A Balanced View of the Competing Demands through the Lens of Evaluation

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.

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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.


What’s the Difference Between a Risk Audit and a Risk Review?

By J. LeRoy Ward, PMP, PgMP, PfMP, CSM, GWCPM, SCPM   |   Executive Vice President – Enterprise Solutions, IIL

Don’t answer that. I already know. Not a darn thing, or at least there shouldn’t be.

In my experience, both have been used, are currently being used, and will probably always be used to mean the same thing by the many companies I’ve worked with in my forty plus years in project management. Some companies use “review” rather than “audit” because the latter scares folks.

Who really wants to be audited? No one of sound mind that I know, and I should know.

I worked for the Federal Government for almost seventeen years on some very controversial programs in Indian Country which were constantly being subjected to audits. These programs were audited by the Government Accountability Office or GAO (formerly named the Government Accounting Office), the Inspector General of the Department of the Interior, Congressional audit staff (then-current investigators from the FBI on-loan to Congress), and a host of other “interested parties.”

Their job was to ferret out “waste, fraud, and abuse” and they did their best to find all three. In all programs on which I was working, they just found “waste,” meaning we didn’t do things as perfectly as they thought they should have been done. While you could argue (in writing), it didn’t do much good. They always had the final opportunity to write their rebuttals. After all, they published the reports.

Audits in the corporate world may not be as scary, but no one likes them there either. Why put people on the defensive when all they’re trying to do is a good job under difficult circumstances? That’s why I noticed early on in corporate life, that the word review was much more popular than audit, and not just here in the United States where I live and work.

Review wasn’t just a euphemism employed by companies to hide a more unpleasant activity. PMOs and others used it to create a culture of collaboration and to show they were just trying to be helpful to the project managers they oversaw or had some accountability for.

This is why I have mixed feelings about the Monitor Risks: Tools and Techniques (formerly Control Risk) section in the Project Risk Management knowledge area in the Exposure Draft of the PMBOK® Guide—6th Edition (I know I’m getting a bit geeky on you here). I was very glad to see that the authors included a new T&T called Risk Review, but less glad to see that they retained the term Risk Audit from the 5th and current edition of the PMBOK® Guide. 

Let me explain. Essentially, they took the definition of Risk Audits from the 5th edition, took out the part about reviewing individual risk responses and placed it under Risk Reviews, and left the part about whether the project team was following the risk process under Risk Audits.

Personally, I would have left the current definition and just changed the title from Risk Audits to Risk Reviews.

What’s your view?

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LeRoy Ward
J. LeRoy Ward
is a highly respected consultant and adviser to Global Fortune 500 Corporations and government agencies in the areas of project, program and portfolio management. With more than 38 years of government and private sector experience, LeRoy specializes in working with senior executives to understand their role in project and program sponsorship, governance, portfolio management and the strategic execution of projects and programs.