July 06, 2012

Introduction to Project Management

Source of this information is http://www.pmhut.com/

In late 19th century, in the United States, large-scale government projects were the impetus for making important decisions that became the basis for project management methodology such as the transcontinental railroad, which began construction in the 1860s. Suddenly, business leaders found themselves faced with the daunting task of organizing the manual labor of thousands of workers and the processing and assembly of unprecedented quantities of raw material.

    Figure 1: This is what can happen without effective project management.

Near the turn of the century, Frederick Taylor began his detailed studies of work. He applied scientific reasoning to work by showing that labor can be analyzed and improved by focusing on its elementary parts that introduced the concept of working more efficiently, rather than working harder and longer.

Project management in its present form began to take root a few decades ago. In the early 1960s, industrial and business organizations began to understand the benefits of organizing work around projects. They understood the critical need to communicate and integrate work across multiple departments and professions. 

Project management seems to appear in the media mostly when it fails. Studies are released frequently to great fanfare on why projects fail. Senior officials appear in the news to apologize for major cost overruns in public projects.

You’d think that project management would be something to avoid!

But to an entrepreneur it is one of the most important skills they need. And it is one of the most important skills they need to seek out as their organization grows. Unfortunately, it is also one of the least understood skills that a typical entrepreneur brings to the table. And it is the last skill they think of as they build their business.

What is project management? And more importantly, why should you care?

One might think from the term that project management is managing projects. However, that is portfolio management. Project management is a much more difficult and complex discipline. In this article, I’m going to define project management, and explain how it differs from normal business management. Along the way, I’ll also explain why you, as an entrepreneur, need to encourage its development within your business.

First off, let’s get the term project out of the way. A project is a business endeavor, which produces a unique product, service or result. So far, that isn’t very helpful. Most business operations do that. However, a project has two key characteristics that aren’t common.

First, it is temporary. It has a beginning and an end. Most business operations do not have an end. Or at least one hopes not. Normally, business operations begin during the entrepreneurial phase of the business. But they quickly settle into a permanent routine. Project management, however, does not deal with the routine.

Second, projects are unique. They exist to create a single product, different from all other products. An operating business is all about repetition. It’s about creating the same product over and over. Only in that way, can the process be refined.

Building your business is a project. It has a beginning — when you first conceived the business. And it has an end — when the business moves into the growth and stability phases. And it creates a unique result — the business.

Project management, then is all about managing under these two conditions.

Normal operating management is concerned with repeating the same thing over a long period. And it develops the appropriate skills and knowledge to deal with that. For example, a manager learns to keep his team happy and producing at their maximum. He seldom if ever deals with the initial building of a team. And hopefully, he never has to deal with the end of his team.

Project management however, is concerned with building a unique result in a cycle of creation, doing, disbanding. It has developed the appropriate skills and knowledge to deal with beginning and ending a cycle. For example, a project manager learns to build a team and to disband a team. She is constantly in the building and ending phases and often never deals with a static team’s problems.

From an entrepreneur’s view, there are two major points of interest. First, building a company is a project. During that project, the entrepreneur will be involved in both strategic and operation elements. For example, he or she needs to identify the market and niche to address. And they will frequently be involved in selling to major or even all customers. However, management of the process of building a business is a case of project management.

But it doesn’t end with building the business.

In any business, there is a need to identify what is happening around the organization and how the business should react. This is strategic management. Its focus is on change and the future.

On the other hand, the organization needs to carry out its current function. This is the job of the operations elements of the business. Marketing, accounting, production are all concerned with today, and yesterday. Their focus is on continuation and repeating the same processes. Change is their enemy.

Of course, operations can’t be allowed to stay running in the place. They need to be steered or the business will fail eventually. The plans, goals and strategies identified by the strategic managers need to implemented. This is the role of project management. And it’s why an entrepreneur needs to ensure that project management skills are available to the organization as quickly as possible.

The Project Management Institute, better known as PMI, and on the web at pmi.org, is a certifying entity that offers a credential called the Project Management Professional. Managers will often follow their name with PMP; this means they are certified. To qualify for the credential, applicants must meet a number of requirements. I often get calls from people who want to change fields and work as a project manager but don’t have certification. It actually works in reverse; to be eligible for certification PMI requires that project management experience before you can earn your certification. That’s where some of the confusion really begins. The clearest point of reference you should always look to is the most current version of the Project Management Professional Handbook, available for download at PMI.org. It details everything you need to know about certification-how to get it, how to qualify, and once you do become PM certified how to maintain your credentials.