The magic triangle of project management

The guiding compass for the entire duration of the project

Estimated reading time: 8 minutes
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Many of you have probably already heard the term “magic triangle” - in training, at university or in professional life. In more than 10 years of project management, the “magic triangle in project management” has always been a great orientation aid for us as a guiding compass to ensure the success of our clients' projects.

It plays a decisive role in creating a clear initial situation with the client, in defining project goals and in change management and project progress monitoring. We would like to take a closer look at these in our blog post. In our view, the magic triangle and its many possible applications are often underestimated!

What is the magic triangle?

The magic triangle describes the three classic key dimensions of a project - cost, time and quality - and places them in relation to each other. The arrangement in an isosceles triangle represents the simultaneous dependence and competition of these dimensions. A classic project is defined, among other things, by limited available resources, which preclude the simultaneous optimization of costs, time and quality. The shifting of a corner point in the triangle has an impact on the other two dimensions. For example, postponing the end of the project automatically leads to higher costs or reduced quality if the new target is to be met.

When is the magic triangle used in which project design (classic & agile)?

The magic triangle is used in both traditional and agile project management. In classic project management, the outcome of the project is clearly defined. There is a precise idea of what the result should look like. The project is a plan-driven undertaking. In our magic triangle, the dimension of quality, often equated with scope, is therefore set, while the costs and time required to achieve this scope are estimated in the project planning phase and can change over the course of the project.

In an agile context, the triangle is reversed and is often handled more flexibly, as changes and adjustments are usually made in short iterations. These are value or vision-driven projects. Here, costs and time are set, while the concrete result can only be guessed at the beginning.

In this blog post, we focus on the magic triangle in classic project management.

Magic triangle vs. agile project management

The magic triangle in project initiation: mission clarification, goal definition and prioritization

An important milestone in the project initiation phase is the coordination of the project assignment and the definition or prioritization of the project objectives with the client. Here, the client expresses the requirements he or she has for the project result.

Specifically, he or she defines what is to be delivered, by when and in what quality, taking into account the defined resources. To make it easier for the project manager to communicate with the client, it helps to set a point on the legs of the magic triangle together at the beginning in order to establish the priority of cost, time and quality in relation to the project result. This involves jointly deciding which dimensions are critical to the success of the project and drawing a point on the axis between the two prioritized dimensions. The set point forms the basis for prioritizing the project goals as well as the basis for decisions in the event of unexpected events during the project.

In the example shown here, the “time” dimension was identified as the greatest influencing factor on the project objective, followed by the “quality” dimension. However, the location of the point in our example does not mean that a project can cause an infinite amount of costs, but rather that a set deadline with a certain quality requirement must be achieved under all circumstances. The costs can therefore be kept variable up to a certain point in coordination with the client and under the premise of prioritizing the dimensions of quality and time.

Specification of the project objectives

Now that the magic triangle has helped us to create a common understanding with the client regarding the requirements for the project result, it is next used to specify the individual project objectives.

Project objectives include not only result objectives, but also process objectives. Outcome objectives relate to the quality dimension in our triangle. They answer the question “What is the concrete result at the end of the project?”. Process objectives relate to the cost and time dimensions and provide information on how the result objectives can be achieved. Taking into account the focus set on the legs of the triangle, the project objectives are now concretized.

We recommend using the SMART method for this. This states that the project objectives should be formulated as specifically, measurably, attractively, realistically and on time as possible. This avoids room for interpretation due to vague descriptions and makes it easier to compare the project result with the objectives. As soon as the project objectives have been systematically recorded, these objectives are prioritized according to the magic triangle.

It helps to evaluate the objectives using a must, should and can categorization. Must-goals lie in the area of the prioritized dimensions in the magic triangle and must be fulfilled under all circumstances at the end of the project. The target objectives should also be achieved in full. However, these have a broader scope for action compared to the must-goals and can be handled more variably in the event of unexpected events. Optional objectives are the “nice to have” among the project objectives. If these objectives are not met, the overarching project objective is not at risk.

The magic triangle during the project term: Possible conflicting objectives

Project objectives not only serve to measure success, but also help to make decisions that are crucial to the success of the project during its duration. Identifying and weighing up potential conflicts of objectives is essential for this. Only in this way can well-founded decisions be made in accordance with the prioritization in the event of bottlenecks in the dimensions of the magic triangle.

In the following, we would like to use an example from project management to show which conflicts of objectives can arise in the magic triangle during the project term. We will start with an IT project for the introduction of new software. The following objectives were defined:

Time: The project has a time frame of ten months. Milestones were defined to mark the progress of the project, e.g. development of the software, user training and go-live.

Costs: A fixed budget was approved for the project.

Quality: The functions to be available for the go-live were defined.

Time vs. cost conflict
If, for example, there are delays in software development due to additional, urgently needed functional requirements (time dimension), more personnel resources may be required to reach the “software development” milestone on schedule. This results in higher personnel costs than planned and a budget overrun (cost dimension). The targets in the time and cost dimensions cannot be met at the same time.
According to the prioritization made in advance by the point in the magic triangle (time & quality), an increase in resources and thus the cause of additional costs is obvious here. This means that the software can be introduced on time and with all the necessary functions.
Quality vs. time conflict
Let's assume that the end of the project is approaching and the new software has already been tested. Some small, minor errors have occurred (quality dimension), but these cannot be rectified in the remaining project duration (time dimension). In order to meet the “go-live” milestone, the system must be introduced with the existing errors. The targets in the quality and time dimensions cannot be met at the same time.
According to the prioritization in the magic triangle, achieving the go-live date is the top goal and thus facilitates the decision to introduce the system with minor errors.
Cost vs. quality conflict
An important customer cancels a large order at short notice for financial reasons. This massively reduces the company's expected turnover and the project budget is cut by management (cost dimension). As a result, the developers are no longer able to implement all the planned functions (quality dimension). The targets in the cost and quality dimensions cannot be met at the same time.
In this case, the quality dimension is prioritized higher in the magic triangle, but the cost dimension has unexpectedly become less flexible. In this case, it is advisable to prioritize the functional requirements in such a way that the maximum quality can be achieved with the available resources.

In the case of all three conflicting objectives, communication with the client must be sought in order to reach a decision on how to proceed. The question to be answered is: “Which of the dimensions of time, quality or cost should be compromised?” And this is where the magic triangle and the weighting of the dimensions on its three legs help us again. True to the motto: the simplest project management tools are sometimes the most helpful.

Our conclusion

Overall, the magic triangle in project management is an indispensable tool that accompanies us throughout the entire duration of the project. It serves as a guiding compass that helps us to find a balance between time, cost and quality in the event of conflicting objectives. By consciously addressing these conflicts, we can define realistic goals, set priorities correctly and monitor project goals effectively. The magic triangle helps us to master these challenges and successfully realize projects!

Do you have questions on this topic or are you interested in a consulting service?

Feel free to contact us!

Your contact person

Sebastian Karl

+49 89 189 235 96

sebastian.karl@leitwerk-consulting.com

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Estimated reading time: 8 minutesWhat can you expect in this article?