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Home > Departments > Methods & Means
In part three of our Managing Project Value series, a consideration of the five key ways a project’s duration can affect ROI leads naturally into a simplified formula for tracking your initiative’s most important metric of all — profitability — from start to finish.
This is the third article in a series exploring, summarizing and expanding on the specific techniques, metrics and implications of a methodology called Total Project Control (TPC), which focuses on managing and demonstrating project value.
In the first article in this series — “The Value-Abled Project” — we laid the groundwork for why it is critically important to recognize that every project is an investment, and to treat each one as such. The prime metric in any investment is the expected profit, or the difference between the amount to be invested (cost) and the expected monetary value (EMV) to be generated. The second article — “Moneyproject” — focused on how the three sides of the well-known triple constraint triangle (shown in Figure 1 below) can each be quantified in terms of their contribution to the expected project profit.
 Figure 1: The TPC Quantified Triple Constraint Triangle
In that second article, we showed how, with all three sides of the triangle monetized, we can measure project performance in an integrated fashion as project profit and project profitability, and introduced two formulas:
1) Expected project profit = $EMV ± $acceleration premium/delay cost – $cost
2) Expected profitability = ($EMV ± $acceleration premium/delay cost)/$cost
We also discussed ways of assessing the expected value of scope in terms of the product and project.
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