Is Your Project Seeing Red?

by Jerrod Hock

Align your project for success and a healthy ROI by learning to manage the triple constraint.

Most people in the business world expect their projects to be completed on time, meet their quality objectives and fall within the allocated budget. To most managers, time and money are critical factors to be carefully considered in any decision. These various factors make project management extremely challenging for organizations—and perhaps why time, quality and cost are commonly called the triple constraint.

Today's business leaders recognize that advanced decision-making capabilities using proper project management techniques can directly improve their organization's performance. To do so, however, a project has to be meticulously planned, effectively implemented, and professionally managed to optimally achieve the objectives of time, cost, and quality or performance. Proper alignment of project objectives, customer requirements and resource capabilities are also key requisites for managing project success and return on investment (ROI).

A project manager’s toughest decisions are to ensure their projects stay on the correct course and follow the defined flight path. A recent survey found that more often than not, these decisions are based on 30 percent data, 30 percent group think, and 40 percent intuition, which is really past experience.

The role of project management is to deliver projects on time and on budget for optimum return on project investment. Effective project management practice should lead the way to results your business can bank on and add value.

Aligning Your Project for Success and ROI
Executing a project successfully and delivering a healthy ROI is an important project management challenge. To be successful, a project team needs to manage the triple constraint. Project management practice means less time in meetings and more time to work on the activities and deliverables of our projects… time management!

To achieve real success, the basic goal of ROI must be aligned with the project’s time, cost and quality objectives. An effective project management practice should:

  • Define the work in a well-defined scope document that has been signed by all team members, sponsors, stakeholders and the project manager.
  • Align project timing to meet customer and market requirements—as part of how long it will take the team to complete the work scope. Your product will not deliver an optimum ROI if your competitor beats you to the marketplace. Schedule is usually the one of the key drivers of the triple constraint.
  • Align project cost management to deliver business ROI goals, not simply a low-cost product. A product without sales and margin will not deliver a healthy ROI or increase your business revenue. A project also needs to meet budget. Along with schedule, most businesses need to meet their project’s established budget.
  • Align project quality to customer expectations, not just in-house measurements. A product that meets your internal quality standards won’t be successful if the product or project delivery quality doesn’t satisfy your customer’s measurement of quality. Quality typically becomes the forgotten constraint of the triple constraint, usually sacrificed to meet schedule or budget. This could have major impact on the actual ROI of the project.
  • Align project resources to deliver healthy business growth product programs, not every new product idea that is raised. Trying to satisfy too many unaligned, under-resourced programs compromises real ROI opportunities.

Case in Point
The following is based on a real project management case study. Mike Winkler attended ALIPRO’s Project Delivery Cycle (PDC) training expecting a project management refresher. However, by the end of the training, his whole perspective on how to manage programs had changed. He learned the importance of managing program ROI and how to use PDC practices to accomplish this practice.

Mike left the training energized and on a mission to manage his program success and ROI. His first task was to determine the true state of his program. Using the project financial model he received in the training, he quickly generated his first ROI forecast and realized he had a big problem!

  • Mike’s product development program was on schedule; however the sales activities needed to support production volumes were running six months behind.
  • The product’s design met all the technical requirements, but was 30 percent over the targeted cost.
  • He discovered the product sales forecasts were based on optimistic estimates that had not yet been confirmed by any customers.
  • Even with optimistic sales forecasts, the product would never break even over its five-year lifespan.

Mike’s program ROI status was in fact bright red. He knew he had his work cut out to put the program back on a healthy course.

Using what he’d learned from the training, Mike was able to refocus his team to manage their program ROI. He began by “walking the patch” to proactively manage day-to-day issues and bring a new sense of urgency to his team. This improved their performance by readily fixing problems, forcing decisions and providing clear direction. He also implemented a structured PDC to emphasize the management of time, cost, quality, resources and ROI. This ensured the team met at regular intervals to resolve crucial delivery issues. Additionally, Mike used project management methodology for delivering projects and programs to center team meetings on problem resolution. Meeting time was reduced by three hours per week and yielded improvements that addressed and corrected program issues and made sure the next set of deliverables were met.

By using the financial model from the PDC training, Mike took control of his program ROI forecast. His team learned how to use this information to manage their delivery performance and identified and implemented changes to work their program ROI from red to black. Mike also enrolled his management team by regularly presenting program status using PDC report formats. By identifying key ROI issues, his organization’s eyes were opened to act on high-level delivery issues and provide Mike with the direction and support his program needed.

Six months after his training, Mike highlighted how the application of PDC practices helped him turn his program around:

  • First, Mike was able to convince the organization of the serious state of his program. He got senior management to agree to delay production launch by six months in exchange for his commitment to recover the ROI forecast.
  • He then redirected his team to redesign the product and reduce its cost base. Within four months, the team successfully eliminated 40 percent of the product cost.
  • He also enrolled the sales organization to sharpen his team’s customer focus. He expanded advance marketing of the product, generated sales and identified new lucrative product options to increase sales margins.
  • Finally, his team learned to use PDC practices to identify, assess and eliminate further issues to protect their program ROI.

The Bottom Line
And what happened in the end?

The program was launched on schedule, and within two years of full-scale production, was the first company product to gain its projected market share. Mike’s product still yields a significant return to the business, and his team members have moved on to develop and launch other successful products following PDC practices. As for Mike, he now leads other program managers to succeed by managing their program ROI.

It is important to use project management practices, which are basic, easy to understand and can be rapidly applied to demonstrate value on projects. Most importantly, good project management practices center directly on managing your project’s bottom line. iBi

Jerrod Hock is vice president of ALIPRO, a registered education provider for the Project Management Institute. For more information on PDC training or other project management services, visit