The Importance of Balancing Time, Scope, Budget, and Team Efficiency in Project Management

Efficiency is in human nature as we strive to complete our tasks as fast as possible. That's why, if there is a solution that could save us time to do something more meaningful, we will take it.

However, when optimizing their processes, many companies focus only on 3 project dimensions - scope, time, and budget. Productivity and efficiency are often left aside, which can cause problems (or missed opportunities).

What Is 3-Dimensional vs. 4-Dimensional Project Management?

When it comes to project management, there are many discussions on how processes should be optimized in the best way. As we have already mentioned, most organizations focus on scope, time, and budget. This is known as the three-dimensional approach to project management, which, in my opinion, can be ineffective. Imagine that you have a large project to work on.

• The first thing that you do is to determine the scope of your project.
• After that, you set specific deadlines and milestones that need to be followed.
• At last, you delegate a budget and start assigning tasks.

All of this is great; however, you are not considering your team's efficiency across all these steps. Even if your planning process is perfect, having low productivity and efficiency levels across your team members might lead your project to a catastrophic outcome.

A solution to this problem is embedding team efficiency as a fourth project dimension. Keep reading below to find out how to convert the traditional three-dimensional approach to four-dimensional project management.

What Is Flow Efficiency?

In the three-dimensional approach, the scope usually represents a huge task that needs to be broken down into smaller pieces. The idea is to make the individual tasks as small as possible so you can complete them easily one by one. Once this is done, you will know how much time and resources you will need to finish the work.

The fourth project dimension would strive to present your work as a flow. Breaking down a big initiative into projects is not enough if your team's efficiency is low due to an unstable workflow. That's why you need to optimize your team's flow efficiency.

Flow Efficiency[%]=Active Time/Lead Time*100

This can be done by separating the active (value-adding) time from the lead time. The former represents the time during which someone is working towards completing a goal, while the latter is the period between the order and delivery of the product.

Once you combine this with visualizing your workflow through a Kanban board, for example, you will be able to separate the value-adding from the wasteful activities.  This will allow you to optimize your work process and deliver high-quality products to the end customer in a predictable manner.

Focus on Predictability Instead of Estimations

Time is of crucial importance for every single project. That's why it is often being converted into deadlines, milestones, and monthly targets that have to be reached. However, these are often based on rough estimations. Unfortunately, the word estimations often occur in the project management dictionary.  And if you allow me, according to the dictionary.cambridge.org, the meaning of the word is:

"Estimation - your opinion of someone or something."

Here is the problem. Estimations are based on someone's opinion. And opinions may be very subjective and elastic.

This can cause project management problems because, in reality, deadlines are often being missed and milestones unachieved. As a result, delayed deliveries occur, which can be catastrophic to any project. And all this because of someone's opinion.

In the four-dimensional project management model, what matters most is the actual data. Data that can help you measure performance and, eventually, team efficiency.  The idea here is not to set deadlines blindly but to track how fast your team can produce a specific product. In Lean and Agile management, you can do this by measuring cycle time and lead time.

At the end of the day, both ways will produce results; however, the four-dimensional approach will place a bigger focus on the productivity and efficiency of your team. This way, you will be able to forecast better what time is needed to deliver a product and create superior value for your customers.

Why You Should Use Pull Approach to Improve Team Efficiency?

The traditional approach to project management focuses on constantly pushing work into your colleague's hands. This is done so nobody on your team remains idle and is always in top delivery mode.

A push strategy is based on anticipated demand, which can fail to correspond with the actual demand. Even more, while pushing work, you may overburden your team, which creates piles of work. Respectively average cycle time multiplies, and tasks are getting slower.

With the four-dimensional approach, tasks are no longer being pushed. Instead, they are being pulled and distributed by the team members.

A pull system suggests that the team members pull work when there is a free capacity. In other words - a work item has to be in progress only if there is a demand for it and available capacity. 

As you may know, in Kanban, capacity is regulated by applying work-in-progress limits that prevent the system from overloading. However, this is a deep topic that will need another 1000 words, so let's proceed.

At the end of the day, Kanban pull systems allow teams to be in charge of their own processes, which will boost their productivity and efficiency. Respectively, team members will no longer execute work only when somebody is supervising them. Instead, they will be responsible for the tasks that they are working on. This also has the power to boost their engagement in the workplace.

Team Efficiency Tip 1: Visualize Your Workflow

Visualization is an invaluable weapon for managing a team. Especially in a dynamic environment such as knowledge work because when you visualize all assignments, it is less likely to accumulate humongous amounts of started but unfinished work.

There are hundreds of ways and tools available for work management, but if you have been working only with personal To-Do lists to this moment, I suggest you start with something simple like a Kanban board.

It is quite easy to use. You just dedicate any kind of vertical flat surface (e.g., whiteboard, wall, window, etc.) for the purpose and draw a few horizontal lines for the different stages of your process.

For example, you can start with a basic layout consisting of just three columns: To Do, In Progress, and Done. Then, you put all tasks and their assignees on cards across the board depending on their state of completion. When the status is updated, you replicate it on the Kanban board.

It will be more than enough to make it transparent how many things each person on your team has in progress and how busy they really are.

Of course, the more detailed you draw your board, the more comprehensive visualization you will get. Still, keep in mind that you shouldn't overwhelm your board with too many work stages (columns) because they may turn out to be a waste. Here comes one of the benefits of having a digital Kanban board.

For example, with a board in Kanbanize, you will not only be able to map the entirety of your process but also analyze the value-added and non-value-added activities within it. This can help you determine whether certain stages are necessary or they add an additional overhead to your workflow. 

Team Efficiency Tip 2: Limit Work in Progress (WIP)

Limiting your work in progress (WIP) will allow you to optimize your capacity and find the right balance between resource efficiency and flow efficiency. The logic is quite simple, really. You place a limit to the total amount of work items that can be in progress simultaneously and forbid starting new work until there are available slots for more tasks.

According to Little's Law, by reducing the amount of work in progress while maintaining your average completion rate of assignments, you will be able to reduce lead times and, therefore, improve your flow efficiency.

Little's Law: Throughput = Work in Progress / Cycle time 

In other words: Completed Tasks  = Number of Tasks in Progress / The Time for Processing These Tasks

Depending on how strict limits you place, your process will become more optimized for either resource efficiency or flow efficiency.

For example, if you allow each team member to have just one task in progress, they won't be able to start new work until their current assignment is done and therefore, they might have plenty of unused capacity while waiting for review by other stakeholders or customers.

On the other hand, if you put very liberate WIP limits that allow team members to work on multiple tasks at once, they will surely be busy all the time, but the flow efficiency will suffer as a result.

Why You Need to Focus on Team Efficiency?

Team efficiency can help you predict whether products will be successfully delivered to the end customer on time. That's why focusing only on the three project dimensions - scope, time, and budget might turn out to be ineffective. Try the four-dimensional approach to project management and increase levels of productivity and efficiency within your entire organization.