But if PMs think of it, Cost can be represented as a function of ‘Standard and Nature of the Resources used’, ‘Time the resources is used’ and ‘the scope that is achieved in the said time and using the said resources’. To represent mathematically, Cost = f(Resources, Time, Scope).
The premise of this article is that a PM has to understand the relationship between Scope to be achieved, Resources and Time available, at any given point during the life of the project, to ensure that the project is under control and the project objectives are met.
Let us elaborate on the concept. Scope, Time and Resources can be represented as a two dimensional graph as shown below. Resources are shown on the vertical (Y) axis. Time is shown on the horizontal (X) axis. Scope is shown as a curve illustrating the relationship between the time and resource on a given set of requirements. The point to be understood is that a project will succeed if only if, the intersection of time and resource lands on the intended scope curve.
The figure above illustrates three fundamental truths
- No matter how many resources you add to a project, there is an absolute limit to how quickly the project can get done, i.e. the curve will never intersect the X axis (Time) and Y axis (Resources).
- The second truth is that if you take away enough resources, the project will never get done.
- The third truth is that when all three are fixed by management (scope, time and resource) there is no project management to be done.
As long as two of the three variables of time, resource and scope are fixed, the third can be manipulated to complete the project successfully. If time and scope are fixed, you can increase the resources (more people, more skill, more overtime, better equipment and so on). If resources and scope are fixed, you can lengthen the time to delivery. If time and resources and fixed, the scope can be varied. But unfortunately, this is not the case and most of the projects fail because change in resources, time and scope happens in a manner that is opposite to what is mentioned above. This results in failed projects. Let us use the same graph (slightly modified) to understand why.
The simple graph above provides an elegant illustration of why projects often fail.
- The requirements increase via ‘Scope Creep’, but the due date and staffing level aren’t changed. Most of the managers don’t get to prove that the scope has increased because they fail to baseline the scope of the project. At some point in time during the early days of the project, the project manager has to announce to all the stake holders the requirements that would get done with a set of people and the time within which it would get done. He/She also has the responsibility to tell the stake holders that any change in any of these three variables will have an impact on the outcome of the project. Most of the fixed Price projects fail because of poor change management. Though we have a Change Control Board in place, the lack of a baseline will prevent us from delineating what is in scope and what is out of scope.
- The due date is moved up, but the resources aren’t increased. Scope of work remains same. Because of lesser time, lesser amount of work (the scope) is completed and hence the project is a failure.
- The resources are decreased, but the due date is not extended. Scope of work remains same. Because of lesser resources, lesser amount of work (the scope) is completed and hence the project is a failure.