How can you balance evolving functional requirements with project constraints?

Every project is constrained by its budget, scope and deadline. In My Opinion to Manage the project Constraints by a project manager is by understanding the project possible constraints and plan around them. Create a project plan that strategically avoids the main constraints - scope, timeline and cost within your project. Effective task management and maintaining a control over your project. Stick to the plan an know your Priorities.

Make sure that your change request system has a robust way to differentiate between "problems" and "changes." Is this a request to fix a poor implementation of an existing requirement, or a request to add an entirely new requirement? Having that information will be extremely valuable in both planning and reporting.

Identification of product pillars and clear definition of a product's DNA will help teams identify the vital few requirements that make or break the deal. As functional requirements evolve, teams must trace the effect on the product's DNA and have the ability to translate this into financial impacts. Will these drive volume, product cost, investment capital, R&D investment, etc.? This gives the team the ability to make business conscious decisions while safeguarding the product's value proposition.

This is probably the most important step in the list. Maintaining communication with all stakeholders and change providers is key. Change requests should always be accompanied by an explanation of expected outcome. "Yes, we can implement this change" or "We cannot implement this change" with an explanation of WHY. This facilitates a discussion with project management, giving them the information needed to re-prioritize or modify the project scope, cost, or delivery date.

It's important to establish credibility early in a project, both with developers and the final customer. Allowing scope creep without modifying delivery or cost targets will generally earn the ire of developers. Constantly stiff-arming change requests marks you as an unyielding project partner to the customer. Finding a balance and being able to accurately predict the effects of change requests, or communicate project difficulties, will give you more sway as the project nears completion. This is a critical time for most projects and being able to manage deliverables AND people will really pay off.

Every project I have been in faced this issue. The best way I have seen to keep this in balance was to keep a running list of requests that came up. Reviewing the growing list of asks with the customer and deciding what was “required” and assessing cost/schedule issues with the customer allowed them to buy into what they were asking for. Some changes were trivial and if accepted without formal change became ammunition when changes that did impact cost/schedule came up. If you can point out the 10 things that were done without customer impact then the 11th became much easier to get contractual changes accepted.