The best predictor of project success is realistic stakeholder expectations. The PM must use definition and planning techniques to balanced the project scope against the three most common project constraints: time, money and resources.
There are three levels of balancing a project:
- Project: requires making changes that keep the project on track for its original cost, schedule and quality objectives. The PM should have the authority to make these decisions.
- Business case: if the project cannot achieve it's cost/schedule/quality goals then the business case for the project should be reexamined. Changing any of the project goals puts this decision beyond the authority of the project manager and team because:
- Cost goals are related to profitability goals
- Schedules are closely linked to the business case
- Changing features and performance level affects the quality and value of the end product
- Balancing the project to the business care requires agreement from all stakeholders, most of all those who will be affected by the changes
- Enterprise: the firm has to choose which projects to pursue. This is well beyond the authority of the PM and project team.
Techniques to balance at the project level include:
- Reestimating the project. By checking your original assumptions in the statement of work and work package estimates, it is hoped that increase knowledge of the project will allow you to reduce pessimistic estimates. Make sure your estimating assumptions about productivity, availability of skilled people and complexity of tasks are consistent and match all available information. The second round of estimation should create a firmer foundation of facts supporting cost, schedule and resources estimates.
- Change the task assignments to take advantage of schedule float. This could reduce the schedule with no change in labor cost, however this may compromise efficiency on non-critical tasks. To be effective, the tasks must be of the same resource type, the noncritical task needs enough float to allow it to be delayed without delaying the whole project, and you must be able to reduce the duration of the critical path tasks by applying more people.
- Add more people to the project. Diminishing marginal returns predicts that this will work in most cases, but only so much, and this method requires qualified resources. Task independence is important to productivity from additional people...the more independent the task the more benefit to adding labor.
- Increase productivity by using experts from within the firm. Create an optimal mix of average and star players by making experts within the team by putting the same people on related tasks; and using the WBS, network diagram and work package estimates, identify the tasks that benefit most from top talent.
- Increase productivity by using experts from outside the firm. Don't let these experts become islands working alone, they should be integrated into the project team.
- Outsourcing the entire project or a significant portion of it. This moves a large portion of the work to experts who should be able to deliver with greater productivity and shortened schedule. However, shifting responsibility creates more risk as the PM will have less control and there will be less expertise inside your company at the end of the project than if it was done in-house. Also, finding qualified subcontractors for large projects is a major subproject in itself.
- Crashing the schedule. Reduce the duration of the critical path by identifying which tasks are least expensive to compress. It may throw off estimates. Maintaining a crash table (or a cost/schedule trade off table) will help to identify the path where the payback will be the greatest.
- Working overtime. Increasing the daily hours of the project team avoids the addition coordination and communication cost of adding more people. However, overtime costs more and there are many intangible costs and an increase in "undertime" to compensate.
Rebalancing at the business case level can be done by:
- Reducing the product scope
- Fixed-phase scheduling
- Fast-tracking
- Phased product delivery
- Do it twice - quickly and correctly
- Change the profit requirement
Balancing at the enterprise level mainly confronts the constraints of insufficient equipment, personnel and budget. Alternatives at the enterprise level are variations of the ones applied at the project and business case levels.
- Outsourcing
- Phased product delivery
- Shifting work to the customer
- Reducing product scope
- Using productivity tools
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