A unique process, consisting of a set of co-ordinated and controlled activities with start and finish dates, undertaken to achieve objectives conforming to specific requirements, including constraints of time, cost, and resources.
The next question that can be asked is
- Why does one need project management?’
- What is the difference between project management and management of any other business or enterprise?
- Why has project management taken off so dramatically in the last 20 years?
The answer is that project management is essentially management of change while running a functional or ongoing business is managing a continuum or ‘business-as-usual.
Project management is not applicable to running a factory making sausage pies, but it will be the right system when there is a requirement to relocate the factory, build an extension, or produce a different product requiring new machinery, skills, staff training, and even marketing techniques.
It is immediately apparent therefore that there is a fundamental difference between project management and functional or line management where the purpose of management is to continue the ongoing operation with as little disruption (or change) as possible. This is reflected in the characteristics of the two types of managers. While the project manager thrives on and is proactive to change, the line manager is reactive to change and hates disruption. In practice, this often creates friction and organizational problems when a change has to be introduced.
Projects may be undertaken to generate revenue, such as introducing methods for improving cash flow or be capital projects that require additional expenditure and resources to introduce a change to the capital base of the organization. It is to this latter type of project that the techniques and methods described in this book can be most easily applied.
This schedule shows the type of operations that are suitable for a project type of organization and which are best managed as a functional or ‘business-as-usual’ organization.
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Project Organization
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Functional or
line Organization
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Building a house
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Manufacturing bricks
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Designing a car
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Mass-producing cars
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Organising a party
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Serving the drinks
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Setting up a filing
system
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Doing the filing
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Setting up retail
cash points
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Selling goods &
operating tills
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Building a process
plant
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Producing sausages
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Introducing a new
computer system
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Operating credit
control procedures
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Both types of operations have to be managed, but only the ones in column (a) require project management skills.
It must be emphasized that the suitability of an operation being run as a project is independent of size. Project management techniques are equally suitable for building a cathedral or a garden shed. Moving house, a very common project for many people, lends itself as effectively to project management techniques such as tender analysis and network analysis as relocating a major government department from the capital city to another town. There just is no upper or lower limit to projects!
As stated in the definition, a project has a definite starting and finishing point and must meet certain specified objectives.
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Broadly these objectives, which are usually defined as part of the business case and set out in the project brief, must meet three fundamental criteria:
- The project must be completed on time.
- The project must be accomplished within the budgeted cost.
- The project must meet the prescribed quality requirements.
These criteria can be graphically represented by the well-known project triangle (Figure 1.2). Some organizations like to substitute the word ‘quality’ with ‘performance’, but the principle is the same – the operational requirements of the project must be met, and met safely.
In certain industries like airlines, railways, and mining, etc., the fourth criterion, safety, is considered to be equally important, if not more so. In these organizations, the triangle can be replaced by a diamond now showing the four important criteria (Figure 1.3).
The order of priority given to any of these criteria is dependent not only on the industry but also on the individual project.
For example, in designing and constructing an aircraft, motor car, or railway carriage, safety must be paramount. The end product may cost more than budgeted or it may be late in going into service, and certain quality requirements in terms of comfort may have to be sacrificed, but under no circumstances can safety be compromised. Airplanes, cars, and railways must be safe under all operating conditions.
The following (rather obvious) examples show where different priorities on the project triangle (or diamond) apply.
Reference: Project Management, Planning, and Control
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