Project management – what it is exactly?

Project management – it is an unique process which consists of a group of activities coordinated and managed, which have a beginning and the end; it is launched to achieve a goal in the conformity with specific requirements like a deadline, cost and resources.

It can be also defined as an unique effort employing specific means: human, material or services to reach a defined objective in the fixed time frame. It is a specific action allowing to structure methodically and assuring the progress of the coming reality.

Project management is the approach to get the job done, on time , according to the specifications and in the defined budget. The primary focus of project management is on results.

The project is governed by the 3 variables: quality, time and cost, all three of them are related to the project objective/scope. Modification of one of the components affects the remaining ones.

Every project has 4 key factors of success:

1. Awareness of the company realizing the project about importance of challenges to overcome

2. Proven methodologies – long term advantages of change management

3. The better the competences the better the outcome – all involved co-workers should be up to date

4. Knowledge to invest in the strategy: clear vision and communication concerning competences and change management

 

Phases of a project

project phases

Every project consists of 5 phases:

1. Project initiation (pre-project phase) – where following questions should be answered: Where do we go? What will we do? Why?

2. Project conception and planning (requirements definition and planning)  – basically answer to one question: How? Further questions posed here are: When? By use of which means (human, material, technical)?

3. Project execution  – work according to the plan

4. Performance monitoring and cost control – a constant supervision of cost and KPIs

5. Project closeout – where a balance of work done is established, together with lessons learned.

 

Project initiation (pre-project phase)

This is an exploratory phase, where following points must be cleared:

  • current situation: an inventory of existing solutions needs to be made
  • problematic analysis
  • proposals of solutions
  • definition of the purpose:
    • objectives
    • intermittent goals
    • scope
  • exploration of the environment: strategy, market conditions, technicality, economic conditions, evaluation of risks
  • refinement of the purpose

At the project initiation phase it is necessary to establish a document connecting the customer and the service provider including all the specifications of the project and the project plan from its initiation to the closeout. In this phase are set hypotheses of objectives and deliverables.

 

Strategy

 

Needs to define: purpose, objectives, goals and scope.

Purpose is usually a short sentence of 1-3 phrases defining what the execution of the project will change. It defines what the project will bring to the organization.

Objectives go deeper in the matter  and define particular changes in the current state, before the project is launched. Define what has to be delivered at the completion of the project. Objectives should be SMART

Goals define the milestones of the project, with precise dates of completion. Goals are deliverables, and can be easily questioned: “Was this delivered or not?”. They are specific, time-bound, the have a proper budget and defined quality. Goals are result of activities (sequences of actions).  There is possible to have several goals for one objective.

Scope defines what will be included in the scope of the project and what will not.

 

Order

 

A contract linking the customer and the service provider. Should include:

  • name of the project
  • sponsor and/or client of the project
  • service provider
  • problematic and background
  • identification of risks
  • definition of the project: its purpose, objectives, goals (in therms of quality and quantity) and scope
  • constraints and guidelines
  • identified stakeholders
  • success factors and recommendations

Analysis of the environment

 

This phase includes a feasibility study, project marketing and analysis of needs. Crucial is to have a good knowledge of the market situation (competitive intelligence), be sure that provided answers are corresponding to the needs, and assure that there are marketing strategies allowing the solutions meet the needs. Here can be used techniques of Delphi, 6 hats of Bono, statistics, press information, internet, PESTEL.

PESTEL

 

Analysis of environments:

  • Political
  • Economic
  • Social
  • Technological
  • Ecologic
  • Legal

Its objective is to diminish uncertainty, establish forces governing the market, its participants and current tendencies.

 

Project’s SWOT

 

Analysis of strengths and weaknesses of the project on the internal level and the opportunities and threats coming from external environment.

Here are answered following questions:

  • how the strengths of the company can be used to catch the opportunities coming from the external environment?
  • how the strengths of the company can be used to reduce or eliminate threats?
  • can the threats be transformed in opportunities?
  • can the company use opportunities to diminish its weak points?
  • can the opportunities be used to develop new competences?
  • is the restructuring possible to avoid threats?
  • should the company consider exiting this particular market?

Processes

 

Process is a chain of coordinated activities. Consists if an input (which in the case of a project is reception of order), followed by the activity boxes, decision knots and finishing by an output. Often includes criticality analysis, list of risks, disposition or plan B (and its cost).

 

Stakeholders

 

Stakeholders are all people involved in the project; either being affected by the project or having a positive or negative impact on the project.

There are two types of stakeholders:

Internal:

  • sponsor of the project
  • management: executive management, local management, heads of departments
  • functions in particular departments: marketing, distribution, research, development, sale, organization, informatics…
  • unions representing employees
  • internal suppliers and service providers, internal customers
  • staff and management of the areas concerned
  • other projects and working groups concerned

External:

  • banks and insurance companies
  • consultants, experts and outside specialists
  • external suppliers, subcontractors and customers
  • competitors and partners on the market
  • neighbors
  • decisive parties: government, parliament, commissions, other local instances
  • personnel of administration and authorities
  • lobby associations

Stakeholders should be identified according to the following criterion:

  • Which stakeholder is it? Name / title
  • What are his areas of interest?
  • What are his expectations ?
  • What is his influence?
  • What role should be assigned to him?
  • What strategy do we adopt vis-à-vis this stakeholder?
  • Who is in charge of managing this stakeholder?

And there is a need to establish a communication plan defining, who needs information, when, how the information has to be transmitted and who transfers the message.

 

Roles’ attribution

Sponsor: a person  who is a symbol of a project, who brings the project to the company, supports its development, takes action in the moment of reluctance; needs to receive the report about the project development after its closeout.

Steering committee: consists all the people concerned by the project who have decisive power (time, cost, quality).

Client: either client in person, or his representative. Available for follow up with the project.

Project management: applicant and maker

Project manager: manages the project

Project team: specialists working to create the product. Work closely with the project manager.

Consultation group: enlightened users

Advisory group: technical experts, internal and external

Legislative powers: check if appropriate law has been applied

 

Decisive power

Strategic committee is composed of the members of executive management. It represents the managements for all the projects and integrates its decisions in the general politics of the company and the strategy in the areas of investment, technology, social, real estate…

The committee selects the projects, takes decisions concerning policies, allocates budget, validates results, reports problems to the executive management, reports the progress of projects. Can prioritize or cancel the project, without justification.

Steering committee: consists of  operational managers. It represents strategic committee for a specific project and follows project realization from the project kick off till its closeout. It nominates project manager, validates progress of work, transmits issues to the strategic committee and reports to the strategic committee. It has not only a decisive power, but also a facilitating power.

Project manager: attached to the project either full time or part-time, for the entire length of the project.

  • defines principal directions of the project and participates in the pre-project phase
  • constitutes the project team
  • evaluates risks and manages them all the time
  • attributes work to be done
  • follows the work progress
  • formalizes documents (intermediary and final)
  • manages conflicts in the team
  • follows budget and deadlines
  • transmits decision to the steering committee
  • reports project progress to the steering committee

Project conception and planning (requirements definition and planning)

One of the most important thing in project management is evaluation of risks.

Failure: difference between the possible behavior (observed) and the specified behavior (nominal) = the cause, the problem

Evaluation of risk is done on 4 levels:

  • criticality: calculated from the following 3 factors; average is 125 (5x5x5), maximal 1000 (10x10x10)
  • occurence: estimated according to the scale: no (impossible 1, almost impossible 2, very improbable 3), maybe (improbable 4, implausible 5, plausible 6, probable 7), yes (very probable 8, almost-sure 9, sure 10)
  • detectability: estimated according to the scale yes (immediately 1, easily 2, quite easily 3), maybe (probably 4, presumably 5, eventually 6, with difficulty 7), no (unlikely controllable 8, improbable management 9, management impossible 10)
  • seriousness: estimated according to the scale of consequences: minor (close to zero 1, barely sensed 2, very limited 3), average (limited 4, sensed 5, significant 6, very significant 7), major (important 8, disastrous 9, catastrophic 10)

To mitigate the risk a project manager should elaborate a disposition (supplementary action) in the project plan or a different way of project management. This disposition should be developed before launching the project. The disposition should diminish the criticality, make the happening less probable and allows to act immediately if the risk arrives. Usually the disposition involves additional costs.

There is a possibility of development of plan B (or contingency plan), which is developed after the manifestation of risk or in the moment of manifestation of risk. Usually involves additional costs.

Economic conditions

For the company means to maximize profits, for an organization – render the best service for the best price. Economic conditions assure the viability of the project. That means that a company or organization will spend on the project (in terms of human resources, financial means…) will be lower than benefice expected.

Calculation of ROI: (Earnings-Costs)/Costs

Break-even cost: a value of production to achieve zero benefit.

Dead point: the amount of time the company achieves the break-even point.

 

Project plan

 

Developed in the phase of pre-project. It is a reference for all stakeholders. With time it gets more detailed involving the flow, organization, chosen solutions, necessary resources, deliverables, cost follow-up, deadlines, quality, modifications, risks.

It serves to guide the execution of the project, formulate hypotheses for planning, explore different scenarios, facilitate communication among stakeholders, plan the reviews of the project, measure project’s progress. It contains: purpose, goals, objectives and scope, constraints (techniques, financial, material-related, temporary, legal…), risks and opportunities, planning, global budget, lexicon and abbreviations and reference documents).

It contains as well the human organization of the project: project manager, project team, external and internal stakeholders, table of roles and responsibilities.

In the matter of the project flow the project pan contains: general outline of the project, conditions of initialization and start, conditions of closeout of particular phases.

In the matter of finances and budget,  the project plan has to contain: sources and modalities of financing, financial justification of the project (project cost, cost of exploitation and ROI), budgetary structure (persons employed at the project, investments, acquisitions, financial costs), accounting methods and accounting annexes.

In the matter of technical processes, it outlines methods, norms, techniques and tools, as well as necessary infrastructure. It includes criterion of the product acceptation and technological and methodological annexes.

The project follow up includes a communication plan, periodic reports of progress (in terms of project team, deadlines, costs, deliverables and productivity), follow up on risks and incidents and the external and internal modifications.

In the support process the project plan contains:  management of modifications, technique of validation of results, documentation of the project, support of changes, quality assurance and process improvement, management of sub-contractors and contracts’ administration, formation and coaching.

 

Kick-off meeting

 

After initial phase of brainstorming and exploratory phase the solutions have been downsized to analytic and rational, with wight criterions and logic. It has been defined:

  • project needs and areas of competences
  • level of competences required in every area, according to the complexity of tasks
  • capacity to work in team
  • availability of resources
  • level of engagement in the project
  • leverage – position in the company, leadership…

During the kick-off meeting the team should be presented, together with the explanation of the roles and responsibilities, as well as the communication. Following that the team should revise goals and objectives of the project, check the order and outlines, review problematic spots for the new