So, it is not surprising to see that the project performance is largely measured by making integrated measures of scope, schedule, and cost and comparing them to the scope, schedule, and cost baselines. Cost and time are the underlying fundamental parameters that determine budget and schedule, respectively. So, the three fundamental parameters that we are talking about here are scope, time, and cost.
Why are these 3 factors so important?
You can understand the answer by trying to answer the below questions based on the scenario:
Scenario: You are the CEO of a Bank and as a strategic business plan, you want an online banking website for all your customers which you intend to roll-out by Jan 2012. Your Board of Directors has allocated a 10 million USD budget for the same and you identified some XYZ Software company and given them this project. Now…
1. XYZ Company has not finished the website and it is December 2011 already and based on the state of things, it looks like you are not going to meet the Jan 2012 cut that your Board of Directors wanted. Will you be happy? (SCHEDULE)
2. XYZ Company has finished the website but, your UAT team is unable to use the website properly. Funds transfer doesn't happen at times, certain type of account information isn’t visible, bill payments feature has totally been forgotten. Though the website can go live in Jan 2012, many of the features are not fully ready. Will you be happy? (SCOPE)
3. XYZ Company is making good progress on your website. It is September and they have already utilized 8 million dollars and it looks like they might need 2 million more in order to meet the go-live in Jan 2012. Will you be happy? (COST/BUDGET)
I am sure that, if you were the CEO, you will be grossly unhappy in any of the 3 situations.
This is how important these 3 factors Schedule, Scope & Budget are and that is why they are called the Golden Triangle.
Since the success of the project is tightly coupled with these 3 factors, it is extremely important that you monitor them efficiently. This is what we are going to learn in the next few chapters.
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