Every organization undertakes projects. To an organization, a project is essentially an endeavor that is carried out by an individual or a team for the purpose of producing something valuable to benefit the organization in some way. It could be an internal information technology system that increases productivity or a product or service for customers that will make the organization a profit.
Projects are temporary. They have objectives that need to be completed within a set amount of time. Most importantly, projects have limited resources that need to be managed properly in order to achieve success. All this brings us to the concept of project management.
What is Project Management?
Project management is a way of managing and organizing the resources of a project in order to meet all its objectives within a specified amount of time. Every project needs a project manager. This is the person with the skills and knowledge to lead team members and coordinate the resources of the project in order to achieve success.
Basically, a project manager ensures the project is running smoothly. This way, there are fewer headaches for stakeholders – the people the project manager relies on and/or reports to. The stakeholders of a project include senior managers, team members, investors, company owners, end-users, clients, customers, suppliers, contractors and vendors.
Elements of Project Management
For project management to go smoothly, there are four elements that each project manager needs to establish. These are:
- Scope: The scope of a project encompasses everything that is needed to complete the project. This includes the project’s size, objectives, requirements deliverables, milestones, deadlines and costs, among other things.
- Resources: Resources are things the project manager will rely on for the project to be completed. Resources include materials, capital, tools, equipment and the people required during the execution of a project.
- Time: Since projects are temporary or finite in nature, the project manager needs to set a start and end date (duration). On top of establishing that, he or she also needs to arrange the tasks in chronological order, clearly outlining their duration as well.
- Money: When it comes to money there are three considerations. The first one is cost, which can be paying for labor by the hour or buying raw materials. The second one is contingencies, which is money set aside in case costs were underestimated. The third one is profit, which is the amount of money to be made from the project. The project manager’s biggest challenge is to make the company profits while making sure to keep costs down and avoid any contingencies.
Benefits of Project Management
When project management is done right, the organization can experience the following benefits, on top of a project that is completed on time and on a budget:
- Increased customer satisfaction: If the project is being done for a customer, completing it on time and within budget is bound to make the customer happy. It is much easier to turn happy customers into repeat customers (more profits for the organization).
- Increased productivity: Efficiency is something that is at the heart of project management. It is the job of the project manager to create an optimized and structured workflow. This can be documented and reused to speed up future projects.
- Reduced costs: Since project management increases efficiency, resources are used wisely, leading to cost savings and more revenue for the organization.
- Better risk management: A big part of project management is identifying risks and coming up with avoidance or mitigation strategies. This prevents avoidable delays from happening or unavoidable problems from completely derailing the project.
Project management is an essential component of every successful project. If a company hires a savvy project manager, they can experience a range of benefits besides delivering the project on time and on budget. These include increased customer satisfaction, increased productivity, reduced costs and better risk management. Project management is something every organization should take seriously.