Importance of Project Management is an important topic because all organizations, be they small or large, at one time or other, are involved in implementing new undertakings. These undertakings may be diverse, such as, the development of a new product or service; the establishment of a new production line in a manufacturing enterprise; a public relations promotion campaign; or a major building program.
While the 1980′s were about quality and the 1990′s were all about globalization, the 2000′s are about velocity. That is, to keep ahead of their competitors, organizations are continually faced with the development of complex products, services and processes with very short time-to-market windows combined with the need for cross-functional expertise. In this scenario, project management becomes a very important and powerful tool in the hands of organizations that understand its use and have the competencies to apply it.
The development of project management capabilities in organizations, simultaneously with the application of information management systems, allow enterprise teams to work in partnership in defining plans and managing take-to-market projects by synchronizing team-oriented tasks, schedules, and resource allocations. This allows cross-functional teams to create and share project information.
However, this is not sufficient, information management systems have the potential to allow project management practices to take place in a real-time environment. As a consequence of this potential project management proficiency, locally, nationally or globally dispersed users are able to concurrently view and interact with the same updated project information immediately, including project schedules, threaded discussions, and other relevant documentation. In this scenario the term dispersed user takes on a wider meaning. It not only includes the cross-functional management teams but also experts drawn from the organisation’s supply chain, and business partners.
On a macro level organizations are motivated to implement project management techniques to ensure that their undertakings (small or major) are delivered on time, within the cost budget and to the stipulated quality.
On a micro level, project management combined with an appropriate information management system has the objectives of: (a) reducing project overhead costs; (b) customising the project workplace to fit the operational style of the project teams and respective team members; (c) proactively informing the executive management strata of the strategic projects on a real-time basis; (d) ensuring that project team members share accurate, meaningful and timely project documents; and (e) ensuring that critical task deadlines are met.
While the motivation and objectives to apply project management in organizations is commendable, they do not assure project success.
Project management has been practiced for thousands of years dating back to the Egyptian epoch, but it was in the mid-1950′s that organizations commenced applying formal project management tools and techniques to complex projects. Modern project management methods had their origins in two parallel but different problems of planning and control in projects in the United States.
The first case involved the U.S Navy which at that time was concerned with the control of contracts for its Polaris Missile project. These contracts consisted of research, development work and manufacturing of parts that were unique and had never been previously undertaken.
This particular project was characterised by high uncertainty, since neither cost nor time could be accurately estimated. Hence, completion times were based on probabilities. Time estimates were based on optimistic, pessimistic and most likely. These three time scenarios were mathematically assessed to determine the probable completion date. This procedure was called program evaluation review technique (PERT).
Initially, the PERT technique did not take into consideration cost. However, the cost feature was later included using the same estimating approach as with time. Due to the three estimation scenarios, PERT was found (and still is) to be best suited for projects with a high degree of uncertainty reflecting their level of uniqueness.
The second case, involved the private sector, namely, E.I du Pont de Nemours Company, which had undertaken to construct major chemical plants in U.S. Unlike the Navy Polaris project, these construction undertakings required accurate time and cost estimates. The methodology developed by this company was originally referred to as project planning and scheduling (PPS).
PPS required realistic estimates of cost and time, and is thus a more definitive approach than PERT. The PPS technique was later developed into the critical path method (CPM) that became very popular with the construction industry.
During the 1960s and 1970s, both PERT and CPM increased their popularity within the private and public sectors. Defensee Departments of various countries, NASA, and large engineering and construction companies world wide applied project management principles and tools to manage large budget, schedule-driven projects.
The popularity in the use of these project management tools during this period coincided with the development of computers and the associated packages that specialised in project management. However, initially these computer packages were very costly and were executed only on mainframe or mini computers.
The use of project management techniques in the 1980s was facilitated with the advent of the personal computer and associated low cost project management software. Hence, during this period, the manufacturing and software development sectors commenced to adopt and implement sophisticated project management practices as well.
By the 1990s, project management theories, tools, and techniques were widely received by different industries and organisations.
Why Project Management?
There is no doubt that organizations today face more aggressive competition than in the past and the business environment they operate in is a highly turbulent one. This scenario has increased the need for organizational accountability for the private and public sectors, leading to a greater focus and demand for operational effectiveness and efficiency.
Effectiveness and efficiency may be facilitated through the introduction of best practices that are able to optimize the management of organizational resources. It has been shown that operations and projects are dissimilar with each requiring different management techniques.
Hence, in a project environment, project management can: (a) support the achievement of project and organizational goals; and (b) provide a greater assurance to stakeholders that resources are being managed effectively.
Research by Roberts and Furlonger in a study of information systems projects show that using a reasonably detailed project management methodology, as compared to a loose methodology, improves productivity by 20 to 30 percent.
Furthermore, the use of a formalized project management structure to projects can facilitate: (a) the clarification of project scope; (b) agreement of objectives and goals; (c) identifying resources needed; (d) ensuring accountability for results and performance; (e) and encouraging the project team to focus on the final benefits to be achieved.
Moreover, the research indicates that 85-90% of projects fail to deliver on time, on budget and to the quality of performance expected. The major causes identified for this situation include:
(a) Lack of a valid business case justifying the project;
(b) Objectives not properly defined and agreed;
(c) Lack of communication and stakeholder management;
(d) Outcomes and/or benefits not properly defined in measurable terms;
(e) Lack of quality control;
(f) Poor estimation of duration and cost;
(g) Inadequate definition and acceptance of roles (governance);
(h) Insufficient planning and coordination of resources.
It should be emphasized that the causes for the failure to deliver on time, on budget and to the quality of performance expected could be addressed by the application of project management practices.
Furthermore, the failure to deliver on time, on budget and to the quality of performance expected does not necessarily mean that the project was itself a failure. At this stage what is being discussed is the effectiveness and efficiency of project execution and not whether a project is a success or failure.
Conclusion
Project management should be viewed as a tool that helps organizations to execute designated projects effectively and efficiently. The use of this tool does not automatically guarantee project success.
