Chapter 2 Project Management – Projects, Programs, and Portfolios in Strategic Organizational Transformation


Project Management

  • When you observe the business world, and life itself, you find that projects are everywhere.
  • The characteristics of project management include a clear goal and unambiguous output.
  • Organizations constrain projects to schedule, budget, and product requirements (scope).
  • Projects require balancing resources, relationships, and risks to achieve expected project goals and performance results.

Chapter Structure

Projects and Project Management

What’s a Project?

Simply defined, a project is a temporary endeavor undertaken to create a unique product, service, or result (PMI 2017). Simplicity ends, however, with the definition. Consider the environment in which a project transpires, shown in Figure 2.1. An idea originates in the organization. It may involve any number of executives, managers, supervisors, or employees. If the idea survives initial analysis and debate, the organization codifies the idea as a set of requirements, setting the scope of the project. The requirements could specify a new process for operating, a new or revised product for manufacturing, a facility to be constructed, or whatever else may encapsulate the idea. A project is initiated to produce the output that best meets the stated requirements. The project draws on the limited resources of the organization in competition or cooperation with other projects and continued operations. Internal constraints are set according to resource availability, the flexibility of the requirements, and criticality of timing. External constraints arise from competing and regulating interests within and outside the organization. Once complete, the project terminates, and the output passes to its intended operational life.

Figure 2.1 What makes a project a project?

Projects come in a variety of contexts and types, each with unique features that often dictate the techniques employed during execution. Figure 2.2 shows a spectrum of project types, from those that have well-specified procedures to reach the desired output, to those that have more flexibility in how to arrive at the requirements. All projects have clear goals and specified requirements. An installation project might require the placement of new machinery in a manufacturing center. The project would involve major functions like the removal of old machinery, the training of workers on the new equipment, the placement of the new machinery, testing of the equipment, and reinforcement of learning to reach production capacity. In this case, the goal may be to increase operating capacity 25 percent and the requirements precisely specified with the attainment procedures established.

Figure 2.2 Spectrum of project types

A construction project might have a goal of building a new office center for the organization. The construction plan is set into the blueprints, and traditional construction processes applied. Specific designs provide adequate space and uniformity of appearance. Limited flexibility may exist in outsourcing certain steps or choosing the best equipment to build-out. An event may be for charity and set specific goals of publicity and fundraising, but allow flexibility in venue and activity. Development projects may be for new systems to meet information requirements. The goal may be to replace a legacy information system with one that is more streamlined or develop a new product for a particular market category. The goals can be very rigid, the information needs for the application quite specific, but the final product may evolve from the procedures employed. Replacing a legacy information system with one more integrated with other systems to reduce data errors and redundancy may have a very clear goal, but the system to be designed may be part of an agile system development with great flexibility to respond to the needs of the users.

A transformation project targets a change in the organization to better match operations to strategy (Söderlund 2010). From the proceeding chapter, a transformation project typically involves the incremental changes that are continually planned and executed. Substantial change requires more involved organizational management structures than a simple project, and those discussions follow in successive chapters. An incremental change that might be a single project would be adjusting employee behaviors by implementing new performance metrics. As an example, a call center may shift focus from evaluating employees on the number of calls handled to a focus on cross-sales generated. The goal is clear, the standards to implement specified, but the processes may not be evident, and the final product might have potential variations. Specific data collection techniques must be in the final output to implement in the call center, but the design of the collection technique will be one of the tasks to accomplish. Training is known from the start to be essential, but the actual conduct may not be in the requirements and must be tailored to best support the final output.

Research projects often have the goal of answering a specific question or solving a particular problem, but require latitude to explore many prospects and pursue a variety of solutions before arriving at any particular answer or result (Vom Brocke and Lippe, 2015). Of course, the delineation between the types is not sharp, and each type has the potential to become too complex for traditional project tools and methods. Further, since each project is unique, descriptive categories are effective at highlighting the difference between goals and output specifications, but not necessarily at leading one to the correct tools to succeed, where success at the level of projects is meeting the goals and requirements stated (scope) and staying within the constraints set by the organization on schedule and budget.

What’s Project Management?

Project management is the application of knowledge, skills, tools, and methods to meet project requirements. This definition implies that an organization must effectively coordinate a large variety of resources to reach the specific goals of any project. Because project management requires a diverse knowledge of quantitative tools, estimation techniques, personnel behavior, and organizational context, project management has become a unique discipline filled by individuals with unique qualities who can advance a project to completion.

The discipline of project management is rooted in a long history of activity that seeks to develop a particular product under constraints of time and cost. The recognition of project management as a specific discipline and career goes back to the early 1950s in the construction industry, military weapons, and information technology projects. Less formally, project management has its roots in older construction projects such as the pyramids of Egypt, the aqueducts of ancient Rome, the castles and cathedrals in Europe, and the build-out of major infrastructure such as the Panama Canal. Project management tools and techniques enabled projects such as the Manhattan project, the Chunnel, and the Polaris submarine.

Over the years, certain standards of project management have come to include a distinct life cycle, management of cost, estimation of schedules, and a goal directed at a specific performance capability. Typical ­management duties of planning, motivating, directing, and controlling are required in managing a project to successful completion. However, the project manager does not carry the authority of typical line management, requiring additional abilities of leadership to motivate and coordinate across functional and organizational boundaries. Project managers often have no home within an organization. Yet project managers often hold the responsibilities for dealing with changes to the process, service, and products in modern organizations.

Understanding the tools and trade of the project manager is a critical objective of academic researchers and top management. Years of evolution in organizations and the results of academic research have led to a large body of knowledge about the required skills, attitudes, abilities, and tools essential to achieving successful completion of a project. Much of this understanding is incorporated into the standards set by professional societies dedicated to the project management professional. Guidelines for practice and behavior based on large bodies of historical information are captured in documents such as the Project Management Institute’s body of knowledge publication (PMI 2017) and the International Project Management Association’s competence baselines (Vukomanović et al. 2016). The growth in membership of professional societies for project management indicates the popularity of a project focus for many of the transformations in modern organizations.

The project manager, then, is responsible for taking the idea in Figure 2.1, determining the requirements that embody the idea, planning the activities of the project, adjusting for the available resources and constraints, to produce the deliverable best meeting the specified requirements. The idea originating the project can fall under any of the project types in the spectrum of Figure 2.2, but is generated before the inception of a project. As such, the quality of the idea itself is the responsibility of the executive choosing to pursue the idea, while the project manager is responsible for producing a deliverable to the specifications according to a specific schedule and budget. The severance of the idea from the process to deliver the idea delineates responsibility as well as rewards and credits for success. A poor idea can result in a successful project if the project manager can deliver the idea according to specifications, time, and budget. However, the poor idea will likely have no value to the organization. On the other hand, a great idea might be poorly managed during the project resulting in a product that is excessively late, way over budget, or a poor match to the specifications. Success requires that the executives choosing the projects properly execute their responsibilities, and that the project manager competently arrives at a project completion meeting expectations.

In the transition arena, a simple project might be based on an executive decision to reform the sales team from a single point of contact philosophy to a pooled service group philosophy. The project might require reshuffling personnel according to talent, background knowledge, regional affiliation, or another appropriate determinant. A time frame and budget would be established for completion. Specific objectives would be established to, perhaps, guide the reallocation of personnel in terms of improving service to the client base or expansion of the market. Modifications to existing business processes may also be required. Potential trade-offs among the specifications or scope, the time to completion, and the cost of achieving the deliverable represent a maxim known as the iron triangle in projects. This triangle is represented in Figure 2.3. As in most any management situation, delivery to a fixed level of requirements can be adjusted to a shorter schedule with increased costs or similarly maintain lower costs through schedule slippage. Likewise, cost or schedule may be reduced by reducing the scope of the requirements.

Figure 2.3 The iron triangle of project management

Of course, while planning a project, the project manager must consider many externalities in the determination of requirements, cost, and time. These are represented in Figure 2.1 as the constraints and resources that impact the project in achieving the deliverable. These externalities run a large gamut that includes issues of human resource management, procurement, risk management, and communication with a variety of stakeholders. All of these are within the boundary of the project to be managed and combined to produce the final deliverable. This grouping is represented in Figure 2.4. Consideration of all activities within these boundaries is the scope of work required of the project manager.

Figure 2.4 Project management boundary

Project Management Motives

The activities of accomplishment in business include “operational activities” and “project activities.” Of these, operational activities are those that must be repeated and continually performed to maintain the daily functions of a business. Project activities are nonroutine tasks that businesses perform to achieve specific objectives (the deliverable). The biggest difference between a project and operational activities is that project activities tend to be temporary and one-time activities (Turner and Müller 2003). These characteristics indicate that project activities have a limited amount of time and budget dissimilar from the regular concept of production schedules and productivity. If businesses apply traditional management concepts used for operational activities to project activities, they will find it difficult to provide quality products and services according to time and cost constraints. Even if the deliverable matches the specifications, businesses may fail to achieve expectations of cost and schedule (Atkinson 1999).

Project Management Can Create Unique Products, Services, and Results

Operational activities tend to follow repetitive organizational processes. Conversely, because projects are unique, there may be elements of uncertainty and difference between the products, services, and results produced. Project activities may be completely new for project team members, with more detailed planning required compared with routine work. Projects can be developed at any level of an organization, involve one person or many people, and encompass only one organizational unit, multiple units, or even multiple organizations.

Projects develop unique products, services, or results while managing costs, delivery time, and quality. Project deliverables may be tangible or intangible. Even though there might be repetitive elements in the results and activities of certain projects, this repetitiveness does not affect the core uniqueness of projects. For example, in construction projects, the same or similar materials are utilized by the different projects, but each one is unique due to differences in location, design, environment, circumstance, and stakeholders.

Projects can generate:

  • A product that may be a component of another product, an upgraded version of another product, or a finished product;
  • A type of service or the capability to provide a certain service (e.g., support capabilities for production or logistics);
  • An improvement over existing product lines or service lines (e.g., implementation of six sigma to reduce defect rates);
  • Performance results, for example, in the form of knowledge or files (e.g., knowledge generated from research projects which can be used to determine the existence of certain trends or whether new processes are beneficial to society).

With Project Management, There Is Strong Cost Management

The amount of resources that can be deployed and utilized for a project is typically limited. To control costs for a business, project managers have to consider and plan total budgets for a project. In other words, the project budget is one of the keys to start a project. Overly high or unreasonable project budgets can cause project sponsors to abandon projects. Therefore, it is necessary to budget and set costs before starting any project. Without a reasonable plan for cost management, it is difficult to ensure that projects do not exceed their budgets; once a project exceeds its budget, this can signify failure.

With Good Project Management, Results Are Achieved On Time

Often, the time of project completion is set by the environment. A transformation to pursue new markets must be completed before competitors can capitalize on delays. New products may have seasonal demands, and a delay might mean the market cannot be breached for an extra year. If a project is not completed within the given amount of time, this signifies the failure of said project. Therefore, it is necessary to systemically plan projects from start to finish plotting the actions of the project to a timed commitment. Completion dates are viewed as hard commitments by those expecting results. Thus, in conjunction with budgets, planned schedules and techniques to control actions to plans becomes an important activity.

With Project Management, There Is Strong Quality Assurance

Within a project, the term “quality” refers to the fulfillment of client expectations and demands—meeting the requirements with the deliverables. In the long run, clients mainly remember the quality of results. Dissatisfaction stemming from an output that fails to pass muster endures much longer than the satisfaction derived from a project that is completed on time and under budget. Systemic project management is the best way to ensure routine quality control over the deliverable. Project management makes it possible to identify and correct problems promptly, which reduces losses and delays caused by redoing erroneous work, and wards off project failures. The key point is that without project management, it is highly difficult to find a balance between cost, quality, and delivery time. When planning project budgets, it is necessary to balance project resources and delivery time, and also ensure that project results meet expected goals. Project managers, therefore, need to find a reasonable sweet spot between project budgets and delivery time; this sweet spot is the “quality” of the project.

The Deliverables of Project Management Have a Far-Reaching Impact

Even though participation in and duration of projects tend to be temporary and a one-time sequence of activities, this does not indicate the products, services, or other results of a project are temporary. Projects typically generate permanent results. The social, economic, and environmental impacts of a project usually last much longer than the project itself. For example, a project for the construction of a national monument creates an output that can endure for centuries (Edum-Fotwe and McCaffer 2000).

In summary, project management on the one hand balances costs, delivery time, scope, and quality, and on the other hand differs from operational activities in that project activities can generate unique products, services, and results with a long-lasting impact. Therefore, management techniques of project activities are widely used in business circles.

Elements of Project Management

Within the boundary of a project lie elements that categorize the activities involved. The elements represent major categories of activity that fall within the purview of the project manager. Management of the project boundary ensures that projects execute only the work required for the deliverable. The boundary is quite porous; however, as a constant interchange with other units in the organization is essential to conduct the activities within the individual elements. The purpose of this book is not to provide detailed information on project management elements, but to highlight the issues that arise. To that end, we give brief descriptions of the elements involved in managing the project boundary. Greater information is available in sources such as the Project Management Body of Knowledge of the Project Management Institute (PMI 2017).

Project Time Management

Project time management ensures that all required project processes complete on time. Time management requires a plan, presented as a schedule, and methods to monitor progress against the schedule. The schedule itself describes the work that is to be accomplished over time.

Scheduling is one of the basic requirements of project planning, yet the estimation process is one of the more complex tasks. The first step in completing a schedule is usually the development of what’s known as a work breakdown structure. The work breakdown structure segments the project into smaller packages, known as work packages, that can be sequenced into a schedule. Each work package is an identifiable segment of the tasks required to complete the project. A work package should be an independent unit that allows an accurate estimate of the time for completion and associated costs.

Work packages are then sequenced on a calendar that indicates the order in which they are to be completed based upon the precedence requirements of one work package to the next. When all work packages have been placed on the schedule, the schedule permits a projection of the total time of completion for the project, scheduling of resources, and an estimation of overall costs mapped to the calendar.

With the schedule complete, the project manager can maintain control over time by comparing the actual status of the tasks completed to the plan. Variances in progress to the schedule will require adjustments either to the plan or to the dedication of resources to specific activities. The planned schedule is, thus, a critical tool for determining aspects of time and cost.

The ability to break a large project into smaller independent units, such as the work packages, is a critical skill in the management of time. Estimating the times to complete the work package can be a difficult and tedious process on its own. However, when sufficiently detailed and isolated, the work packages make the estimation process feasible and more reliable. Conceptually the process described takes a project of any magnitude and breaks it down into smaller, manageable segments.

Project Cost Management

Project cost management ensures that projects complete within the approved budget by managing all processes relating to the planning, estimation, budgeting, financing, fundraising, and control of costs. Managing costs goes hand-in-hand with the management of time. The same work packages that enable an accurate estimation of time also enable an accurate estimation of direct costs through segmentation. Just as the overall time to complete a project is estimated by accumulating the times of the work packages, the overall direct cost is determined by accumulating the individual work packages. The direct costs might include materials, labor, equipment rental, and identifiable support. Overhead and administration are attached to the individual work packages based upon the needs of the organization, perhaps allocated as a percentage of time or labor or another mechanism that the organization deems appropriate. Once complete, controlling cost is done by tracking expenditures and comparing them with the planned budget at any point during the project. As with variances in time, a significant variance from the budgeted to actual expenses must be addressed.

Project Quality (Requirements) Management

Project quality management encompasses the implementation of existing processes and activities relating to organizational quality policies, goals, and responsibilities, ensuring that projects fulfill expected requirements. Thus, quality management involves assuring that the requirements as specified are met, satisfying the scope of the deliverable. Within project environments, quality management often utilizes policies and programs of the organization and executes quality assurance systems in place. Typically, quality management involves developing a plan, assuring quality is met, and implementing a quality control program. Quality planning identifies the standards to which the project will be held, both for the specifications of the deliverable as well as standards the organization holds important such as ISO certification. Quality assurance is typically set by performance criteria to which the project will be held. Quality control is then checking for variance in the work results against the standards set during planning. Again, variances require adjustments. It becomes critical to ensure quality continuously during a project, since the earlier variances are captured, the lower the cost of correction.

Project Resource Management

Project resource management encompasses the full range of resources, including personnel, equipment, supplies, raw materials, and facilities. As with time and costs, resources are typically allocated to individual work packages, which allow the precise determination as to when a resource will be required for the project. However, projects must compete with operations and other ongoing projects for the limited resources within an organization. Looking at the human resource aspect, project teams are composed of personnel who take on different roles and responsibilities to complete projects. Project team members may have different skills, may work full time or part-time, and may be working on more than one project at any particular time. Thus, resource management is not just the assignment of a resource to a particular work package and then assuming availability when required, the project manager must work with other departments and projects within the organization to assure the availability of required talent when needed. The same concerns arise for specialty equipment and facilities during a project. The lack of availability of the resource, whether personnel or physical, will necessarily delay the project, extending the time of completion or adding to costs.

Project Communication Management

Project communication management encompasses all processes relating to project information, such as timely planning, collection, generation, delivery, storage, indexing, management, control, monitoring, processing, and presentation to essential recipients. Project managers spend much, if not most, of their time on communicating with team members to control the progress of the project and stakeholders external to the project to inform of progress and remain informed of possible influences arising outside the boundaries of the project. External stakeholders may be from within the organization (at all levels of an organization) or from outside the organization. Effective communication builds a bridge between project stakeholders, connects stakeholders with different organizational backgrounds, levels of expertise, viewpoints, and interests. Making certain each stakeholder receives necessary information in a timely fashion is critical for maintaining progress as well as a favorable political atmosphere.

Project Risk Management

Project risk management encompasses processes relating to the identification of risk, analysis of risk, and control of risk. The goal of risk management is to increase rates and impacts of positive events on a project, and to decrease the rates and impacts of negative events. The identification of risks is the first step in enabling prevention of delays or extra costs. Various approaches to identify risks exist in practice. Project managers can consider information from previous projects, refer to predefined checklists for project risk areas such as technology, consider issues in personnel records that indicate missing skills and training, refer to results of audits on project management capability, or rely on reviews conducted by peers and senior management. Once identified, risk should be quantified in terms of their likelihood of occurrence and the damage due to the particular risk. Risks of low probability and low impact are typically ignored, while others are considered more severe. Those risks considered more severe in terms of either consequence or probability should be addressed during planning. The plan should specify how potentially damaging an identified risk can be, and when it may surface during the project. The plan should also consider techniques to mitigate the damage specific risk might create to the completion time or cost of the project. Mitigation techniques might involve using alternate technologies than originally planned, nonstandard operating procedures to avoid historical problems, or require additional talent be hired to fill gaps or prepare for exigencies. Those risks that remain unmitigated should have contingency plans to avoid delays created during a project by having courses of action already determined rather than forcing crisis management.

Project Procurement Management

Project procurement management relates to the obtainment of required resources. The determination of essential resources is established during the planning of a project. Resources available within the organization must be arranged through the structure provided by the organization. Since resources are shared by many projects and even operations, procurement often involves negotiation with other departments, projects, and even executives. Agreements are documented and guaranteed through charter arrangements within the organization. When resources from outside the organization are required, procurement involves contracting for services and supplies. For larger projects, the nature and structure of contracts are fundamental to the success of the project. Performance warranties are mandatory to prevent damage to the project by nondelivery of a contract’s agent. The presence of external contracts also requires the inclusion of contract administration in the work packages of the project.

Project Stakeholder Management

Project stakeholder management encompasses the processes needed for the following tasks: identification of all personnel, groups, or organizations that may impact on or be impacted by the project; analysis of stakeholder expectations of and their impacts on the project; and establishment of appropriate management strategies to effectively deploy stakeholder participation in project decision making and implementation. Stakeholder management also includes continued communication with stakeholders to understand stakeholder requirements and expectations, facilitate problem solving, manage conflicts of interest, and secure stakeholder participation. Importantly, the project manager must understand the impact that supportive, indifferent, and hostile stakeholders might have on the final deliverable.

Combination of Project Management Elements

Every project includes the aforementioned elements to one degree or another. Each of the elements is a piece of the project management puzzle. The project manager must combine all of the activities carried out by the project management team. Even though the project management elements tend to be well defined and mutually independent, they may in practice overlap or interact in ways that are beyond the scope of published guidelines and incorporated into the process of managing a complete, successful project.

The Project Management Process

Apart from categorizing the elements involved in project processes, it is important to structure a sequence for completion of a typical project. This requirement fits well with the conceptual representation of a project life cycle. For the life cycle, there is a specific beginning, a recognizable set of activities, and a conclusion to every project. This suits the nature of projects as one-time structures to realize a very specific deliverable. Figure 2.5 shows a generic life cycle for most project types. An idea initiates the project; a plan is developed to meet the requirements that embody the idea; and the project manager directs the project to closure with the given specifications, resources, and constraints. (The strict flow from one process to the next may be altered upon the reevaluation of a project or the choice of iterative methodologies such as agile project management.) Additional control procedures monitor the progress for necessary adjustments.

Figure 2.5 Life cycle of a project

Initiation Process

The main purpose of initiation processes is to ensure that all preparation work is fully completed before project inception and that all stakeholders are fully committed. The processes begin once executives, or other authorities, decide to launch a project to implement the idea as a formal initiative for the organization. It is during the initiation that the organization must encapsulate the idea to proceed to a project. Not only are the goals for the project established and codified during initiation, but the project is synchronized with the operations and policies of the organization. Even though the project runs with a good deal of autonomy, the organization still has set policies and traditional roles that must be honored for a project to proceed.

For this reason, it is important to define the relationships that exist between the project and the remainder of the organization. For example, if the organization has specific practices for quality control, those should be considered important structures to incorporate into the project. Specific roles in the organization define the relationships between the project and the organization. For example, if a project management office is established as the governing authority for projects, then the project must have its ties to the project management office firmly established. Integration with the organization is established through a hierarchy of contracts between the project and the organization that establishes responsibilities, outputs, and governance structures fully defining the boundaries of the project. For example, certain organizations might require simple charters that define these relationships while others might have a formal proposal process that would indicate how the project is governed. Always imperative is a statement of the project’s requirements.

In addition to establishing how the project fits into the organization as a whole, relational aspects of the project are also determined at this time. The organization appoints a formal sponsor or champion. The organization appoints a project manager. The goals or objectives are codified as a formal statement of output. Parameters on budget and completion time are established. The main activities of initiation processes include generation of the project authorization documents, confirmation of stakeholders, establishment of project management teams, defining the relationship between the organization and the project, assigning governance and monitoring responsibilities, and project initiation meetings with active stakeholders. Initiation tasks are conducted by governing members of the organization, the project sponsors, the project manager, and key members of the project team. Project sponsors and project committees, such as a steering committee or project management office, provide guidance and progress reviews.

This early in the life cycle of a project, only a few of the elements previously described are activated. In particular, stakeholder management is critical. Building relationships with and developing an understanding of the executives and sponsors is best done early. Other actors in the organization impacted by the output of the project should be identified at this stage and prepared to take their role in later stages. A high level of the combination element is critical. Even though we defer details of schedule and cost and quality to the later stages, the organization does have guidance concerning overall cost and completion time to gain advantage from the expected output. All these aspects must be considered simultaneously with an overall perspective, nothing in isolation. Table 2.1 highlights this overlap of elements and processes within the initiating stage, as well as the overlap for remaining elements and processes in later stages.

Table 2.1 Processes and elements of project management


Project management processes










Communication management





Planning Process

The purpose of planning is to ensure that all tasks are identified and ­scheduled to produce the promised deliverable. Planning begins by considering the output of the initiating stage. This is typical of a staged project plan where the output from one stage is the input to the subsequent stage. Thus, planning takes all of the organizational preparation and ­establishes a blueprint to arrive at the required output. Table 2.1 indicates that every element of project management is involved in the planning stage. An understanding of each element is required to develop the plan and allow for the monitoring of progress. For example, the project manager is responsible for developing a schedule that is used to control the progress of the project. Quality practices are established that are commensurate with those of the organization’s expectations for the output as well as the standards of practice the organization follows. In short, a plan describes project goals, risks, quality, resources, delivery time, budget, communication, procurement, and how the progress is monitored.

The relationship between the key players of the project team is further developed in this stage. An organization should establish a rewards program for the project team members. The rewards must encourage productive work. The project manager establishes behavioral expectations for the team and provides training as necessary to conduct activities of the project. Communication channels, contribution contracts, expectations of response time, and clear assignment of responsibilities all lead to a productive atmosphere for the project team. The project team must prepare for conflict among themselves as well as external stakeholders. Defined procedures to resolve conflicts are essential in maintaining continual progress.

An early step in planning is to choose the project management methodology, such as whether one will pursue a waterfall approach or an agile approach in the development of an information system. The project management methodology influences the elements. For example, work packages defined in the work breakdown structure differ depending upon the methodology chosen. As the segments defined by work packages change, schedules, costs, responsibilities, resources, and stakeholder management will all change.

Planning tasks are typically the responsibility of project managers and the project management team. It is during the planning stage when many of the traditional project management tools come into play. Gantt charts illustrate scheduling. Communication plans dictate the timing and content required to inform stakeholders of progress. Risk analysis highlights areas of concern to include indicators, mitigation, and contingencies. Ample commercial software and quality shareware exist to support the decision making of planning and document the output of the planning stage for use in successive stages.

Directing Process

The intense activity of completing the deliverable defines the directing processes, when the project manager directs the application of resources, assigns the division of labor, and controls the quality of project progress toward the final product. The plans from the prior stage provide the blueprint required to take the specifications of the project’s goal to completion with the deliverable that matches best the specifications. Project team members assume the roles defined and take the actions required. At all times, the project manager is concerned with every element in directing the team to the final product. Many of the same tools used in the planning stage will transit to the directing stage. The schedules built, the budgets made, the communication plans formed, and all of the other planning tools and documents assist the project manager and project team in successfully delivering the final product.

Closing Process

The closing processes represent the termination of the project. At this time, the product is complete. Though governance activities helped direct the project to successful completion, this handoff to other stakeholders can be problematic. If those who benefit from the product of the project are not properly prepared, then even the most successful project might not deliver a benefit to the organization. It is for this reason that stakeholders were involved in all the earlier phases to assure value will be realized.

The project team extracts value from an assessment of performance. Which processes in earlier stages were effective? How effective were the communication channels at keeping stakeholders informed? What organizational structures helped or hindered the progress of the project? Any lesson learned should be documented and placed in a knowledge base maintained by the organization. Any variance in completion to the original plans should be researched to determine cause and recorded as a possible risk to future projects. These tasks are conducted by project managers and project team members to capture knowledge for the organization.

Monitoring Process

The main purpose of monitoring processes is to ensure that all progress and problems of a project are effectively investigated, recorded, analyzed, assessed, reviewed, and processed. Monitoring is a critical feature of project governance and is established at the inception with details determined in the planning stage. Monitoring requires that a baseline be set for all features measurable, such as schedule, budget, and quality. The controls of monitoring may be frequently applied and spaced periodically. When indicators show a variance, the variance must be reconciled or corrected. It is possible that the correction might involve a rescheduling, conducting additional tasks, a redesign of the output, or even potential termination of the project.

As shown in Figure 2.5, monitoring processes sit over the three later stages of the project life cycle. The planning stage provides the baseline against which project progress is monitored and is a precursor to any monitoring activity. The controls placed in the directing and closing stages feed information to the monitoring processes for evaluation. The monitoring itself might lead to justifying actions of direction and closure through the feedback of information. The tasks related to project control are mainly conducted by project managers and project team members. However, responsibility for determining action based on feedback from the controls will vary by organizational structure and may include a project management office and sponsor.

Limitations of Traditional Project Management

Project management is a valuable productivity tool for organizations and appropriate for many contexts and applications. However, the improper application of project management to complex or uncertain goals can be disastrous. Advances in Internet and communication technology impact the speed of change for an organization, making projects of long duration problematic. Complexities lead to situations where management and control requirements exceed the capabilities of standard practices. Perhaps the biggest challenge comes from the fact that project managers are now faced with ever-greater uncertainty. These uncertainties include market uncertainties, organizational uncertainties, and even uncertainties brought about by obscurities of project goals and results. The question of how to manage projects with high uncertainty is a challenge faced by traditional project management. Other patterns have emerged over several decades that require an expanded view of how to deliver outputs in an environment requiring continual transformation to meet accelerating changes. For example, these patterns include:

  • Advances in information technology and increased prevalence of outsourcing tighten the connections between businesses requiring a response by transforming supply chains and fulfillment strategies.
  • Charles Handy (2001) wrote that business models would undergo great changes, and that future businesses would fall into one of two categories: “elephants” and “fleas.” Elephant businesses are those composed of different enterprises that form strategic alliances. Flea businesses connect independent workers as unique organizations in their own right. Organizational structures must transform to relate to the new environment.

Many environmental trends require some degree of transformation by an organization. The speed, magnitude, and complexity of the required transformation may be beyond the capacity of traditional project management. Changes to the market, competitors, and business partners of an organization are often unpredictable, with the subsequent uncertainty also proving problematic. Projects emerged as a productive way to produce a well-defined output and not an output that is ambiguous, uncertain, and even unimagined. As organizations must transform to meet greater uncertainty and complexity, we must expand the traditional approach to project management.

Discussion Questions

  1. Do your colleagues understand the difference between operations and projects? If not, how would you explain the difference using examples from your organization?
  2. What lines of communication must be opened between project managers and executives in an organization? What information do you believe should be exchanged?
  3. How does the concept of schedule change across the different project types in Figure 2.2?
  4. If the driving force behind a project is a well-defined deliverable, how can projects develop new products or services?
  5. Managing a project informs future projects. How might you ensure that the lessons learned reach across project boundaries?


Atkinson, R. 1999. “Project Management: Cost, Time and Quality, Two Best Guesses and a Phenomenon, Its Time to Accept Other Success Criteria.” International Journal of Project Management 17, no. 6, 337–342. doi: 10.1016/S0263-7863(98)00069-6

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