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Budgeting and Management of Operations

The Triple Constrain in Project Management (The Project Scope, Cost, & Schedule): The Case of Water, Sanitation and Hygiene Development Project

Research Paper (undergraduate) 2012 52 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Table of contents

1. Introduction
1.1. Description

2. Literature Review of Triple Constrain in Project Management
2.1. Project Scope Management Processes
2.2. Project Time e Management Processes
2.3. Project Cost Management Processes
2.4. Earn Value Management
2.4.1. Schedule Performance Measurement
2.4.2. Cost Schedule Performance Measurement

3. Water Sanitation and Hygiene Project Case Study
3.1. WASH Project Scope Management
3.2. WASH Project Time Management
3.3. Project Cost Management
3.4. WASH project Performance Management
3.4.1. Schedule Performance Measurement
3.4.2. Cost Schedule Performance Measurement

4. Conclusion and Recommendation:
4.1. Conclusion
4.2. General Recommendations

Bibliography

1. INTRODUCTION

Project management body of knowledge (PMBoK, 3rd.Ed) stated the triple constrain in project management.”Project managers often talk about triple constrains: the project scope, Time and cost - in managing the competing project requirements, the Project quality is affected by balancing these three factors [1]. The triple constrain in project management is a concept indicating the interdependency of the project scope, time and cost.

Scope is the inclusive work intended to cover in a project. It is the translation of project objectives into interventions or work, while schedule is the time required to complete the work and produce the project service or results. The project cost is predicted money obligations to accomplish the project work under a set of quality requirements that will satisfy the project stakeholders at a given period of time. The concept of triple constrain is dominant model in project management school of thought.”A project is any endeavor which is unique in scope, Time and cost, while Project management is the management of the triple constraint to the satisfaction of the stakeholders of the project”[2]. The triple constrains is very basic concept, prevailing the success and failure in practical implementation of project management.”Project management is in essence of art, science and craft required balancing the scope, time, cost and quality of project constrains”[3]. Hence, balancing the project scope, time and cost is impractical without the probity of understanding the coherency of scope, time and project cost relationship throughout the project process groups.

The Triple Constrain is remnant scale of verification for measuring, and analyzing the project performance monitoring and controlling process groups. Thus, it is not viable to disintegrate the triple constrain through one process group, whilst integrating them through the other process group will worth a valuable contribution to the project success. Performing the scope, time and cost in consistent way with same order throughout the iterating project process groups is crucial for project success and their interdependence is deliberately feasible in the modern project based management. “The performance measurement methodology (EVM) adds some critical to management process and it occurs in area of project planning, monitoring and controlling as it relates with the goals of measuring, analyzing, forecasting, reporting cost, and schedule performance data for evaluation and action work”[4]. In the planning process group for instance, project team determine what project would be done, when it will be done, and how much resource is required to accomplish the work. The performance measurement baseline (PMB) is determined within the planning process group. While, in Monitoring and controlling process group, the project team determine, if the project work is ahead or behind the schedule, if they are over or under the estimated budget. They intend to decide with what efficiency in time and budget they use to handle the work, similarly they require forecasting upon the completion of the work. “Earned Value management has proven itself to be the most effective performance measurement and feedback tool for managing projects, as it enables managers to close the loops in the Plan-Do-Check-Act management cycle”[5].

1.1. Description

The purpose of this essay is to examine the link in between the triple constrain in project management (The project Scope, time and Cost management) and it will explore the role of the project scope, time and cost management processes within the project Management discipline: particularly the project performance management .It will focus on the planning , monitoring and controlling processes of the practical case of Water, Sanitation and Hygiene (WASH) Development project implementing by CARE Somalia in the Rural Women Program(RWP).

Due to this end, this essay relies on both qualitative and quantitative secondary data, the major sources of information used in this essay are as following:-

- CARE Somalia and South Sudan, organizational strategies, policies, regulations, standards pertaining to project and program management
- The Project management Methodology of some donors including European Union (EU) that referent to practical Case of Water Sanitation Hygiene Project.
- The entire Rural Women Program documents such as the program strategic plan. Project proposals, baseline studies and Evaluation reports etc.

The major limitations of this essay are time and Data. The practical case of this essay requires more primary data input, if more understanding of the project management aspects is in focus, to propose strategies that could be employed to enhance the future project Management facets of the similar projects that will not last without devoting more time to data collection. Therefore, it intents on academic objectives, it tries to fit the practical standards of project management Institute with that of Water Sanitation Hygiene Project. Most of the data in this essay was rearranged to suit with the PMI standards. Similarly, all of the existing organizational policies of CARE Somalia were not reached to integrate with the essay; it reflects only the available data in Eianabo sub-office of CARE Somalia.

This essay has three major significances. First it has an academic significance as it will acquire me the understanding of the Budgeting and Management of Operations course objectives. It reflect myself study upon the coverage of the project management processes and their relations. It will also combine my academic education to my professional that will enhance my experience to the project management discipline.

Secondly, it will assist me to familiarize with the existing CARE policies, strategies, standards and regulations pertaining to the project management and their effect on the implementation of project and program management. In addition, it will illustrate the practical linkage in-between project scope, time and cost management in the case of Water sanitation and hygiene (WASH) project planning and implementation process.

This essay consists of four chapters: The first chapter the introduction of the essay. The second is the Literature of triple constrain in project management. It explains the project scope management process, the project time management process, the cost management process and Earned Value management. The Third chapter will illustrate the practical case study of Water, sanitation and Hygiene (WASH) project. It examines the existing link among scope, time and Cost management of WASH project. The final Chapter is the conclusion and recommendation.

2. THE TRIPAL CONSTRAIN IN ROJECT MANAGEMENT

Project management Institute (PMBoK, 3rd.Ed,) defined project management as “Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Meeting or exceeding stakeholder needs and expectations invariably involves balancing of the competing demands among: the Scope, time, cost, and quality”[6]. The concept indicating the relationship in between the project scope, time and cost is known as project management Triangle. It is a triangle whose angles are one of the scopes, Time and project costs which are balanced and proportional.

Nonetheless, this concept emerges from the theory of triple constrain. “Theory of Constraints is telling us, that there are three variables of a project which one needs to manage for its successful completion – Scope (what needs to be built), Time (time required to get it built) and Money (money required to build to what is there in the Scope in the given Time)”[7].The triple constrain in project management enlightens the interdependence of the three indispensable goals of project management that are project scope, Time and cost Management.

The theory indicates that “A project is defined by its scope, schedule, and budget, and the triple constraint of project management describes the phenomenon that, if we change one of the three, will influence the other two”[8].

illustration not visible in this excerpt

Figure 2. Indicating the project Management Triangle

If the theory of triple constrain is true, than it will be valuable to examine the role of triple constrain in conducting the modern project management , what direct and indirect link exist in-between the scope, time and cost management processes and how they do affect the project performance management.

The existing literature of triple constrain revealed that the scope, time and cost management are the most important areas in project management. Several terms were referred to the triple constrain in project management, the most common terms are core project process. Enabling project process and Core project Functions. All of these terms are indicating the significant role of scope, time and cost management within the project based management

.(R. Max Wideman, 1996) for instance, indicated that there are four core or constraint project functions: these core functions are the project scope, quality, time and cost. The project quality is a part of project scope requirements that is intended to acquire for the satisfaction of the project stakeholders. Hence, the remaining three of the scope, time and Cost are the core functions of project management.. The Project Management for Development Organizations (PM4DO) had defined the Triple constrain as an Enabling Process. “Enabling processes are the scope management, cost management, Time management and quality management. These are enabling processes because they lead to specific objectives of the project and basis to define the project success on time, under budget and the stakeholders’ requirements”[9]. There is a consensus that the triple constrains are the three cornerstones of project management whose balancing remains the key success of project. (Choudhuri Niladri Mallick,2006) for example explained the Core processes as a “planning processes that have clear dependencies required them to be performed in essentially the same order on most projects. For example, activities must be defined before they can be scheduled or budgeted”[10]. On the contrary, these processes are Core Project Management Processes; project scope, time and cost, and it must be performed the same order throughout the project Process groups.

Project management Process groups are logical grouping arrangements of project management processes. According to Project management body of knowledge (PMBoK, 3rd.Ed) there are “five process groups in project management that are the initiation process groups, planning process groups, executing process groups, monitoring and controlling process groups and closing process groups”[11].these project process groups interact and overlap from each to other. The planning process groups for instance provide the details of work to be done to bring the project planning phase to successful completion, as well as some descriptions of the work to be done within the later process groups. This “progressive detailing of project plan is called the Rolling waving planning”[12] Project process is a set of sequential activities accomplished to attain specific project result. “Project process is defined as a set of activities that must be performed to achieve the project goals of Scope, Time and Cost”[13]. It is a set of activities that has both input, tools and techniques to produce an output. Some processes are more influential than the others as their output became the input of almost all project management processes of the nine knowledge areas in project management.”The output of one process becomes input of other process within the same knowledge area or with other knowledge area”.[14] Hence, one project management process became the mother of one or more other project management processes, altering the parent process will result change of the child process that will definitely affect its area. Therefore, the linkages in between the project management processes are characterized to their inputs and output. “Within each process groups, the individual processes are linked by their inputs and outputs“[15].the link in between the project scope and project time or cost for instance are the number of outputs from the project scope management processes that become inputs to project time or cost management processes.

.1. Project scope Management Processes

Scope relates with the limit of project work boundaries. Project scope defines the unique product, service and results that a project will produce and those products that it will uncover.”Scope is the overview that all stakeholders have from the project; it is a definition of the limits of the project”[16]. Project scope management is therefore the process to ensure that project includes all of the necessary activities for the achievement of certain objectives. Project scope is the skeleton of the project and the base of other project time and cost management parameter. The success of a project relates with the effectiveness and effort given to its scope management; If the project boundaries are undefined than its objectives are not clear. According to (PMBok, 2004) “Project scope management includes the process required to ensure that the project includes all work required and only the work required to complete project successfully”[17].

Some of the serious effect of project scope negligence is to increase its work without extra budget and time. “Scope creep, or the uncontrolled changes in a project's scope, is the tendency of a project to include more tasks than originally specified, which often leads to higher than planned project costs and an extension of the project end date”[18].conceptually, scope creep is adding to project scope without considering the time and cost. The decency of Project scope management is process of delineating the project margins through application of tools, and techniques pertinent with the project management methodology adopted in an organization.

The project scope Management consists of a series of activities, tasks and steps to manage the project deliverables.“The project scope management comprises of five processes of collecting the requirements, scope definition, Work Break down structure (WBS), scope verification and scope controlling”[19]. Each of these processes has its input, tools and technique and output. These processes interact each other, the output of one of the five processes became the input of the other process..Unlike the other knowledge areas this scope management has the strongest interaction with other areas as it relates with the translation of the project objectives into intervention that will turn out the project product, service and results.. “Project scope is the work that needs to accomplish for the delivering of the required product, service, and result with the specified features or functions”[20]. It relates with all products, services and the results of the project deliverables acquired to meet the demand of its stakeholders, collecting the requirements is the first process in the project scope management. It is the means of defining the stakeholder’s desires supposed to response by the project. The requirements are what the stakeholders are expecting from the project that must be analyzed and documented. The project requirements are the base of the work breakdown structure, the project cost and scheduling.

According to the (PMBOK,2008) the organizational processes assets are the major inputs for collecting the requirements. The strategic objectives and goals of the organization first open the door to collect requirements of a project. It began with analyzing the information containing the project charter, and stakeholder registrations as other two vital inputs in this process[21].” It would be difficult to document the requirements, if the purpose of the project: the product, services and results that you are intended to produces remains unclear”[22].the project charter will help the team to understand the overall purpose of the project. facilitating workshops, focus groups, questionnaires, interviews, surveys group creativity techniques and group discussions are the tools and techniques of collecting the Requirements. According to the (PMBOK,2008) the output of collecting requirements are stakeholders registration documentation, requirement documentation and requirement traceability matrix.

Once we document all project and product requirements, the next is to determine what we can do within the project and what we cannot do within it. This is to define the project scope.“Defining the project scope is the process of developing a detailed project and product”[23].The project charter and project deliverables as well as the initial assumptions and constrains is further detailed in the scope definition.

According to (PMBoK, 2004) the inputs of this process are the project charter, requirement documentation and organizational process assets. expert judgment, product analysis, alternative development and facilitated workshops, are the major tools and techniques adopted within this process . project scope statement and updates of the project documents are the major yields from the process.

(PMBoK, 2008) indicated that the level of details that the project scope statement defines the work that will be performed and the work that is excluded determines how well the team could control the project scope.The project work break down structure is the decomposition of the defined project scope into a small manageable work package. It organizes the total project scope into a hierarchical tree that describes the planned outcome of the project rather than planned actions. The fundamental designing of WBS is called the 100% rule. “The 100% Rule states that the WBS Includes 100% of the work defined by the project scope and captures all deliverables – internal, external, and interim – in terms of the work to be completed, including project management”[24]. The WBS indicted this rule is hierarchical arrangement of the project work from goal to task and sub task that will enhance the degree of project team confidence of their budget planning and activity scheduling.

According to the PMBok,2008 the input of this process is the project scope statement, the requirement registration, and the organizational process assets. “The tools and techniques used within the process are decomposition and its outputs are the project WBS and WBS dictionary”[25].

The defined scope and WBS will need the commitment of project stakeholder satisfaction, Project Scope verification is therefore the processes of formal acceptance of the established project deliverables by the stakeholders. According (PMBoK,2008) the major inputs of the scope verification process are the project management plan, requirement documentation, requirement traceability matrix and validated deliverables. Inspection is the major technique used for the scope verification. The acceptance of deliverables, change request and update of the project document are the output of the scope verification process.

The well suited scope must be used to control tracking of the project activities. The Scope controlling process relates with the monitoring of project and product scope status. It is the process of controlling the scope baseline of the project. According to (PMBok,2008) the input of this process are the project management plan, work performance information, Requirement documentation, requirement traceability matrix and organizational process group. Variance is among the tools and technique used in this process.“The outputs of the scope controlling process are change request, project management plan updates, project document updates, organizational process asset updates and work performance updates”[26].

2.2. Project Time Management Processes

Project time Management is the process to manage the time to complete the project activities and produce the intended unique project deliverables. “The term of project scheduling consists of the tightly linked process of defining the project activities, sequencing of activities, estimating the activity resources, estimating the activity Duration, and developing the project scheduling”[27].

Defining the project activities is the process to identify the task and sub-tasks that would produce the project deliverables. We highlighted in our earlier scope management discussions that WSB is decomposition of project scope into deliverables and that work breakdown structures are further divided into work packages which are alienated into activities and tasks. The project deliverables are the mother of project work packages, and activities are the children of the project work package. Activities are therefore the smallest tasks arrangements towards acquirement of project deliverables or outcome.

Defining the project activities are the ultimate link in-between the project scope and project time. The 100% rule of WBS discussed earlier was decomposing of project deliverables into the smallest task and sub tasks that were the cornerstone of both project time and cost management. According to (PMBoK,2008) the inputs of project activity definition are scope baseline, enterprise environment factors, and organization process assets. Decomposition, rolling waving planning and templates are the tools and techniques of defining project activities. The output of the process is the activity list, activity attribute and the project millstone list.

After defining all of the project activities, the subsequent query is the logical sequence of the project activities. Activity Sequencing is therefore the process to describe the relationship in-between the identified project activities, arranging them into a logical sequence. “Every activity except with the first and last activities are connected to at least one predecessor and one successor”[28], drawing a visual diagram of the logical sequencing of the activities and the activity float and slake, and critical path are calculated. Critical Path is the longest path of activity sequencing from project start to completion that have no float.

According to (PMBoK,2008) the Inputs of the activity sequencing process are the activity list, activity attribute, milestone list, the scope statement and organizational process assets. Precedence diagram method, the dependency determination, lead and lag application and scheduling templates are the tools and techniques used in this process. The outputs of the sequencing process are the project schedule network diagram, and project document updates.

Though we worked out of the activity sequencing, it is misconstrue to forecast the duration to complete every project activity without realizing its resource requirements. Hence estimating the activity resource requirement is the method of determining the quantity and type of resource needed to achieve the completion of each activity, it relates with the activity resource requirement such as human resource, equipment and material supplies. Estimating the activity resource requirement has functional relationship to the activity cost estimating and budget.

According to (PMBok, 2008) the inputs of this process are the activity list, activity attribute, the project scope statement, the resource calendar and organizational process assets. The major tools and techniques of the process are alternatives, expert judgment, bottom up estimate and software. The outputs of estimating activity resource are the activity resource requirement, activity resource breakdown structure and project document updates.

Estimating the activity duration is the process of calculating the approximate period of time to acquire the completion of a project activity with predetermined resources. According to (PMBok, 2008) the inputs of the estimating the activity duration process are among the project activity list, activity attribute, activity resource requirement, the project scope statement and organizational process assets. The process tools and techniques are expert judgment, analogous estimating, parametric estimating, three point estimating and reserve analysis. The outputs from the estimates of project activity duration process are the activity duration estimate and project document updates.

Now we are in a position to develop the activity schedule with activity starting date and ending date in a visual drawing or diagram. Developing activity scheduling is the process of analyzing the above discussed four processes within project time management processes such as activity duration, activity resource requirement, and activity duration estimates under the consideration of the related constrains. The activity scheduling is therefore the combination of the processes in the project time management knowledge area that serves as activity baseline. According the (PMBoK,2008) the inputs of developing schedule are the activity list, activity attributes, activity resource requirements, activity duration, project scope statement , enterprise environment factors and organizational process assets. Whereas the tools and techniques used in this process are schedule network analysis, critical path methods, resource leveling, critical chain method, what if scenario analysis, analysis of project lead and lags, schedule compression and scheduling tools.(PMBoK,2008) stated that the output of the process are project schedule, project schedule dates and project schedule baseline and project document updates. The project baseline schedule to monitor across the project progress is inevitable for measuring the project achievement towards its goal. Controlling the project activity Schedule is the process of monitoring and adopting the progress status of the project activities across the schedule baseline.

According the (PMBoK,2008) the input of this process are project activity schedule. Work performance information, and organizational process assets. The major tools and techniques used within this process are the variation analysis, work performance review, scheduling tools, schedule compression and resource leveling, while the output from this process are change requests, work performance measurement and updates of project documents.

2.3. Project Cost Management Processes

Project cost management is the process of predicting the estimate, budgeting and controlling the cost of resource intended to complete the project in specified period of time.”A prediction of quantities of resources required by the scope of an asset investment option, activity, or project is an estimate that must address risks and uncertainties”[29]. It relates the skills, tools and techniques to predict the expenditures to complete the smallest particles of WBS of a project scope. The smallest work package relating with the project cost is known as the cost controlling account. “Estimates are used primarily as inputs for budgeting, cost or value analysis, decision making in business, asset and project planning, or for project cost and schedule control processes”[30]. According to (PMBoK,2008) the estimating cost, developing budget and controlling the budget are the three processes within the project cost management.

Estimating the cost to handle a project activities is the process of approximating the monitory value of the resource needed for completing the project activities under a set of quality standards at given period of time. According to (PMBoK, 2008) the inputs of the estimating cost are among the project activity list, activity attribute, activity resource requirement, the project scope statement and organizational process assets. The major tools and techniques used within the process are expert judgment, analogous estimating, parametric estimating, three point estimating and reserve analysis, while its outputs are cost estimates and project document updates.

After when activity costs are estimated, the next is to convert the estimates into budget. Developing budget is the process of summing up all of the predicted of individual activities or tasks that are authorized as cost baseline. According to (PMBoK,2008) the input used in this process are activity cost estimates, bases of cost estimates, scope baseline, project schedule, resource calendar, contracts and organizational process assets. While as the major tools and techniques are cost aggregates, reserve analysis, expert judgments, and historical relationships, and funding expenditure factors. The ultimate outputs of this process are budget performance baseline, funding requirements, and project document updates.

A sound project budget controlling is crucial for the project efficiency. Budget controlling is the process of monitoring the project progress status and updating the budget baseline. According to (PMBoK,2008) the major input used for this process are project management plan, budget performance baseline, cost management plan, funding requirement, work performance, and organizational process assets. Earning value management is the method used in this process while performance measurement, budget forecasts, organizational process assets updates, project management plan updates and project document updates are the ultimate results from the process.

2.4. Earned Value Management

The Earn value management is an important method that integrates the performance measurement of triple constrain. “Most of junior and senior project managers understand the triple constraints of any project, Time – Cost – Scope, however confusion arises when it comes to exactly knowing and calculating those triple constraints also known as performance measurement baselines”[31].The earned value management witnesses the mathematical relationship in between the triple constrain. “Earned value management (EVM), or Earned value project/performance management (EVPM) is a project management technique for measuring project performance and progress in an objective manner that has the ability to combine measurements of scope, schedule and cost in a single integrated system”[32]. The Earned value management (EVM) baseline of scope, time and cost man oeuvre in project planning process group, becomes the most effective performance measurement methodology in the project monitoring and controlling process group.

Earning value management has three values: the planed value, the earned value and the actual value. The planned value (PV) is the budget supposed to spend for the accomplishment of a project activity through a period of time.”Planned value is numeric refection of the budgeted work scheduled to perform in time and it is established Baseline or performance measurement baseline”[33]. Planned value is based on the scope of work intended to complete in certain amount of budget at a time. It is also known as the Budgeted Cost of Work Scheduled (BCWS) . Earned Value (EV) is the amount of work that has actually been completed up to this position of time. “Earned value is snapshot of work progress at given point of time. It is also known as The Budgeted Cost of Work Performed (BCWP)”[34].The actual Cost (AC) is the total amount of resources used to complete the actual work in period of time.“The actual Cost also known as The Budgeted Cost of Work Scheduled (BCWS) is an indication of the level of resources that has been expanding to achieve the actual work performed to date .”[35] When the Planed value, Earned Value and the Actual cost of project work is determined, one can calculate the variances that are the schedule variance (SV) and the Cost Variance (CV).

[...]


[1] Project management Institute(2004) PMBOK 3rd.Ed.new York: Project management Institute, p8

[2] www.project-management-knowhow.com

[3] www.PM4DO.com

[4] Project Management Institute (2005) the practical standard for Earned Value Management. New York:PMI.pp1

[5] Project Management Institute (2005) the practical standard for Earned Value Management. New York:PMI.pp1

[6] Project management Institute(2004) PMBOK 3rd.Ed.new York: Project management Institute, p8

[7] www.project-managementknowhow.com

[8] www.project-managementknowhow.com

[9] PM4DO fundamentals of project management,pp55

[10] http://www.isqa.unomaha.edu/pietron/

[11] http://project-management-knowledge.com/definitions/p/project-management-body-of-knowledge-pmbok/

[12] PMBoK(1996)pp29

[13] http://www.scribd.com/pm4dev/d/15264100-PM4DEV-Project-Scope-Management

[14] http://www.scribd.com/pm4dev/d/15264100-PM4DEV-Project-Scope-Management

[15] PMBoK(1996).pp29

[16] www.PM4DEV.com -Project-Scope-Management

[17] Project management Institute.(2004)project management body of knowledge. New York: Project management Institute pp66

[18] http://www.scribd.com/pm4dev/d/15264100-PM4DEV-Project-Scope-Management

[19] PMBok(2004)

[20] PMBok(2008), pp4

[21] PMBok(2008), pp48

[22] Project Management Institute.(2007).A Guide To Project Management Professional Exam( 2nd. ed..).New York: Wiley publishing lc

[23] (PMBoK,2008), pp49

[24] Project Management Institute (2006) the practical standard for work breakdown Structure.(2nd.Ed).New York:PMI.pp8

[25] www.PM4DEV.com -Project-Scope-Management

[26] www.scribd.com /pm4dev/d/15264100-PM4DEV-Project-Scope-Management

[27] PMBoK 2008

[28] PMBoK 2008

[29] www.eeul.com

[30] www.eeul.com

[31] www.freebase.com

[32] Earned value management .http://en.wikipedia.org

[33] Project Management Institute (2005) the practical standard for Earned Value Management. New York:PMI.pp7

[34] Project Management Institute (2005) the practical standard for Earned Value Management. New York:PMI.pp7

[35] Project Management Institute (2005) the practical standard for Earned Value Management. New York:PMI.pp8

Details

Pages
52
Year
2012
ISBN (eBook)
9783656266884
ISBN (Book)
9783656268017
File size
1.7 MB
Language
English
Catalog Number
v198786
Institution / College
Atlantic International University – School of Business and Economic
Grade
1
Tags
budgeting management operations triple constrain project scope cost schedule case water sanitation hygiene development

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Title: Budgeting and Management of Operations