What is Project Management?

Project management is the act of planning, organizing, and managing a project in order to achieve a predefined goal or outcome. All types of businesses rely on projects to achieve many of their short-term and long-term goals, because projects are how things get done.

Planning, organizing, and managing a project using visual project management software makes project management easier.
Planning, organizing, and managing a project using visual project management software makes project management easier.

The types of projects organizations undertake depend on several things, including their strategic goals and the industry. For example, a project manager of an advertising agency may oversee an online marketing campaign, while multiple project managers in a healthcare system may be involved in upgrading software.

In today’s fast-paced professional landscape, project management is an essential business tool for organizations of all sizes and industries. But it didn’t become an actual profession until the 1950s, when a surge of large and complex projects created a demand for new approaches to project management that increased efficiency and effectiveness. While the concept of project management has always been practiced, it was done informally until the mid-20th century.

What is a Project?

A project is an undertaking that’s completed with the aim of accomplishing one or more of the following:

  • Reaching a goal
  • Achieving an outcome
  • Creating a deliverable

In other words, a project is the set of tasks or activities completed to achieve specific, predetermined results. On top of that, projects are meant to be temporary endeavors, not recurring activities. They should have a timeline with a defined beginning and end date, as well as a scope and resources allocated to the project. Projects may be large or small, complex or simple. They may take years to complete, or they might be finished within a few days of kickoff.

If project management is a juggling act, then a project manager must always keep these three balls in the air: timing, scope, and resources.

Because projects aren’t meant to be routine operations, it’s common for teams to be cross-functional. People collaborating on a project may have no prior experience working together, and some individuals may even be outside collaborators from other organizations. With more organizations embracing remote and distributed collaboration, more teams are comprised of people across multiple geographies who stay connected through collaborative project management software.

Being able to collaborate in context of the work enables not only remote project management but also better communication with distributed teams.
Being able to collaborate in context of the work enables not only remote project management but also better communication with distributed teams.

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

  • Development of a new drug for a pharmaceuticals company
  • Opening a new store for a retailer
  • Expansion of sales 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 sales to generate revenue.

Also, consider the impact that digital transformation has on an organization’s projects. A Deloitte survey found that 2020 digital transformation budgets are projected to increase by an average of 15% over 2019. The COVID-19 pandemic has caused businesses to invest even more in digital infrastructures to accommodate remote and distributed collaboration, further increasing the strategic importance of IT project management.

The one thing virtually all projects need to be successful is that they must be expertly managed to deliver on-time results within budget.

That, of course, is why the project manager role is so critical.

What is a Project Manager?

The project manager organizes, drives planning, and executes initiatives that help the organization achieve its desired outcomes. While professional project managers often hold certifications in various areas of project management, it’s not required. Anyone can be a project manager by simply:

  • Planning how to reach a goal or objective
  • Building a team to execute the tasks within a project
  • Working to ensure the outcome is reached by the agreed-upon timeframe

The truth is that everyone is a project manager at some point or another, whether they’re overseeing a complex operation or simply taking charge of a small group activity.

Roughly two out of three project managers don’t hold project management certifications.

They are accidental project managers who plan and execute projects, despite not having a formal background in the field.

Aspiring (or accidental) project managers who are interested in getting certified take an exam like the Project Management Professional (PMP) exam. These exams assess project management knowledge and whether the professional can apply that knowledge when planning and executing a project.

According to the PMI, an effective project manager should have a strong understanding of the 10 knowledge areas below when managing projects:

  1. Integration: How a project fits into the bigger organizational picture
  2. Scope: How to create a management plan that defines and controls the scope of a project, so a project manager and the project team stay on task
  3. Time: Managing multiple timelines and schedules in a way that minimizes delays that could undermine a project’s success
  4. Cost: Planning and maintaining a budget throughout the duration of the project, with the aim of minimizing unnecessary expenses and achieving an optimal ROI
  5. Quality: Implementing quality control measures that ensure the same level of quality across all projects
  6. Procurement: How to seamlessly integrate and onboard outside collaborators into projects
  7. Human resources: Understanding team dynamics, the strengths and weaknesses of individuals, and how to utilize teams as effectively as possible
  8. Communications: Maintaining an open channel of communication between teams and project stakeholders so everyone is in the loop
  9. Risk management: How to identify project risks and solve problems that could derail a project from achieving success
  10. Stakeholder management: Identifying the needs and responsibilities of the different stakeholders involved in a project to ensure everyone is always given relevant information

Components of Project Management

As previously mentioned, projects are meant to be temporary in nature. This makes projects different than everyday business activities where people within the same department work towards a common goal or objective.

It’s rare to find fixed teams working on projects. Often, they’re made up of individuals from different backgrounds and with different skill sets.

When team members are selected for projects, they’re usually chosen because of the unique range of skills they bring to the table. As such, good teamwork and collaboration are essential to running a successful project.

An important element of project management is the project team and their stakeholders, all of whom contribute a unique range of skills.
An important element of project management is the project team and their stakeholders, all of whom contribute a unique range of skills.

Why is formal project management used?

Project management is geared towards managing the production of deliverables that create positive change for the organization. This requires strategic planning: Defining the strategic value of the project, estimating required resources, and developing a finite span to complete the endeavor.

The types of projects that demand formal management are those that produce new deliverables or update existing ones. The work and teams involved in these projects tend to be more complex than business-as-usual initiatives, so change management and risk management should be incorporated.

Investing in good project management

Project management is important; without a culture that values it, businesses struggle with meeting deadlines and operating within their budgets. The process of planning and executing complex projects would be chaotic, and there would be little consistency between the quality of deliverables for each project.

Investing in effective project management not only eliminates these problems, it can increase a project manager’s chances of achieving their desired results while helping them stay aligned with stakeholders’ interests.

The core areas of project management

There are three core areas to think about when managing a project:

  1. Scoping
  2. Planning and delivery
  3. Reporting and closure

Each area has several components that are associated with that section of the project.

During scoping, the project manager gathers all the elements needed to kick off the project. This involves:

  • Identifying the reasons why the project is important and presenting those reasons to potential stakeholders
  • Estimating the time and resources necessary to support the project from start to finish, then comparing that with the expected return on investment
  • Securing a budget for the project

For planning and delivery, project managers:

  • Develop a project plan that maps out how the project will be completed
  • Assign tasks to project delivery teams
  • Identify and correct issues like bottlenecks and stoppages that could hinder the performance of the teams involved
  • Ensuring that the progress of the project is aligned with the initial plan
In traditional and hybrid approaches to project management, teams use Gantt charts to plan and track delivery based on milestones.
In traditional and hybrid approaches to project management, teams use Gantt charts to plan and track delivery based on milestones.

The last core area of project management is reporting and closure. Many components of this area are ongoing throughout the project, such as:

  • Managing and reporting the project budget to executive leadership
  • Managing stakeholder expectations through good communication

The last component of this core area (and of the project as a whole) is closure. Once the objectives have been met and it’s appropriate to do so, close the project in a controlled fashion and have a post-mortem meeting – Agile practitioners refer to this meeting as a “retrospective” – to reflect on what went right…and wrong.

What Makes Project Management Different from Other “Management?”

Team leaders, department managers, and project managers all have a similar mission – to help teams reach their goals and objectives. But project management is actually very different from other management activities and requires a different skill set. Every project is different, which requires the project manager to constantly adjust their strategy to accommodate the goals, resources, and schedule that each project demands.

Over the years, organizations began to understand that project management is not the same as other management approaches. This paved the way for project management to become a subject for training and education, and ultimately its very own career path.

Digital workspaces share the key elements of project management - like goals, resources, and schedules – with the entire team and stakeholders.
Digital workspaces share the key elements of project management – like goals, resources, and schedules – with the entire team and stakeholders.

Project Management as a Discipline

As project management grew into its own discipline, so did the philosophy behind it. This led to the founding of organizations like the Project Management Institute (PMI), which seek to standardize elements of project management and create literature that project managers can use to inform their decision-making process.

One of the concepts that came out of this was the project life cycle. The life cycle of a project is broken down into five process groups, and each group represents a series of processes that must occur within that phase. The five phase groups are:

1. Initiating

The initial process group looks at whether a project is valid or not. If the initiative is determined to have value, the project will be formally approved, and a project manager will be assigned to oversee the endeavor. It’s during this phase that key elements of the project are defined, such as:

  • The required resources
  • Stakeholders
  • A cost estimate
  • Risks and dependencies
  • A project timeline

2. Planning

During this phase of project management, an action plan is developed to support your project from start to finish. Everything from the scope of your project, to its budget and important milestones, are determined during the planning phase. This is when teams are assembled and when work is defined through an execution strategy.

3. Executing

This is the process group where most of the action happens. Teams work on their assigned work, while project managers ensure tasks are moving smoothly through the workflow and all parties are collaborating effectively.

4. Monitoring and Controlling

This group is meant to identify and correct potential problems that could jeopardize the success of your project. Some of the processes of this phase include:

  • Measuring progress
  • Monitoring variables like cost and scope
  • Identifying necessary corrective actions to keep the project on track

5. Closing

As the final phase of the project’s life cycle, the closing phase formally concludes the project. This phase usually includes the post-mortem meeting mentioned above, in which teams and leadership can review the project, looking at what went smoothly, what went wrong, and how to avoid making similar mistakes going forward.

Now that we’ve touched on the basics of project management, let’s revisit the all-important role of the project manager.

Project Managers: Leading the Way

Project managers are the individuals responsible for ensuring that projects are completed successfully. In many ways, project managers are the agents of change within an organization. They define the desired goals and outcomes of their projects, then use their skill set to motivate the project team and inspire good collaboration.

Project managers should be able to perform well under pressure. Whereas others may struggle with new challenges, an effective project manager should embrace them and feel comfortable driving business results in an ever-changing professional environment. Part of the necessary skill set for an effective project manager is being able to make the shift between big-picture thinking and detailed-oriented thinking when the situation demands it.

Project management is impossible without an informed team: This virtual workspace functions as a hub that teams can use to stay on track.
Project management is impossible without an informed team: This virtual workspace functions as a hub that teams can use to stay on track.

Project managers also need to be versatile and able to think on their feet. There isn’t a one-size-fits-all approach to managing complex projects with interdependent activities. When problems arise, it’s up to the project manager to take care of them by drawing upon a vast toolkit of techniques for each situation.

Furthermore, good project managers are always expanding their skill set. The final meeting at the end of a project offers the perfect opportunity to look at which project management techniques were effective, and which should be reworked.

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

A study conducted by PMI found the demand for project management is expected to increase by 33% between 2017 and 2027, adding approximately 22 million project manager jobs to the international labor market. Virtually every type of organization has project managers, whether that is their actual job title or they are accidental project managers.

In fact, many people running projects in their organization don’t have any official training in project management. While this sounds like an impossible challenge, many people without formal training in project management or a title related to it successfully manage projects. With software that simplifies processes like project planning and assigning tasks, any team member managing projects will have the support they need to reach organizational goals and objectives.

Project Management Approaches

There are several project management approaches organizations can implement. Below are some popular approaches and methodologies used by project managers.

Traditional project management

One approach is the 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 informed by 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). This a structured project management method and accredited approach which can be used to:

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

PRINCE2 was developed as a U.K. government standard for information systems projects. It 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 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

Agile project management

The next method is Agile project management. This approach often works well for projects in complex, fast-moving environments, because it allows teams to respond flexibly to changing needs and requirements.

Agile project management 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 a project’s next step should be.

Project management is an adaptable discipline. Projects can span from milestone-driven to Agile, even combining Kanban boards with Sprint cadences.
Project management is an adaptable discipline. Projects can span from milestone-driven to Agile, even combining Kanban boards with Sprint cadences.

The main benefit of Agile project management is 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.

Hybrid project management

The hybrid approach combines elements of Agile with traditional project management. This approach lets Agile-ready teams perform iterative work, while also enjoying more autonomy than teams working under a traditional command-and-control project manager.

High-level planning can be done over a timeline with clear start and finish dates to accommodate stakeholders and managers who prefer milestone-driven work. That way, work is completed following the Agile method, but the progress is reported back to stakeholders using Gantt charts and other traditional methods with which they are more familiar.

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 that increases the chances of project success.

Every organization has its own idea of what is and isn’t good practices. In many cases, the notion of “best practices” can even vary depending on the department or business unit. For this reason, the project management mindset should be developed within an organization and should include the necessary steps for reaching your end goal, as well as how to get corporate sponsorship to ensure your project succeeds.

Organizations should consider where the project management function is today and develop goals for 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 their overall success. With efforts like software development so crucial to business operations and revenue, the process of how these products are created is of vital concern. Many organizations struggle with project management.

A global study on project collaboration released by Planview in 2018 showed that about half of the project managers surveyed are unsatisfied with their project visibility, with many experiencing setbacks due to communication issues.

This equates to nearly nine weeks of lost productivity every year.

The study is based on a survey of 650 professionals with experience managing or working on projects. The study shows that on average:

  • 55% of North Americans waste seven hours every week because of poor collaboration
  • 54% of project deadlines aren’t being met
  • 25% of teams aren’t using the same collaborative tools
  • 37% of professionals aren’t using an effective project management solution

Of the project management professionals surveyed, 66% were accidental project managers.

It’s evident that project management has a lot of room to improve. It should never be an afterthought for enterprises; too much is riding on the success of projects.

Leveraging Project Management to Drive Enterprise Agility

One of the top reasons for ensuring there is a strong project management process in place is to enable the organization to drive agility. 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 across the organization. They can understand the status of a project by visualizing processes 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.

Adding a highly visual component to project management, Kanban boards can help teams to identify roadblocks sooner and resolve them faster.
Adding a highly visual component to project management, Kanban boards can help teams to identify roadblocks sooner and resolve them faster.

This enables them to provide the right level of detail to track progress and identify potential problems, no matter the size and complexity of the project.

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 project management 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 software also enables 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, synchronizing planning, and coordinating work across teams to execute Agile development at scale.

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

Project management 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

Bringing it all Together

Project management is an ever-evolving discipline that requires project managers to deliver work on time, within budget, and in scope. Along with a unique skill set and a collaborative mindset, project managers need the right tools to manage teams, as well as tasks.

Whether you’re an accidental project manager or a full-time project manager, try Projectplace for free for 30 days and see for yourself how this project management software can revolutionize the way you manage projects.

Meet our author
Zach McDowell

Director of Product Marketing

Zach is Director of Product Marketing for Planview PPM Pro and Planview ProjectPlace. He has managed teams across three continents at Planview and largely focuses on driving innovation for mid-market project management and PPM. He led one of the largest releases in Projectplace’s 20-year history and continues to grow and support its global user base.