By Dr. Willis H. Thomas, PMP, CPT
In project management, keeping a balanced view of the competing demands (cost, time, scope, quality, risk and resources), requires evaluation to be at the center of the model. Evaluation involves a determination of merit (quality), worth (value) and significance (importance). Placing evaluation at the center helps the project team maintain focus on the potential impacts to the competing demands (AKA competing constraints):
- Cost = budget, including contingency reserves and management reserves
- Time = schedule, including Key Performance Indicators (KPIs) and milestones
- Scope = what is to be included and excluded
- Quality = specific requirements to meet project objectives and key stakeholder expectations
- Risk = Uncertainties that can be positive or negative
- Resources = People, systems, facilities, equipment, materials and supplies
Inherent in the competing demands is give and take. For example, by increasing:
- SCOPE, it is anticipated that it will inflate the COST
- QUALITY, it is assumed that it will lengthen the amount of required TIME
- RESOURCES, it is expected that the RISK will be reduced
Give and take enables a Domino Effect or chain reaction. This concept was initially popularized by President Dwight D. Eisenhower in 1950. The domino effect is the cumulative effect produced when one issue effects one (or more) other issues. For example, a change in the law (i.e., tax rate) in one city will likely influence changes in nearby cities. In this instance, one competing demand (i.e., taxation) will probably impact other competing constraints (i.e., consumer buying behavior).
The domino effect sometimes concerns Opportunity Cost, the loss of potential gain from other alternatives when one option is chosen. For example, if a decision has been made to invest in land development using available neighborhood land to support additional parking of cars due to limited street parking, then this land cannot be used for another good idea such as a park or recreational space for families and their pets.
Here opportunity cost considers the convenience of parking cars in a centralized area and freeing up space on the streets, which has tangible and intangible benefits, such as increasing neighborhood safety, reducing air pollution, decreasing traffic congestion, etc. This option of centralized parking space is compared to the neighborhood park social benefits, which may include allowing children to have a place to play together, exercising on the walking path, promoting unity within the neighborhood, etc. To arrive at which is the right decision (e.g. parking space vs. neighborhood park), a study may be performed to determine the short and long-range benefits of each option, using different evaluation approaches, such as transportation traffic analysis.
Keeping evaluation at the center while considering the ongoing nature of the Monitoring and Controlling Process Group keeps evaluation at the forefront. Mapping the competing demands to basic principles of evaluation will provide the following insight summarized in this table below.
Respectively C/T/S/Q/U/R, when looked at in terms of variance from the baseline, represents overall project performance.
About the Author
Willis H. Thomas, Ph.D., PMP, CPT has worked for large corporations and academic institutions in the areas of human resources, learning and development, quality assurance, project management, sales and marketing, measurement and evaluation, and operations.
He has been in senior management for life sciences companies for the past 15 years. Dr. Thomas is a member of adjunct faculty at the Lake Forest Graduate School of Management, International Institute for Learning and Institute of Validation Technology.
His publications have received global recognition from associations such as the Project Management Institute (PMI) where he received the Cleland Award for “The Basics of Project Evaluation and Lessons Learned.” This book was an 8-year effort that enhanced the framework for the evaluation of projects using the PMBOK® Guide.
He has been a featured speaker on an international basis and has received the Apex Publication Excellence Award for implementing useful tools for project management, evaluation, and training.