Project Management: What is it and how does it work in practice? A complete guide
Effective project management has become crucial for almost every company. New products, new investments, implementations of new IT solutions, and organizational improvements are just a few of the areas managed by project management. It is also challenging to find companies that implement business strategies without breaking them down into strategic projects. Project management has become so important that an increasing number of companies are deciding to establish a project management office (PMO) within their organizational structures. The Project Manager is also becoming an increasingly prevalent role in organizations. This is a person who possesses professional knowledge of how to manage projects methodically, as well as the necessary interpersonal skills to lead a team effectively. Project management is a multidimensional discipline. Only the right combination of methodologies, aspects of organizational culture, and human behavior can enable a company to achieve its project goals effectively.
In this article, you will learn:
What project management is and why it is crucial for companies.
The main project management methodologies, including Agile, Waterfall, and hybrid approaches.
The key stages of project management – from initiation to closure.
What tools support effective project management.
The most common challenges in project management and how to overcome them.
What is project management?
Project management is a set of carefully planned and coordinated activities that lead to projects delivering the required results within the specified time and budget. The key elements that should exist in any company that wants to manage projects effectively are:
Internal project management methodology – There are several project management methodologies, including Prince2, PMI, Agile, and others. All of them are very comprehensive, and each recommends that they be appropriately adapted to the specific conditions and needs of a particular organization.
Project Management Office (PMO). Developing an internal project management methodology is the role of the PMO. The PMO ensures that this methodology is effectively applied and consistently followed within the company. In addition, the PMO is responsible for project management training, supporting project managers, and reporting to the company’s management on the status of ongoing projects
Competent employees in the area of project management, including project managers, members of project teams or steering committees, as well as company management, should continuously develop their project management competencies.
Effective project management that leads to projects delivering business results within time and budget provides invaluable benefits to companies. There is tremendous value for any company in bringing a high-quality product to market on time, making an investment in new production capacity, or enhancing a key process within the organization. It is virtually impossible to accomplish this without proficiency in project management. Modern organizations seeking success in the market must also enhance their competence in strategic management. It is essential to have a well-thought-out strategy that can be constantly adapted to changing market conditions and skillfully implemented. Practically every strategy is implemented by companies, which decompose it into strategic objectives and these into appropriate projects. Subsequently, it is necessary to develop proper portfolios and programs from these projects, establish a roadmap of strategic projects, and provide them with adequate resources, both human and financial. The long-term success of any organization depends on its ability to implement strategy effectively.
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A project management methodology is a set of principles, techniques, tools, and processes that support the effective planning, execution, and control of projects. It outlines the process for running a project from inception to completion, ensuring that objectives are achieved in an orderly, efficient, and compliant manner. Project management methodologies encompass a range of processes, including goal setting, resource planning, progress monitoring, risk management, and effective project team communication. Project management methodologies can be divided into three main categories, depending on the approach to project implementation:
Traditional methods:
Waterfall (Cascade): This is the classic approach in which a project is implemented in well-defined stages. Each stage must be completed before moving on to the next. It works best for projects where requirements are well-defined from the outset.
Agile methods:
Agile: A project management philosophy that emphasizes flexibility and rapid response to change. Projects are implemented in short iterations with regular reviews.
Lean: Focuses on eliminating waste, optimizing processes, and delivering maximum customer value with minimal resources.
Kanban: A work management system that relies on visualizing the flow of tasks on Kanban boards. It helps identify problems and manage tasks in real time.
Scrum: An Agile framework that divides a project into short iterations, known as sprints. Each sprint has a specific goal and a defined completion time, and the team regularly evaluates its progress.
Scrumban: A hybrid approach that combines elements of Scrum and Kanban to manage tasks in iterations, but with more flexibility in workflow management.
Extreme Programming (XP): Focuses on intensive programming, frequent testing, and close collaboration with the customer. Emphasizes code quality and rapid adaptation to changing requirements.
PRINCE2: A project management method that combines a structured approach with flexibility and adaptability. It defines precise processes, roles, and documentation while allowing risks to be managed and progress to be controlled at each stage of the project.
Hybrid project management
Hybrid Project Management is a combination of two or more project management methodologies to implement a single project. In practice, it is most often either the agile methodology or the traditional Waterfall approach. This means that part of the project work, involving both project planning and implementation, is conducted using one methodology, while the other part is performed using different methods.
Key stages of project management
The vast majority of the most popular project management methodologies distinguish four main stages of project implementation:
Initiation stage
Initiation stage involves the initial definition of the project shape and the decision to launch the project. In many companies, gathering ideas for new projects is a necessary process. Companies recognize that harnessing the potential of employees and their creativity is extremely valuable. Therefore, they try to organize the process in such a way that every employee has the opportunity to submit an idea for a new project. It is known that not all ideas are valuable, and not all of them are worthwhile or can be implemented. Therefore, the next step is to evaluate the ideas, for which scoring models are often used. Once the best project ideas are selected, they are described using Project Cards, and then decisions are made on their implementation.
Planning Stage
Planning Stage based on the project assumptions outlined in the Project Charter, the project team initiates detailed planning. It’s worth noting that the concept of detailed planning differs between agile and traditional methodologies. Good thinking about how to achieve the project’s set goal significantly determines its success. It is not a good practice to start a project without any plan, although this happens quite often in practice. The main elements of a project plan are:
Project Charter
Project schedule
Project budget
Risk plan
Communication plan
Change management plan
Implementation stage
This is the stage of actual activities that lead to the achievement of the project objective. These are both substantive activities resulting directly from the project schedule, as well as a series of management activities (monitoring, reporting, risk management, project plan change management, stakeholder management) carried out by the Project Manager and the Project Sponsor.
Closing stage
Closing stage involves the official closing and summary of the project. A good practice is to complete a Project Closure Charter. Elements of such a Charter include “post-project conclusions” and “lessons learned”. Lessons Learned are critical, as their analysis allows better planning and implementation of future projects.
Project management tools enable better team organization, budget control, risk management, and automation of many processes. They allow for effective progress tracking, quick problem identification, and seamless communication among team members.
FlexiProject is an advanced, comprehensive project management tool that supports organizations at every project execution stage. With its flexibility, intuitive interface, and powerful functionalities, FlexiProject enables effective project planning, execution, and monitoring. The tool integrates all project management processes, from planning and budgeting to resource allocation, risk control, and progress reporting. In the video below, you can see how the FlexiProject project management tool works.
Key features of project management tools
Modern project management tools, such as FlexiProject, offer a range of features that enable you to manage projects of varying scales and complexities effectively. Here are the most important ones:
Gantt chart: Presents the entire project schedule in graphical form. On the Gantt chart, you can easily visualize the sequence of execution for individual project tasks and, most importantly, design logical connections between these tasks. The Gantt chart also allows you to analyze the critical path.
Project portfolio management: Projects of a similar nature should be grouped into project portfolios. Separate project portfolios can include new product development projects, strategic initiatives, investment projects, or organizational improvements. Managing project portfolios enables you to implement the company’s strategy more effectively.
Management of strategy implementation: This primarily involves precisely aligning the company’s strategic goals with projects and key performance Indicators (KPIs). The company’s management can then quickly analyze the degree to which individual strategic objectives are being met.
Risk management: Identifying and managing project risks effectively is a crucial part of any project. Every project team should regularly discuss project risks. When implementing large and complex projects, it is worthwhile to maintain a register of project risks.
Budget planning and monitoring: The implementation of the project by the adopted budget is a fundamental assumption, directly stemming from the project’s definition. In practice, not all projects require the creation and monitoring of a budget. Such projects include those implemented with own resources and with which virtually no expenses are associated. On the other hand, significant investment or new product development projects require good management of the project budget.
Resource management: A lack of sufficient project resources to carry out all projects within a company is one of the most significant problems encountered in organizations. Therefore, project resource management is one of the most crucial processes that significantly impact the ultimate success of projects. Resource management comprises two primary processes: resource requirement planning and resource allocation.
Reporting and analysis: Reports and analyses are required by project managers, project teams, Program Management Offices (PMOs), project sponsors, steering committees, and company boards. Those responsible for monitoring project performance need comprehensive and well-presented management information.
Process automation: Today’s IT tools, which support project management—including FlexiProject—enable the automation of several project management processes. These processes include automatic decision paths, automatic notifications, automatic reporting, and the ability to create templates for repetitive projects.
Collaboration and communication are key aspects of a successful project team. There are built-in communicators in good project management software.
Integration with other tools: Companies utilize multiple IT systems in their daily operations, and these systems must work together to a certain extent. The most common integrations of programs such as FlexiProject involve Microsoft Excel, Microsoft Project, Jira, ERP systems, Active Directory, Microsoft Teams, or Outlook.
The dynamics of change in the competitive and economic environment, and consequently within companies themselves, mean that organizations must overcome several challenges to manage projects more effectively. The main challenges include:
Securing adequate resources for projects that are started and underway. The need for new projects often results in them being started without proper resources. The consequences are frequent delays in the implementation of milestones as well as entire projects, lower quality of delivered results, and demotivation of project teams
Inconsistency between implemented projects and the company’s strategic goals. The result of such behavior is an excessive number of ongoing projects and lower effectiveness in implementing the strategy.
Ineffective IT tools supporting project management. Many companies often rely on in-house developed solutions using Excel, Word, and Outlook. Such solutions are not well-suited for managing multiple projects simultaneously, where data accuracy and ease of accessibility are crucial. Such tools do not support teamwork and good communication.
Lack of PMO and good standards. A well-managed PMO has a significant impact on the quality of project implementation within organizations. The role of the PMO is to develop internal project management standards, promote them in the organization, support project teams, and report on the status of ongoing projects.
Inadequate project management skills. Quite often, project managers become individuals without professional knowledge in project management. The same applies to members of project teams, steering committees, or project sponsors. Providing training and relevant competence is an essential role of the project management office.
Lack of sound project planning. Developing a good project plan takes time and is often a challenging task. But starting a project without a good plan is an imprudent action. It is more profitable to think well about a project at the beginning than to correct various things during its implementation.
Lack of focus on achieving the goals set for projects. Achieving the project’s goal is the primary task of the project team and should always be the top priority.
![What is a Gantt Chart, and how to create one? [EXAMPLE]](https://flexi-project.com/wp-content/uploads/2024/04/What-is-Gantt-chart-e1714048900401.png)
![What is a Project Charter and how to prepare it? [EXAMPLE]](https://flexi-project.com/wp-content/uploads/2024/04/Project-charter-flexiproject.png)
