What is project management?
Important in any business is project management and it is nice to have a working knowledge on the subject in order to deliver effective and efficient results and long-term business success. In this article we will explore the basics of project management and the important things you need to consider as well as the metrics for a successful project.
Let's first discuss the definition of project management. When we say that we have a project in the company what do we exactly mean? According to the Association for Project Management, project management is the application of processes, methods, skills, knowledge and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters. Project management has final deliverables that are limited to a definite timetable and budget.
Project management then is both a skill and knowledge rolled into one.
You need the basic knowledge on your business at the same time the necessary skills to turn your ideas into a reality. Clear goals and metrics will also be required to determine if your project is a success or a failure.
After learning about the meaning of project management, equally important in our discussion is the definition of a project. What is a project? According to the Association for Project Management a project is a unique, transient endeavour, undertaken to achieve planned objectives, which could be defined in terms of outputs, outcomes or benefits. A project is usually deemed to be a success if it achieves the objectives according to their acceptance criteria, within an agreed timescale and budget.
Let’s consider the important factors of any project – time, cost, quality and definitions of success:
Time is money
In project management time is of the essence in here proper scheduling of every step and stages of the project are detailed as well as the deadlines for doing them. This is important in project management since a planned, detailed and good schedule determines the delivery of the product or services the project aim to attain.
As the project manager it's expected of you to be an expert time manager.
Many businesses today are very conscious about cost. an effective project will have need a clear budget or at least a viable estimate of the expenses the project expects to incur.
Cost is the amount you will spend in every stage of the project until its completion based on the schedule. You can manage cost by determining the raw materials needed for a project as well as reasonable estimates to complete the project such as salaries and wages, equipment and work process.
Be careful with cost management. Attempting to minimize spending in project scoping can lead to disastrous results long term. A projects effectiveness will be managed by the real return on investment not the projected one so it is often better to allow for contingencies and wastage when constructing a project budget.
Another important point on cost management is the potential benefit of external specialists. In the same way it doesn’t make sense to fit out your garage with specialist tools for the one time you might decide to service your car, it often does not make commercial sense to have your key staff take time out of their role to construct and execute on a new business project.
Any project completion be it a product or service must have quality. A project that is completed on time and with lesser costs but falling short of quality is a bad project and it speaks of a failed project management by you.
How do we determine quality?
Today, standards of quality are often defined by the government by the laws and regulation it implements that is applicable to your project. The industry you belong to also determines quality standards by enforcing agreed measurement of quality like reliability, customer satisfaction rating, total costs among other indicators.
Quality measures such are often unique to the project – for example with call centers quality is often defined as a “call back” ratio or – how often a client calls back within 20 minutes of their last call. Manufactures often use a PPM (parts per million) failure rate to determine product quality. Your own company will have a unique quality metric, if not it might be an effective project to determine the definition of quality that makes sense to you. . Let's continue then to the last part regarding using metrics in your project management in order to measure success. Many metrics can be considered but we believed these 3 hold the key in measuring your success rate in project management.
1. Gross Profit Margin
This is what we already mean when we said in the first part of this article that you need to manage costs in order to contribute to the pocket of the company.Gross profit margin is the measurement of how well you managed your costs to your project and the effect it has on the total financial standing of your company.
According to Workfront the higher the margin, the better the business is doing. Margin is the percentage of each dollar earned after costs have been subtracted.
2. Return on Investment
This metric measures the income you gained from the costs you spent on a per dollar basis. Your project is a success when you are able to return the cost in a short period of time from the project completion.
When your product and services is already sold in the market how well does it generated income versus your costs? This also measures the benefits your project has given the company. Did it improve sales? How about productivity perhaps or employee morale? In short, this is the contribution of your project after its completion to your company.
3. Customer Satisfaction
Doing business, your customers determine your success by the money they spent to your company, confidence in your product and service and free promotion they give your business to their friends, family and associations.
Because when you have customer satisfaction, loyalty can follow.
Having a higher customer satisfaction rating on your project is a metric that should not be left out. It could measurehow well your customers rate the changes you introduced to your company, and how this compared with their view of the company before hand.
This article only scratches the surface – the truth is that project management is a skilled, specialized profession in itself with unique qualifications and a large body of research and solutions. The basic tips above can assist any small business owner or team manager in crafting and executing an effective project.
Association For Project Management (2019). What is project management?. United Kingdom:
Association For Project Management .
Workfront (2019). 10 Project Management Metrics to Propel Performance. Australia: Workfront, Inc.