Project management. You’ve probably heard these words many times within a business context, or perhaps seen them in a job description or in someone’s title. But what is project management, and why is it important?

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Project management software enables organizations to plan work in a variety of ways.
Project management software enables organizations to plan work in a variety of ways.

These are not trivial questions. All types of businesses rely on projects to achieve many of their short-term and long-term goals. Quite simply, projects are how things get done.

The Project Management Institute (PMI), an organization that supports more than 2.9 million project management professionals worldwide through collaboration, education, and research efforts, defines project management as the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

PMI defines a project as a temporary endeavor undertaken to create a unique product, service, or result. A project is temporary in that it has a defined beginning and end in time, and therefore a defined scope and resources.

A project is unique in that it is not a routine operation, PMI says, but a specific set of operations designed to accomplish a singular goal. As such, a project team often consists of people who don’t usually work together. Sometimes they come from different organizations and across multiple geographies.

Organizations embark on many types of projects, depending on their line of business. For example:

  • Construction of a building, tunnel, or bridge for an engineering firm
  • Development of a new drug for a pharmaceuticals company
  • Opening of a new store for a retailer
  • Expansion of a sales or marketing programs into a new geographic area for a manufacturer

One of the most strategically important types of projects for a growing number of businesses is the development of software, whether it be for internal use to improve processes or for commercial sale to generate revenue.

The one thing virtually all projects need to have in common to be successful is that they must be expertly managed to deliver on-time results within budget. That, of course, is where project management comes in.

Project management has always been practiced informally, PMI notes, but emerged as a distinct profession in the mid-20th century. PMI’s A Guide to the Project Management Body of Knowledge says project management processes fall into five groups:

  1. Initiating
  2. Planning
  3. Executing
  4. Monitoring and Controlling
  5. Closing

The PMI guide states that project management knowledge draws on 10 areas, including:

  1. Integration
  2. Scope
  3. Time
  4. Cost
  5. Quality
  6. Procurement
  7. Human resources
  8. Communications
  9. Risk management
  10. Stakeholder management

“All management is concerned with these,” PMI says. “But project management brings a unique focus shaped by the goals, resources and schedule of each project. The value of that focus is proved by the rapid, worldwide growth of project management” as a recognized and strategic organizational competence, as a subject for training and education, and as a career path.

Core Components of Project Management

The Association for Project Management (APM), a chartered association for the project management profession, notes that “projects are separate from business-as-usual activities, requiring people to come together temporarily to focus on specific project objectives. As a result, effective teamwork is central to successful projects.”

Project management software enables organizations to see all work across workspaces in one place.
Project management software enables organizations to see all work across workspaces in one place.

Project management is concerned with managing discrete packages of work to achieve specific objectives, APM says. The way the work is managed depends upon a variety of factors. “The scale, significance and complexity of the work are obvious factors: Relocating a small office and organizing the Olympics share many basic principles, but offer very different managerial challenges,” APM says.

Project management is essentially aimed at producing a product that will effect some change for the benefit of the organization that instigated the project, APM says. It’s the initiation, planning and control of a range of tasks required to deliver this product.

Projects that require formal management are those that:

  • Produce something new or altered, tangible or intangible
  • Have a finite time span; a definite start and end
  • Are likely to be complex in terms of work or groups involved
  • Require the management of change
  • Require the management of risks

Investments in effective project management will result in many benefits, APM says, such as:

  • Providing a greater likelihood of achieving the desired result
  • Ensuring efficient and best value use of resources
  • Satisfying the needs of the project’s stakeholders

The association identifies several core components of project management:

  • Defining the reason why a project is necessary
  • Capturing project requirements, specifying quality of the deliverables, estimating resources and timescales
  • Preparing a business case to justify the investment
  • Securing corporate agreement and funding
  • Developing and implementing a management plan for the project
  • Leading and motivating the project delivery team
  • Managing the risks, issues and changes on the project
  • Monitoring progress against the plan
  • Managing the project budget
  • Maintaining communications with stakeholders and the project organization
  • Provider management
  • Closing the project in a controlled fashion when appropriate

Project Managers: Leading the Way

One of the key management positions people can aspire to today is project manager. Project managers are the individuals who are responsible for ensuring that projects are completed successfully.

As described by PMI, “project managers are change agents: They make project goals their own and use their skills and expertise to inspire a sense of shared purpose within the project team. They enjoy the organized adrenaline of new challenges and the responsibility of driving business results.”

Project managers must be able to see who is working on what and who is available for additional work.
Project managers must be able to see who is working on what and who is available for additional work.

Project managers need to be able to work well under pressure and be comfortable with change and complexity in dynamic environments. Part of the required skill set is the ability to shift readily between the “big picture” and the small-but-crucial details, knowing when to concentrate on each, PMI says.

These professionals need the people skills to develop trust among team members, and the communication skills to keep all a project’s stakeholders informed about progress or any issues that might arise. The stakeholders might include the project’s sponsors, such as department heads or outside customers who stand to be directly impacted by the project’s results.

Project managers also have a “broad and flexible toolkit of techniques, resolving complex, interdependent activities into tasks and sub-tasks that are documented, monitored and controlled,” PMI says. “They adapt their approach to the context and constraints of each project, knowing that no ‘one size’ can fit all the variety of projects. And they are always improving their own and their teams’ skills through lessons-learned reviews at project completion.”

Virtually every type of organization has project managers, whether they are managers, employees, or third parties such as contractors and independent consultants. Project managers can go on to become program managers who are responsible for multiple related projects, or portfolio managers responsible for selection, prioritization, and alignment of projects and programs with an organization.

Not surprisingly, people with project management skills are increasingly in demand. Expect that to continue as organizations focus more on projects rather than routine operations.

“Today, senior executives and HR managers recognize project management as a strategic competence that is indispensable to business success,” PMI notes. “They know that skilled and credentialed practitioners are among their most valuable resources.”

Project Management Approaches

There are several project management methodologies and approaches organizations can take, according to Mind Tools, a provider of on-demand career and management learning services and tools.

One is Project Management Body Of Knowledge (PMBOK), which centers on common project management skills such as budgeting and managing inputs and outputs.

PMBOK is a set of standard terminology and guidelines for project management. The body of knowledge evolves over time and is presented in “A Guide to the Project Management Body of Knowledge,” a book whose sixth edition was released in 2017. The guide results from work overseen by PMI.

Much of the PMBOK guide is unique to project management, but it also overlaps with general management regarding planning, organizing, staffing, executing, and controlling an organization’s operations. Other management areas that overlap with the PMBOK guide include:

  • Financial forecasting
  • Organizational behavior
  • Management science
  • Budgeting
  • Other planning methods

Another methodology is PRojects IN Controlled Environments (PRINCE2), a structured project management method and accredited approach. According to Mind Tools, this method can be used to:

  • Clarify people’s roles
  • Keep lines of communication open
  • Manage project risk
  • Establish base costs

PRINCE2, which was developed as a U.K. government standard for information systems projects, focuses on dividing projects into manageable and controllable stages. The method is based on seven principles:

  1. Continued Business Justification
  2. Learn from Experience
  3. Defined Roles and Responsibilities
  4. Manage by Stages
  5. Manage by Exception
  6. Focus on Products
  7. Tailor to Suit The Project Environment

PRINCE2 has seven processes:

  1. Starting up a project, in which the project team is appointed
  2. Initiating a project, in which the business case is completed and project initiation documentation is put together
  3. Directing a project, which determines how a project board oversees a project
  4. Controlling a stage, which dictates how each individual stage should be controlled
  5. Managing product delivery, which controls the link between the project manager and team managers
  6. Managing stage boundaries, which dictates how to move from one stage to the next
  7. Closing a project, which covers the formal decommissioning of the project and follow-on actions and evaluation of benefits
Real-time work management lets team members focus on the highest priorities in a streamlined, agile, and interactive environment.
Real-time work management lets team members focus on the highest priorities in a streamlined, agile, and interactive environment.

The third key method is Agile Project Management (APM), an approach that often works well for projects in complex, fast-moving environments because it allows teams to respond flexibly to changing needs and requirements.

APM is an iterative approach to planning and guiding project processes. An Agile project is completed in small sections called iterations.

In Agile software development an iteration refers to a single development cycle, and each iteration is reviewed and critiqued by a project team that often includes representatives of the project’s stakeholders. Insights gleaned from the critique of an iteration help determine what the next step should be in a project.

The main benefit of APM its ability to respond to issues as they arise throughout the course of a project. Making a necessary change to a project at the right time can save resources and help deliver a successful project on time and within budget.

Driving Agility in the Enterprise

One of the top reasons for making sure there is a strong project management process in place is to ensure that the organization can drive agility across groups such as software engineering teams. Project management is what makes it possible for businesses to leverage newer methodologies such as Lean and Agile.

Companies can deploy project management tools to optimize the process of delivering the benefits of Agile software development methods widely in the organization. They can understand the status of a project by visualizing process and the work flowing through it. With components such as Kanban boards, they can gain real-time awareness of the health and state of all project work within and across teams.

This enables them to provide the right level of detail to track progress and identify potential problems, from a single development team and board to hundreds of teams.

Strong project management skills and technologies can help organizations gather insights across teams to identify areas of opportunity for continuous improvement. They can evaluate performance metrics by team, value stream, and portfolio, and define and evolve processes without restricting the way teams work.

Some tools provide powerful reporting and analytics features to:

  • Keep stakeholders informed
  • Provide insights into delivery trends
  • Remove bottlenecks
  • Predict future issues that might arise
  • Adapt workflow processes to improve productivity

Organizations can increase product delivery speed through the implementation of Lean-Agile practices across different teams. This can help drive innovation and encourage experimentation by promoting collaboration and dynamic prioritization. Scrum teams, Kanban teams, and operations teams can identify roadblocks sooner and resolve them faster, and automate delivery with integration into existing development environments.

Project management tools also enable companies to deliver larger, more complex outcomes by coordinating work streams across teams. They can realize value faster by breaking up large-scale initiatives into iterative releases, synchronize planning and coordinate work across teams to execute Agile development at scale.

In short, project management solutions for Lean and Agile delivery enables software development, DevOps, IT operations, and product engineering teams to apply Lean-Agile practices to continuously improve the flow of work. That, in turn, helps them work smarter and deliver products to market faster.

Tools also ensure strategic alignment by synchronizing programs across multiple teams with portfolio-level investments, capacity forecasting, and performance against strategic plans.

Among the key capabilities of software tools for project planning and management are:

  • Process and work visualization
  • Real-time work status
  • Cross-team work connections
  • Work planning and delivery
  • Complex process mapping
  • Visible process policies
  • Contextual work collaboration
  • Lean analytics
  • Flow analytics
  • Agile team analytics
  • Advanced reporting
  • Search and filtering

Project Management Best Practices

There are good ways and bad ways to conduct project management, as with any other discipline. Every organization is unique in how it approaches projects, and it’s not a one-size-fits-all proposition. But some basic practices can help organizations put a strong project management process in place and ensure success with their projects.

Some of the interest in developing project management best practices stems from the economy and the need to do more with less, notes Gina Abudi, principal consultant at Abudi Consulting Group, which provides strategy consulting around projects, processes, people, and technology.

Exactly what a best practice is differs from organization to organization and in many cases from department to department or business unit to business unit, Abudi says. But it’s important to develop a project management mindset within an organization, she says, including the steps necessary to reach the end goal and how to get buy-in from key players within the organization to ensure success.

Here’s a five-step approach suggested by Abudi for developing a project management best practice within an organization:

1. Develop project management roles and competencies

Consider what project management roles exist within the organization, determine what roles and levels of competency are needed, and find out whether certifications are required. Make decisions on roles needed based on factors including:

  • Types of projects
  • Strategic goals
  • Current project management functions within the organization
  • Skills and expertise needed on projects
  • The competition’s organizational structure
  • The long-term strategic goals of the organization

2. Assess staff against those competencies

There’s a variety of methods to assess skills, and the choice of how to assess skills should be based on what works best for the organization and the purpose of the assessment. The assessment might include:

  • Determining strategic training needs
  • Determining project management roles within the organization
  • Determining skills to assign individuals to projects and project teams
  • Gaining a clearer understanding of the skills of project management staff to fill in the gaps
  • Developing career paths for individuals in the project management function

3. Develop strategic training and mentoring plans

Part of the goal should be to develop strategic training and mentoring plans for the project management function. Some training might be to meet short-term goals while others might be for long-term goals.

Regardless, all training programs should include an action planning component so that individuals have a plan to apply what they are learning back on the job with the support of their managers. Training itself will not improve the skills of individuals; the knowledge gained must be applied in practice if it’s going to be effective, Abudi says.

4. Develop a knowledge base and support portal

A knowledge base and/or support portal can be a one-stop location for all project-related information and provide those involved with projects a way to support each other. The knowledge base / support portal might include:

  • Collaboration / information sharing forums
  • Best practices knowledge base
  • Resource library
  • Listing of all organizational project resources
  • Current project information
  • Past project information
  • Access to tools such as project management software
  • Tracking of project status
  • Project schedules and budgets

5. Continue to monitor, assess, and improve

This is an ongoing process to ensure continuous improvement and keep the project management function growing and moving in the right direction, Abudi says. Changes will inevitably occur to meet the needs of the organization, including changes to long-term strategy, mergers, and new product lines. It’s important to determine key performance indicators (KPIs), which might include:

  • Time to market
  • Management of budget
  • Percent of contracted resources used on projects
  • Return on investment of a strategic project

Organizations should think about where the project management function is today and where they want it to be at some point in the future.

Making Project Management a Priority

How well organizations manage their projects can determine how successful the organizations are overall. With efforts such as software development so crucial to business operations and revenue, the process of how these products are created is of vital concern. Many organizations are struggling with project management.

A global report released by PMI in early 2018 showed that about $1 million is wasted every 20 seconds collectively by organizations around the world due to the ineffective implementation of business strategy through poor project management practices.

This equates to roughly $2 trillion dollars wasted a year.

The PMI study is based on a survey of 4,455 project management professionals, 800 project management office (PMO) directors, and 447 executive leaders from a range of industries conducted online in October 2017, and shows that on average:

  • Organizations waste 10% of every dollar due to poor project performance
  • About one in three projects (31%) do not meet their goals
  • 43% of projects are not completed within budget
  • Nearly half (48%) of projects are not completed on time

It’s evident that lots of work is needed to improve things. Project management should never be an afterthought for enterprises. Too much is riding on the success of projects.