Project Management

Understanding Project Management

In order to understand project management, one must begin with the definition of a project. A project can be considered to be any series of activities and tasks that:

• Have a specific objective to be completed within certain specifications
• Have defined start and end dates
• Have funding limits (if applicable)
• Consume human and nonhuman resources (i.e. money, people, equipment)
• Be multifunctional (i.e. cut across several functional lines)

Project management, on the other hand, involves project planning and project monitoring and includes such items as:

Project planning

• Definition of work requirements
• Definition of quantity and quality of work
• Definition of resources needed

Project monitoring

• Tracking progress
• Comparing actual outcome to predicted outcome
• Analyzing impact
• Making adjustments

Successful project management can then be defined as having achieved the project objectives:

• Within time
• Within cost
• At the desired performance/technology level
• While utilizing the assigned resources effectively and efficiently
• Accepted by the customer

The potential benefits from project management are:

• Identification of functional responsibilities to ensure that all activities are accounted for, regardless of personnel turnover
• Minimizing the need for continuous reporting
• Identification of time limits for scheduling
• Identification of a methodology for trade-off analysis
• Measurement of accomplishment against plans
• Early identification of problems so that corrective action may follow
• Improved estimating capability for future planning
• Knowing when objectives cannot be met or will be exceeded

Unfortunately, the benefits cannot be achieved without overcoming obstacles such as:

• Project complexity
• Customer’s special requirements and scope changes
• Organizational restructuring
• Project risks
• Changes in technology
• Forward planning and pricing

Project management can mean different things to different people. Quite often, people misunderstand the concept because they have ongoing projects within their company and feel that they are using project management to control these activities. In such a case, the following might be considered an appropriate definition:

" Project management is the art of creating the illusion that any outcome is the result of a series of predetermined, deliberate acts when, in fact, it was dumb luck."

Although this might be the way that some companies are running projects, this is not project management. Project management is designed to make better use of existing resources by getting work to flow horizontally as well as vertically within the company. This approach does not really destroy the vertical, bureaucratic flow of work but simply requires that line organizations talk to one another horizontally so work will be accomplished more smoothly throughout the organization. The vertical flow of work is still the responsibility of the line managers. The horizontal flow of work is the responsibility of the project managers, and their primary effort is to communicate and coordinate activities horizontally between the line organizations.

The following would be an overview definition of project management:

Project management is the planning, organizing, directing, and controlling of company resources for a relatively short-term objective that has been establishes to complete specific goals and objectives. Furthermore, project management utilizes the systems approach to management by having functional personnel (the vertical hierarchy) assigned to a specific project (the horizontal hierarchy).

The above definition requires further comment. Classical management is usually considered to have five functions or principles:

• Planning
• Organizing
• Staffing
• Controlling
• Directing

In the above definition, the staffing function has been omitted. This was intentional because the project manager does not staff the project. Staffing is a line responsibility. The project manager has the right to request specific resources, but the final decision of what resources will be committed rests with the line managers.

We should also comment on what is meant by a “relatively” short-term project. Not all industries have the same definition for a short-term project. In engineering, the project might be for six months or two years; in construction, three to five years; in nuclear components, ten years; and in insurance, two weeks. Long-term projects, which consume resources full-time, are usually set up as a separate division (if large enough) or simply as a line organization.

Project management is designed to manage or control company resources on a given activity, within time, within cost, and within performance. Time, cost, and performance are the constraints on the project. If the project is to be accomplished for an outside customer, then the project has a fourth constraint: good customer relations. The reader should immediately realize that it is possible to manage a project internally within time, cost and performance and then alienate the customer to such a degree that no further business will be forthcoming. Executives often select project managers based on who the customer is and what kind of customer relations will be necessary.

Defining Project Success

We defined project success as the completion of an activity within the constraints of time, cost, and performance. This was the definition that has pertained for the past twenty years or so. Today, the definition of project success has been modified to include completion:

• Within the allocated time period
• Within the budgeted cost
• At the proper performance or specification level
• With acceptance by the customer/user
• When you can use the customer’s name as a reference
• With minimum or mutually agreed upon scope changes
• Without disturbing the main work flow of the organization
• Without changing the corporate culture

Very few projects are completed within the original scope of the project. Scope changes are inevitable and have the potential to destroy not only the morale on a project, but the entire project itself. Scope changes must be held to a minimum and those that are required must be approved by both the project manager and the customer/user.

Project managers must be willing to manage (and make concessions/tradeoffs, if necessary) such that the company’s main work flow is not altered. Most project managers view themselves as self-employed entrepreneurs after project go-ahead, and would like to divorce their project form the operations of the parent organization. This is not always possible. The project manager must be willing to manage within the guidelines, policies, procedures, rules, and directives of the parent organization.

All corporations have corporate cultures, and even though each project may be inherently different, the project manager should not expect his assigned personnel to deviate from cultural norms. If the company has a cultural standard of openness and honesty when dealing with customers, then this cultural value should remain in place for all projects, regardless of which the customer/user is or how strong the project manager’s desire for success is.

As a final note, it should be understood that simply because a project is a success does not mean that the company as a whole is successful in its project management endeavors. Excellence in project management is defined as a continuous stream of successfully managed projects. Any project can be driven to success through formal authority and strong executive meddling. But in order for a continuous stream of successful projects to occur, there must exist a strong corporate commitment to project management, and this commitment must be visible.