What is project management? Why project management is important? Why is there a need for project management? We will find the answers to these questions regarding project management in this article.
What is project management?
Project management is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements (PMBOK Guide, Sixth Edition).
Today’s project manager has numerous challenges. Some are new to the industry, and some are centuries old. These challenges can have an impact on project success and hence must be addressed and managed by the project manager to ensure project success. It is critical that the entire project team understands the demanding realities in the planning, execution, monitoring and control of projects.
KPMG-PMI Study on Schdule and Cost Overruns1
Infrastructure development has been a key focus area in India in the recent past and big budgets have been allocated. However, the country has consistently fallen short of meeting targets and projects have been invariably riddled with issues of time and cost overruns. With the objective of finding out the reasons for such schedule and cost overruns, Ministry of Statistics and Programme implementation (MoSPI) recommended PMI to conduct a Study, in consultation with KPMG.
The KPMG in India – PMI study 2012 identified that majority of projects were delayed by factors which can be controlled at the project level through proper planning and project management.
Poor project planning coupled with lack of attention to details leads to project delay. 79% respondents to the survey felt that change in project scope/ design led to project schedule overruns in the execution phase. 70% respondents agreed that scope creep led to project cost overruns.
Inadequate supply of project management professional is identified as another major cause for the schedule and cost overruns. The study says that sub-standard project management is basically a result of shortage in acquisition of talent who are conversant with the latest information technology tools and applications for project management.
Projects in the execution and closure phase are affected by insufficient monitoring and inefficient project change management. In addition, lack of knowledge and application of tools and techniques for seamless integration of different functions of project/program among the project management professionals often lead to delays.
At times, project cost estimates are highly unrealistic. As a result, the actual expenditure incurred is significantly higher than the planned value. It is important to have qualified cost engineers and project professionals with expertise of project management tools, techniques and practices for efficient project delivery.
The rationale for Project Management arises from the need to institute consistent standards and methods, eliminate project delays, improve project planning processes, establish roles and responsibilities, remove cost overruns and contain costs.
FICCI-PMI Study on Project Management in India2
This study has been conducted by Federation of Indian Chambers of Commerce and Industry (FICCI) with technical assistance from Tata Consultancy Services Ltd (TCS) for the Project Management Institute (PMI).
Project management is like juggling three balls simultaneously as it involves maintaining a fine balance between delivering on time, within budget while ensuring quality. Examples of large and complex projects being delivered on all three parameters are few and far between. In India, for example, construction of the Delhi Metro Rail is considered to be one of the more successful ventures. However, in general, the problem of time and cost over-runs remains a common pain area.
The study by FICCI-PMI on project management in India has identified that effective project management in infrastructure sector offers potential scope for national savings by enhancing capital expenditure efficiencies.
The study has identified six major challenges and constraints for projects:
- Inaccurate assessment of project risk
- Lack of capability to manage project complexity
- Inability to correctly estimate and monitor
- Ineffective utilization of best practices and benchmarks
- Difficulty to involve multiple and diverse stakeholders
- Inability to synchronize project plan and execution
The importance of project management
I have included the highlights of the KPMG-PMI Study and FICCI-PMI Study to stress the importance of project management. The benefits of project management are indisputable. Project management enables organizations to execute projects effectively and efficiently.
The direct benefits of project management are better control of scope, time and costs, all of which lead to better and faster delivery of projects. Good project management leads to higher quality, increased reliability and improved productivity. All these leads to larger market share in business context.
Project management enables an organization to apply knowledge, processes, skills, and tools to enhance the likelihood of success over a wide range of projects. Projects are means of achieving organizational strategy and objectives. Effective and efficient project management should be considered as a strategic competency within an organization.
Certified Risk Management Professional (PMI-RMP)®
An enthusiastic project management practitioner and trainer.