Balancing the Trade-off among Cost, Schedule and Quality
The responsibility of a project manager is to seek the most efficient and the best way of getting a work done. But certainly the job will never go smoothly as we expect, there are many factors or sudden changes or problem arise that the project must think all the time. It is a process for the project manager to decide on a trade-off between time (schedule), cost (money) and resources which achieves the highest-quality project result. Based on the kind of change needed, there are three different levels of balancing a project in an organization:
Balancing at the project level – Making changes to keep the project on track for its original cost, schedule and quality objectives.
1. The Optimist’s choice is re-estimate the project, which helps the manager to make a second round of estimating to make a firmer foundation of acts supporting cost, schedule and resource estimates.
2. Change task assignments to take advantage of schedule float, by which the project schedule can be more flexible and the labor cost can be controlled when we consider moving people from noncritical tasks to critical tasks.
3. Adding people to the project team to make the job done faster. But for sure, it should be required as “qualified” resources; we say they are the most available people.
4. Increase productivity by using experts from within the firm. These high performers are with technical competence, well problem solving skills and more positive attitudes, who can make other people more productive.
5. For some so specialized works, we should look for increasing productivity by using experts from outside the firm to participate in product development discussions and to move the project along faster.
6. Outsourcing the entire project or a significant portion of it. Outsourcing is at the high end of the risk/return spectrum, but it should be still “under control” (do not under estimate the risks of outsourcing), such as finding qualified vendors and coming to clear agreements before work begins. Eventually, the result can be expected to be in greater productivity and shortened the project schedule.
7. Crashing the schedule if the tasks are on the critical path and need to be compress based on the cheapest cost.
8. The project manager must demonstrate clearly the ways of Working Overtime that extra work will be effective benefit on the project. Also, all the project team members agree and understand the demands of working overtime.
Balancing at the business case level – The business case for the project must be reevaluated because the cost-schedule-quality goals cannot be achieved at the project level. This reevaluation requires the authorization of all the stakeholders.
1. Reducing the product scope so that the requirements are met more accurately. Start by prioritizing the requirements, then analyzing the cost-benefit trade off of each requirement to improve the value of the product with more quickly and a lower cost.
2. When Fixed-phase scheduling is employed, the project phases are apportioned from the top down and scheduled according to the required completion date. Be sure the functionality is prioritized, ensuring only low-priority functions are cut during each phase review.
3. Fast-tracking can decrease the project schedule on overlapping tasks. But overlap is the risk, so all the team members should know the risk that might exist in the very initial assumptions with some mistakes.
4. Phased product delivery benefits on delivering something as soon as possible so that it can reduce the negative impacts to ongoing business operation. Phased product delivery also reflects an immediately feedback to improve the developing products and gets phased payment. The best application on phased product delivery is to modularized products, then its components can operate independently because not all products can be implemented a piece at a time.
5. Do it twice – quickly and correctly. Especially when we are in hurry, we should try building a quick and short term at the first, then go back to improve the second one. This is an alternative to use when the product demand is in an intense and urgent situation.
6. If the project to be asked for cost down, reducing the profit margin is a way to be considered. This is a viable option when a company must remain competitive to survive in a difficult market.
Balancing at the enterprise level – It mostly happens when a firm is with the conditions of insufficient equipment, personnel and budget. In spite of all the effort, it may not finish a single project.
1. If money is not an issue for a firm, outsourcing is can help to achieve the goals of projects.
2. Phased (small) product delivery helps more projects running at the same time.
3. Shifting work to the customer on many different projects. Use people with flexible ways to support additional projects.
4. Reducing product scope on several projects. Less considering on single product function, and more focusing on cost and benefit trade-off analysis among projects.
5. Using Productivity tools as a strategy to improve productivity across projects. The project manager has to create a vision of what is possible and then to rebalance the project in such a way that the vision can become a reality.
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