibility into a project’s progress and performance, using schedule data, improves communication among contractors and owners, as well as banks, insurers and other stakeholders. Technology now provides an enhanced and unbiased understanding of project schedules, making it feasible to communicate in a timely and effective manner and get ahead of potential challenges.
A high-quality project, completed on time and on budget, is possible to achieve consistently if the schedule is under control and properly managed. Regardless of the constraints the iron triangle traditionally has had on the construction industry, it need not be used any longer to justify mismanaged projects.