PMbasics: Costs, Time, Quality
Within projects objectives result is frequently measured by business or financial results and thus determines the success of the project from the perspective of investors or companies. The success of project management is usually measured by these three factors: Costs, Time, Quality which must be in accordance with what is defined in the project plans. The costs can be defined as budget or limit of the costs for which the investor expects that will not be exceeded. Each project has a beginning and an end and investor bases its business policy on the date on which he will be able to use his assets (any delay creates costs – lost profits). Quality is the most difficult demand to measure and quality problems may arise in the implementation process, but also in the exploitation phase. The quality is most often defined by the investor and by the profession and it usually represents a prescribed quality of the materials and the process of project implementation.
Each of these factors is complex and requires a serious approach, but what is perhaps more important is the interaction between these factors.
Here is an example. 🙂
Investments in building construction such as luxury hotel and tourist complexes are one of the largest and most complex investment in terms of cost, time and quality required. In most projects, all 3 mentioned items are clearly specified in the contract, and any further changes made by any stakeholder cause significant deviations in all three factors. If the investor wants a higher quality of rooms he will increase the price, and possibaly extend the deadline. A requirement for faster development also often occurs, which usually causes higher costs (additional workers and machines), but at the same time may result in an issue of the quality of construction. Because of the large financial expenditures investors are known to demand lower costs, which should be achieved by using low quality material which means the demand for quality of the project in this case suffers.
By understanding interactions between these factors, project manager has the ability within the initial plan to make all the necessary steps to prevent any changes in the content of the project and in case they occur he can minimize the damage by implementing changes as early as possible. Also manager can warn investors and other stakeholders on the implications and thus prevent insignificant changes to the project and operate the project in accordance with the plan.