Project Management: A Quick Guide and Fair Warning

There are day-to-day operations in a business, and then there are projects.

When your business decides to launch a new service, that’s a project. Everything that’s involved in “ramping-up” for the new service introduction, including testing the market, determining the exact nature of what will be offered, pricing, promotion, and the like, comes under the umbrella of that particular project.

Projects can vary in size and importance. Installing software to computers across your company – choosing the software, negotiating price and service, arranging training – is also a project, but so is reorganizing a file system, or rearranging the furniture in your office.

Project-oriented thinking has become so prevalent that an entire methodology, labeled project management, has entered the vocabulary of nearly every industry. In fact, project management has almost become an industry itself. There are project management consultants, project management seminars, project management certifications, project management books and software programs, and even a Project Management Institute.

Project management refers to a method for achieving a specific goal. It’s a way of planning, organizing and utilizing what is needed to meet a certain objective (e.g., introducing a new product). The temporary nature of these managed projects distinguishes them from the regular activities of a business. Advocates say that disciplined project management is the most effective way to achieve a desired outcome in complicated organizations where many tasks are competing for attention.

But where to begin?

After the project has been defined (e.g., preparing a lab for an inspection) successful project management comes down to effectively putting into play the three basic components of the process; resources, time, and money.

Resources

Resources are the physical components needed to run the project. They typically consist of people, equipment and materials.

Equipment and materials are self-explanatory for the most part, but the people part of the resources category can get tricky. One management consultant is fond of saying that successful organizations have “the right people doing the right things at the right time.” This is never truer than in the case of project management, so take extra care to make sure the project team members are not only qualified to carry out their assigned tasks, but also that they have adequate time to devote to the project with respect to their usual responsibilities at the company. And be sure to assign a Project Manager or Leader, and insist on periodic reports or updates.

Time

Generally, projects have specific start and end dates. They can be altered, of course, but careful planning based on realistic assumptions during the preliminary stages should increase your chances of meeting a deadline, whether it’s self-imposed or coming from higher up in the company.

Often the toughest part of managing the time element of a project is coordinating schedules of team members who must work together on certain parts of the project, or who must at least meet and discuss project developments.

Numerous software packages can help manage and track the project’s progress. The time-tested and very popular Gantt Chart uses bar graphs to illustrate when certain tasks related to the project should be completed.

Money

High level projects are usually assigned budgets to make sure managers can acquire what is needed – special equipment, consulting expertise, raw materials, facilities, etc. – to effectively conduct the work. Expected costs are calculated, along with allowances for contingency and emergency funds.

Depending on the structure of your company, employee compensation, travel and related expenses, and certain overhead costs could also be included in a particular project’s budget.

The Dangers of Scope Creep

Fair warning to new project managers: Projects often fail not because of poor performance, but rather because of “scope creep.” Scope creep refers to a situation where new elements are added to project, and complicate budgets, timelines, and responsibilities of assigned personnel.

Example: Half-way through a plan to update software on company computers, someone suggests an evaluation to update the company’s phone systems. This might be a worthy goal, but if done correctly it would definitely impact the project team’s ability to deliver on time and on budget. At this point, the entire project should be redefined to include phone systems, along with changes with respect to resources, time and money. If that is not practical, a new team could be assigned to tackle the phone issue as part of a separate, clearly defined project.

MP Star Financial’s invoice factoring services can make your company’s cash flow more predictable, allowing you time to run your business and grow your company.

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