Managing Expectation – The Iron Triangle

Dear Clients,

I am writing this post to introduce you to Iron Triangle thing.

When hiring us, your main consideration is that you cannot do the design and construction by yourself. Even if you can, it might be more difficult rather than hire a specialist and leave the problems with them.

However, on hiring, you will also have tendency to maximize the outcome and minimize the cost. You will often choose that contractors that can deliver you a product which can minimize your cost, on your desired high quality, and finished as soon as possible.

Our dear clients,

If one day you met the contractors which promised you all of that criteria with high confidence, our advise is; please do not hire them because they absolutely lying.

Our products are basically the outcome of a project; something unique and different than other produces. It is basically a product that fully customized for you. The project is basically an art to balance three basic questions:

What product would be created ? – to answer the question, we describe the scope of works.

How long before the product can be delivered ? – to answer the question, we create the time line.

How much cost will be occurred to finish the product ? – to answer the question, we create the cost plan.

Iron Triangle

Here is the thing : these scope of works, time line, and cost plan are interlinked. Changes to one of these aspect will affect to the other two. The Scope, Time, and Cost is what we called the Iron Triangle.

When handling with Iron Triangle, the clients will be asked to choose two from those three aspects which really important to them. After choosing two, the third aspects will be sacrificed.

The practical example would be like this:

Supposed that you hire us to do a renovation project. You want to use your new home in 6 months. You only have 500 millions Rupiah that you would spend for the project. Then you must make sacrifice in your scope of works. Every contractors you asked will can give you a home which valued 500 millions that can be created in 6 months. Let’s say that you will only get A,B,C,D while what you want is A,B,C,D,E

Please be advised that if a contractor promised to give you a home with top brand A,B,C,D,E with same requirements while other contractors cannot, you will likely ended with cost escalation or extension of time in which case, you might not finish your home as you desire.

Dear clients,

With the Iron Triangle still presents even after you hired us, you might asked why do you need to hire us?

There are two legitimate answer for the question.

First, you hire contractors to optimize the Iron Triangle to your need. If you hire simple foremen to do works under your supervision, they will use the Iron Triangle as it is. Give them two out of three requirements and they will fully sacrifice the third one. Give them all three requirements and you might pray on what product will be produced and which aspect would be sacrificed. In our first meetings, we will always introduce you the Iron Triangle, directly or indirectly. When we are conducting conversation, we want to find out, what is the priority of those three aspects and how is the gap between them. Then we will find out together,

In previous case, we would ask you whether your projects really has to finished by the sixth month. We would inquire your future plan, and find a way to synergy it with the whole plan. Maybe we can overlap your plan with our plan? We would asked you each about about your A,B,C,D,E scope requirement. Which one is your priority? Which one can be sacrifice in the specification? Can scope D and E use a second class brand because you only require their practicality on their aesthetic?

Second, you hire contractors to minimize your risks. Managing the Iron Triangle require a combination of technical and project management skill and of course a large, intensive amount of time. If you really have those three, you might not want to hire contractors in the first place.

So our Dear Clients,

As a conclusion, in your projects, Iron Triangle problems will always exists. If you reached a condition when you do not have skills or enough time to do the projects by yourself and need assistance from contractors, please remember that the contractors are also there to handle the Iron Triangle so it is optimized and aligned to your need NOT to minimize the Iron Triangle.

Warm Regards,

The Sunggiardi Construction Team

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