8th International Quality Conference

May 23th 2014

Center for Quality, Faculty of Engineering, University of Kragujevac

Bojan Stojčetović 1)
PROJECT MANAGEMENT: COST, TIME
Dragan Lazarević 1) AND QUALITY
Bojan Prlinčević 1)
Abstract: Over 50 years Iron triangle is used in
Dejan Stajčić 2) project management for measuring project success.
Slavica Miletić 3) Cost, time and quality is a closely related, and change
1) High technical school of of one affect on the other. Simply completing the
professional studies, Zvečan, project by the given due date and within budget is not
Serbia sufficient, because the project must also be of
bstojcetovic@yahoo.com acceptable quality. In today's world with a distinct
lazarevicddragan@yahoo.com competitive in the business world, the quality is
2) Utility service department perhaps the most important element of competitive
„Vodovod in Valjevo“, fighting. In addition to the benefits, quality
Serbia requirements and certain costs and their relationship
stajcic@verat.net is presented in the work that follows.
3) Mining and Metallurgy Keywords: projects, cost, time, quality, iron triangle
Institute, Bor, Serbia

1.INTRODUCTION

A project is a temporary endeavor constraints are balanced. Very often

undertaken to create a unique product, project managers try to maximize project
service or result [1]. One of the biggest quality within a given deadline and budget.
problem of project managers is to
harmonize project cost, time and quality. 2. THE IRON TRIANGLE
It is difficult to achieve this because cost,
time and quality are related in the way that Perhaps the most well known measure
change of one influence on the other two. of success criteria in projects is the ‘Iron
Project managers typically try to balance Triangle’ that places cost, time and quality
the three when meeting project objectives, at the center of project success. However,
but they may make trade-offs among the projects that are delivered on time, within
three during project implementation in budget and meet scope specifications may
order to meet objectives and satisfy not necessarily perceived to be successful
customers. There are many examples in by key stakeholders [2].
practice that projects were delivered on The Iron Triangle was originally
time and within budget but failed to meet conceived as a framework to enable
the expectations of end users. project managers to evaluate and balance
Every project has an anticipated level the competing demands of cost, time and
of quality for the project deliverables. The quality within their projects [3].
details and specifications set out by the The triangle was named Iron triangle
customer determine what the expected because although the sides can shorten or
level of quality is. lengthen, they are unbreakable. They can
A project is a one-time task ebb and flow as needed but the three sides
constrained by time, cost, and quality, and are in constant contact and must adjust as
its success depends on how well these the other sides do.

8th IQC May, 23 2014 201

 Centre to the concept of the Iron needed, which also will lead to an increase
Triangle is the mutual dependency in cost. A tight time schedule could lead to
between the three constraints: increasing a decrease in quality and subsequent
quality will increase the amount of time increase in cost [4].
Quality

Cost Time
Figure 1. The iron triangle

When implementing the Iron Triangle priorities and motivation for the various
into practice it is crucial to ask the project stakeholders and how well the project is
team to rank the three constraints. understood.
If changes occur it is important for the Some authors [5] and researchers [6]
project manager to assess the impact of the use the constraint “scope” instead of
given event or decision and create a range “quality” and argue that quality is one of
of options. In addition, it is the project the major components of the scope
manager’s role to show the impact on the constraint.
three constraints and thereafter create the The relationship between quality, cost
necessary balance between them[4]. and time is presented in figure 2. [7]
The Iron Triangle is an excellent tool
for a project manager to discover the

Figure 2. Quality-cost-time relationship model

202 B.Stojčetović, D.Lazarević, B. Prlinčević, D. Stajčić, S. Miletić

 8th International Quality Conference
May 23th 2014
Center for Quality, Faculty of Engineering, University of Kragujevac

3. QUALITY IN PROJECTS If individual activities are excessively

crashed, rework, modifications, or even
project failure may occur. Quality checks
The Project Management Institute must be performed immediately after the
defines quality as “the degree to which a completion of each individual activity, and
set of inherent characteristics fulfill corrective actions such as rework or
requirements.” The set of inherent modification can be taken if the quality is
characteristics may be a product, processes not acceptable. If rework is necessary to
or system. The requirements may be those improve quality cost and time will be
of customers or stakeholders, an important increased.
group that is ignored at great peril to the Several quality-related problems are
success of the project. unique to projects. First, it is difficult to
Project quality management includes measure project quality. Often
processes and activities of the performing stakeholders cannot evaluate the true
organization that determine quality quality of the project results until the
policies, objectives and responsibilities so realization and then it is too late to do
that the project will satisfy for needs for anything to resolve gaps. Or gaps can be
which it was undertaken. It implements the resolved but with cost and time overdrafts.
quality management system through policy Second, because projects outcomes are
and procedures with continuous process some new and unique endeavors (product,
improvement activities conducted service...) there are no, or very few
throughout as appropriate. [1] standards which can be used to evaluate
Once a project has been completed, quality.
the time and cost tradeoff problem is no One of the key principles of project
longer an issue for the project manager, quality management is that quality is
and quality or performance becomes key planned in, not inspected in. Planning for
issues. quality is more cost-effective than
Before a project manager can plan for inspecting work results and doing the
quality, he must know what the quality work over, or correcting problems to
expectations are. As part of the quality adhere to quality demands.
management, the project manager and the
project team must identify the 3.1 Benefits of quality in projects
requirements of planning, determine how
the requirements may be met, and identify The benefits of quality in project
the costs and time demands to meet the performance are many. Some of them are:
identified requirements. If the outcome of Customer satisfaction – quality
a project meets or exceeds the project project and product will yield customer
contractor's expectations, the project is satisfaction. A satisfied customer may
deemed successful. perceive greater value than originally
The project contractor gives priority to anticipated.
the availability of the outcome in the Cost reduction – quality mesaurs on
longer-term perspective, because the project activities can reduce waste which
project must be profitable. Simply directly lead to the cost reduction. As costs
completing the project by the given due go down, profits may go up.
date and within budget is not sufficient, Productivity increasing – shoddy
because the work must also be of work does not have to be redone so there
acceptable quality. Contractor satisfaction are no need to spend additional fund to
is necessary for success, since the project redo the work.
outcome is transferred to the contractor.

5th IQC May, 20 2011 203

 Better competitiveness – better 4.1 Cost of quality
products, better project performance, and
lower costs translate directly into increased The sources of cost of quality are:
competitiveness. failure, prevention, and appraisal. [8]
Failure costs may result from either
4. PROJECT COST internal or external failure.
Internal failures include scarp and
Project cost management includes rework. The costs of scrap and rework are
processes involved in estimating, more than the sum of lost product and
budgeting, and controlling costs so that the additional work. Costs associated with
project can be completed within the disposal, storage, transportation, and
approved budget. [1] inventory control must be included to
In times of cost control and cost determine total costs.
cutting, the answer to quality improvement External failures occur after a
can be an unwise “can’t afford that.” But product has been delivered to a customer,
improve the quality of a process, can may generate costs for repairs in
reduce the defects that result from that accordance with product warranty and
process. While the new process may be product recalls. This can lead to the loss
more expensive — it may be less of customers which is huge cost.
expensive, too — the resulting reduction Prevention costs begin with planning.
of defects is something that pays back over It is costs which appear before product or
and over. service reach to the customer. Project
Cost management include: estimate managers often skip planing and go direct
costs (approximation of the monetary into performance. Planning generates early
resources needed to complete project costs to be sure, but good planning
activities), determine budget (aggregating prevents later costs that arise from changes
the estimated costs to establish cost to an inadequate product or service.
baseline) and control (monitoring the As costs go down, profits may go up
status of the project and managing changes (depending on the pricing arrangement in
to the cost baseline). the contract on which the project is based)
Costs are important for organization or reduced costs may mean more sales to
and from competitive point of view. an existing customer within existing profit
All organizations keeping and margins.
improving quality and seeking to reduce Appraisal costs begin with inspection
their costs. But this is very difficult to of incoming supplies. The quality of a
achieve in the same time. It is because product is significantly affected by the
quality and costs are related. quality of materials that go into its
For example, if project need to deliver production or project implementation.
some top quality product which have The effects of prevention and
defined characteristics it is necessary to appraisal are simple - better products,
invest a lot in all processes of creating of better processes, more capable workers,
product. Starting with quality idea, quality and more satisfied customers. The big
design, quality materials and everything difference between prevention/appraisal
else need to create top product. costs and failure costs is that failure costs
As can be seen on every stage of are responses that occur repeatedly over
creation for top quality is need for top time. Prevention/appraisal costs are
processes, materials and it costs. investments that provide cost benefits
repeatedly over time.

204 B.Stojčetović, D.Lazarević, B. Prlinčević, D. Stajčić, S. Miletić

5. PROJECT TIME AND QUALITY Poor quality in production leads to
rework. Delivery of poor quality products
leads to replacement, warranty charges,
Project time management include lost customers, and loss of reputation. In
processes required to manage timely the long run, quality saves time and costs.
completion of the project. [1] Attempt to realize project in very
Project time management is based short time can have negative effect on
predominantly on planning, and then it’s quality (low quality) and cost (high cost)
all control and execution. Planning for but and very long realization of project can
project schedules may stem from increase cost and often have no significant
deadlines, customer demands, hard and influence on quality. Prolongation of
soft logic, and a bit of prediction. project can increase risk so it should find
Time management is a often critical perfect balance between time, cost and
for any successful project. The most quality.
common cause of bloated project budgets
is lack of schedule management. 6. CONCLUSION
To determine the time needed for the
project we must first define the time In this paper are presented elements of
required for implementation of each the Iron triangle and their mutual
activity of the project consists of. connection. Quality is what project
Any project can be broken down into contractor desire and not what a project
a number of tasks. To prepare the project manager want.
schedule, the project manager has to figure Summary of this paper can be:
out what the tasks are, how long they will  Iron triangle is the most spread
take, what resources they require, and in concept for measuring project success
what order they should be done. between project managers;
If time is of the essence then quality  Benefits of quality in projects are
or cost should be harmonized. If numerous. Some of them are:
completion of project should be increased customer satisfaction, cost
accelerated then more resources should be reduction, productivity increasing,
used in project and its lead to cost better competitiveness;
increasing. Sometimes changing of time  Top quality demand and higher costs
(schedule) will affect both, cost and and time;
quality. If project must meet specific  Today's popular measures such as
deadline quality could be cut to meet the reducing the cost and time required
accelerated time frame. for implementation of the project
When project duration is compressed leads to a reduction in the quality
there is need for an increase in labor and which can have negative impact on
more productive equipment which lead to customer satisfaction;
the cost increasing. Connection between  Future papers should improve Iron
time and cost is obviously. triangle or to find better concept for
measuring project success.

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8th IQC May, 23 2014 205

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206 B.Stojčetović, D.Lazarević, B. Prlinčević, D. Stajčić, S. Miletić