Importance of project management

Introduction

Project management as a management discipline underpins much economic activity. In industries as diverse as pharmaceuticals, software and aerospace, projects drive business. And in the public sector, it is effective project management that translates politicians' promises of new roads, schools and hospitals into gleaming new constructions that improve everyday life. So you'd imagine that it would be possible to place some sort of figure on the importance of project management to the UK economy. How much GDP does it drive? In which sectors of the economy? And as the economy evolves, how fast is project management's prominence increasing?

Think again. As a conversation with the UK's Office of National Statistics reveals, the official Input-Output tables that record and analyse the makeup of economic activity within the UK go into no finer detail than at the level of individual industries. We know that the GDP of the UK economy in 2002 amounted to some £1044bn, up 5% from £994bn the year before. We know which industries contributed the most to that overall GDP figure, and which contributed least. But we know nothing in terms of officially tabulated government statistics - about the extent of project management's contribution to that GDP.

Description

Project management is the most critical business skill and competency of today that forms the basic building block of knowledge based company for businesses and professions in oil and gas, petroleum, petrochemicals, chemicals, metal and mining, infrastructures, buildings, IT, Healthcare, Finance, Telecoms, Manufacturing, and many more services and banking industries. Fortune Magazine calls project management "Career Number 1" on earth. PMI reported recently that nowadays more and more companies and government agencies are adopting and making Project Management a strategic competency.

 The old school thought that the project management knowledge is only applicable to some physical project development is now history. Organizations and companies of today see and understand that knowledge in project management brings about into their businesses ability to plan the cost, time, and resource elements, to implement the plan, and to monitor and control the outcome of a project with much more certainty to achieving their business destiny. Good project management is now perceived an insurance policy in business. It prevents project disasters.

In today's project environment, project managers are challenged to meet the demands of both customers and their own organization management in delivering projects to at least be on time, within budget and within scope. This responsibility cannot rest with the project manager alone. In order to achieve these objectives, all members of the project management team must become aware of and use sound project management practices. Project management team shall therefore equip themselves with project management knowledge and skills that will enable them to support the planning, implementation, and monitoring requirements of the project.

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American researchers employed by the Project Management Institute have an answer - of sorts. On the basis of data released by the Bureau of Economic Analysis, part of the US Department of Commerce, they estimated in 2001 that the US public and private sectors combined spend some $2.3trn on projects every year, an amount equivalent to a quarter of America's GDP. Construction, R&D, software development, organisational change, IT systems - add it all together and that's the price tag. Extrapolating further, they estimated that project-related spending accounted for almost $10trn of the world's global GDP.

On that basis, given the UK GDP of £1044bn in 2002, project-related expenditure of a quarter of GDP yields a GDP figure of £261bn. This, of course, relies on the UK economy being structurally similar enough to the American economy for the American estimate of project management's contribution to GDP to hold true. While there are undoubted differences between the two economies, they are unlikely to be significant enough to materially affect the extrapolated UK figure. A 10% deviation either way, for example, would indicate a range of £235bn to £287bn

There is, however, one slight problem to address when considering project management visà-vis GDP estimates. And it is here that a note of caution must be injected. Take two hypothetical projects, identical in all respects except the caliber of their project management. One project comes in on budget, having used the planned resources. The other dramatically exceeds its budget, using far more resources than planned. Which has the greater contribution to GDP? The latter. Overtime payments, additional employees, replacements for materials wasted or otherwise found faulty perversely, these additional expenditures contribute positively to GDP, not negatively.

As a result, while GDP-based estimates of the value of project management to the UK economy are useful starting points, a more rounded insight into the value of project management to the UK economy must come from more qualitative data.

It’s not a secret that well being of a company is in many ways determined by success or failure of executed projects, so it’s never a wise choice to underestimate an importance of project management. In the article we’ll analyze stages of project management, reasons why project fail and ways how to avoid that.

Overall project life cycle consists of five phases: definition, planning, execution, control and closure. These steps are universal for any project whether you are planning to launch a new product to the market, hire new accountant or through a corporate party.

Definition of the project: On this stage project manager defines the projects and the results that are expected to be achieved.

Planning the project is probably the most challenging part of managing the project, because on this stage all project activities should be defined and deadlines should be fixed for each task. During this phase project manager estimates the budget and decides how many people they need for the execution of the project. Also on this stage risks are being defined and manager analyses what obstacles might interfere with the project.

Executing the project is perhaps, once project is carefully planned and team is build project manager assigns people and allocates the budget to project tasks.

Controlling the project is perhaps the most nerve-racking stage because things seem to never work out the way you planned. Deadlines change, people get on sick leaves, you have to reassign the tasks and it can be quite challenging without proper software that would help you build and rearrange workflows, assign people to tasks, send them notifications and track your project in real-time. With Comin ware Tracker you’ll be able to do all those things without the help of a system administrator. The system is so easily customized to all your needs that you’ll be able to build as many workflows you need with a simple clicks of the button. Having software that allows you to rearrange workflow in the real-time can be crucial for the project because it will allow your team get new information without any delays and work more efficiently.

Closure of the project: During this stage the project results are discussed with the people invested in its outcome.