Necessity of Project Management

 Need of Project Management

Projects are undertaken to implement strategic decisions taken by the top management. For example:

• A business tycoon takes a strategic decision to enter petroleum refining business. A petrochemical refinery needs to be set up for implementing this decision. This will constitute a project.
• Another business tycoon decides to make a budget car. This is a strategic decision to capture a certain consumer segment. Making of a budget car is a project.
• The government renders a contract to some company for building and running the airport.

Importance of Project Management

If you look at the aforementioned projects, or any such project, the entity that decides to undertake the project needs to invest money and other resources in the project. While they are investing in the project, their target is to generate the returns, much higher as compared to their investment. However, this return can be generated only after the project is completed, and the operations begin. Thus, the duration for which the project is likely to be carried on becomes critical in both aspects --- firstly, for that long, the money needs to be invested, and secondly, this money cannot be recovered till the completion of the project and the beginning of its operation.

To achieve this, the projects need to be managed well. While this is the need of the organization, projects cannot be completed on their own. They need coordinated efforts of all the people involved in it and proper planning. Therefore, it is necessary to adopt project management best practices to deliver results on time.

In the past, when the economy was protected, and not many players were in the market, companies could afford to survive on old products or services for ages. Not long ago, India had only two models of cars, only one player providing telephone service and one player providing air travel. With the expansion of the economy, the competition is increasing leaps and bounds. The organizations need to launch new products and services at a rapid pace, just in order to survive.

The launch of each product or service necessitates the undertaking of a project. Not only that, the survival of the organization depends on the timely launch of the product. This makes the project management a critical success factor for the organization.

PMBOK@ Guide defines project management as "the application of knowledge, skills, tools, and techniques to meet the project requirements".

During the project, the project manager needs to perform multiple project management functions. These functions are divided into five distinct groups, termed as Initiating, Planning, Executing, Monitoring and Controlling, and Closing of the project. Each of these process groups has a specified purpose, which is as follows:

Initiating: During the initiation of the project, a formal go-ahead is given for the project by issuing a project charter. This document is issued by the sponsor of the project and authorizes the project manager to use the resources of the organization.

Planning: Once the project is authorized, the project manager starts planning. He/she needs to:

1. Define the scope of the project.
2. Define the quality specifications for the project.
3. Estimate the schedule of the project.
4. Estimate the cost of the project.
5. Plan what resources will be required for the project and from where those, resources will be acquired.
6. Plan if anything needs to be procured for the project from outside the project organization, and how this procurement will be done.
7. Define the stakeholder management strategies.
8. Define the communication requirements of the stakeholders, and how these requirements will be fulfilled.
9. Define what risks could occur in the project, and if it comes to that, how these risks will be tackled.

The project manager needs to take the integrated view of these aspects of the project, since each one impacts the other. For example, if the project scope changes, the timeline, cost, resource requirements—all of them will change, and hence, need to be re-planned.

For managing the project well, the project manager needs to be well versed in managing these aspects of the project. These are termed as Project Management Knowledge Areas in the PMBOK@ Guide framework and are described in the next section.

Executing: During executing, the project resources are acquired and put to work on the required activities. The project deliverables are created during executing. The team that is working on the project is managed and facilitated by the project manager to ensure smooth work environment and conditions, which will help carry out the project work properly.

Monitoring and Controlling: The project manager needs to continuously monitor the work and ensure that everything is happening as per the plan. If something does not go as per the plan, he/she takes corrective or preventive actions.

Closing: Once the project work is completed, the final product or result of the project is required to be handed over to the operations formally. During this period, the contracts are closed, and team is disbanded.