Project management – the basics

Project management provides businesses with a method of planning, organising, managing and executing a specific task, objective or set of goals. It is widely used in IT and construction but can apply in any business.

A project is a temporary piece of work which falls outside ‘business as usual’ day-to-day operations and can be anything from moving offices or building a website to carrying out major construction work or complex statistical analysis. Some businesses are entirely project-based.

Proper management of a project can benefit a business in many ways, the most important of which are ensuring costs do not spiral beyond budget, that work is completed on time and to the right quality. Project management can keep things clear and efficient, and reduce threats to your business or project. It is essential in helping any business grow and is expected by many organisations when tendering for work.

This guide will help you to understand what project management is, why it’s used and explains the main terms and processes involved. It also links to downloadable templates or example documents. Templates and examples are also available from many other sources.

The advantages of project management and how it can help your business

Project management can bring many benefits to a business. Good project management should:

• reduce the chance of a project failing
• ensure a minimum level of quality and that results meet requirements and expectations
• free up other staff members to get on with their area of work and increase efficiency both on the project and within the business
• make things simpler and easier for staff with a single point of contact running the overall project
• encourage consistent communications amongst staff and suppliers
• keep costs, timeframes and resources to budget

As well as these general benefits, many government departments and international businesses require a specific benchmark or provable project management standard from businesses that are tendering for work. If a business can show a strong track record in this area or if staff have formal qualifications or accreditation to a recognised project management system, it is likely to benefit from a greater availability of opportunities compared to those that can’t.

You can find out more about the advantages of project management on the Association for Project Management website- Opens in a new window.

You can also find out about structuring a business by project on the page different business structures: by product and project in our guide on reorganisations, restructurings and other major changes.

If you are thinking of trying to gain work with overseas businesses see our section on international trade.

---

The basic principles of project management

While every project is unique in its own way, there are certain basics which define most project work. These are:

• objectives
• constraints
• lifecycle

Every project takes place in its own specific context – a project may be stand-alone, part of a greater body of work, or it could be one in a series of projects. It may bring together as a project team a group of people who have never worked together before or give responsibilities and roles to people who are new to them. All of these factors need to be identified and considered in order for a project to be completed successfully.

It’s important to remember that the level of detail you need at the various project stages should remain appropriate for the size and complexity of the project.

Defining your objectives

The main point of any project is to achieve specified goals and objectives. Once these objectives have been fulfilled, the project is disbanded, and in most cases, work handed over into normal operations. It is therefore vital to any project that the goals and objectives required are clearly defined, measurable and achievable. Without this, any project is likely to suffer from a lack of focus and an increased chance of failure.

Once objectives have been established, they should be clearly communicated and agreed with all staff and stakeholders on the project.

Understanding your constraints

A constraint is any factor which can limit or have an impact on a project.

Typical constraints are funding, the scope of the project, available resources and time. It is important to understand what the constraints of any project are in order to clearly define the boundaries in which project work must be done.

Projects which do not honour their constraints are often regarded as failures and tend to incur a significant cost to their business.

Lifecycle

Projects have a definite start and finish point within which their objectives need to be fulfilled. This is known as the project lifecycle. While this is usually defined by a start and finish date, the lifecycle of a project can also be defined by a finite resource such as money or a fixed amount of staff time available to the project.

Any successful project will deliver its goals and objectives while honouring its constraints, and by definition do so within the lifecycle of the project.

---

The basic elements of project management

Most projects can be divided up into five basic stages and processes. Terms that are commonly used for these are:

• initiation (‘kick-off’ or start)
• planning and development
• production and implementation (sometimes known as execution)
• monitoring and controlling
• closing

All projects will use these basic elements but at a level appropriate to the size and complexity of the project.

Initiation

Initiation is the formal start of a project and will usually be triggered by the issue of a Project Mandate which briefly describes the purpose of the project, and gives authority to spend money on initiating the project. The initiation stage is where work is carried out to assess what needs to be done and how best to do it with whatever resources are available.

Initiation is when the nature and scope of most projects are defined. By this point, if necessary, there should already be a project team in place, an outline business case, an understanding of the customer or stakeholders’ expectations and a risk log.

During this phase, work should be carried out to broadly plan and cost the project, to clarify, revise and justify the business case and generally define the ‘who, why, what, when and how’ of the project. The criteria confirming project ‘closure’ – the end of the project – should also be determined at this point.

Commonly, this information is captured in a document that’s often referred to as the project initiation document (PID) or project definition, which can be the key product of this stage of the process.

Download a project initiation document template (DOC, 44K)- Opens in a new window.

Planning and development

After the high level planning done during initiation, a more detailed phase of planning and development usually occurs. The result should be a clear specification for what needs to be done, who by, and when.

The main focus should be on ensuring that time, cost and resources are sensibly managed and available, and committed to the project. This enables you to create a project plan and schedule, which is a key product of this stage of the process. Risk and resources for resolving unforeseen issues, as well as progress checkpoints, should also be factored into the plan at this stage.

Once this has been done, you are ready to start spending the main part of the project budget. You should gain formal approval to begin the work, if necessary, now that you have a better idea how much it will all cost.

Production and implementation

The production and implementation stage is when the project plan is put into action by implementing the processes outlined in the previous stages. At this point any deliverables are produced (where applicable) as defined by the project plan. For example, if you had a project to produce a new promotional pack for a trade show, early deliverables might be to complete all of your product photography, and gather product information and prices.

At this stage, it is important to ensure that the project remains focused on its objectives and that any factors which could affect the execution of the project are closely monitored.

Monitoring and controlling

Throughout the production and implementation stage the ongoing progress of the project must be monitored. Progress must be controlled and any issues which arise as a result of the day-to-day work must be dealt with.

Project performance should be regularly observed and measured against the predicted expectations of the project plan, as well as any quality measurement mechanisms also in place.

Closing

Closing is the last phase of any project and is when the work done is formally accepted and the project is dissolved. Closure does not necessarily mean success, but simply the final point of the project – when failed projects are cancelled, for instance, they should also be closed.

Commonly, closure involves the finalisation of all activities across the project and a handover into business as usual if this applies. This should be accompanied by a project review or ‘lessons learned’ exercise and the archiving of any relevant project documents, which can be used to feed into and improve any future projects and plans.

---

The basic mechanisms involved in project management

While every project is unique in its own way and may need specific tools to succeed, there are some basic mechanisms which are commonly used to manage projects.

Defining your scope

The scope of a project is everything that the project (team) will change, deliver and is responsible for. The processes of delivering the project scope should be factored into a project plan. The scope is usually clearly defined by the planning and development phase of any project.

Download a project scope document template (DOC, 36K)- Opens in a new window.

Creating a project plan

A project plan is a detailed proposal for doing or achieving the objectives and goals of a project.

A project plan should detail the ‘what, when, how and by whom’ of any project and is a key resource to successfully managing work. Project plan templates can vary depending on what you are trying to achieve, but there are many examples available for free or from professional bodies.

You can also use a software program to compile a project plan although this is probably best suited to large or complex projects. A simple tool such as a year planner or calendar can be effective for working out the timeline and showing the various dependencies for a smaller project.

Never let the process of managing the project take more time than the project merits.

Download an example of a project plan for a premises move (DOC, 191K)- Opens in a new window.

Identifying and logging risks and issues

Risk and/or issue registers are common tools for identifying, analysing and managing risks (something which has not yet occurred) and issues (something which has already occurred).

Using these registers, project teams can estimate and adjust their planned activities, taking into account risks and issues, thereby managing their impact.

For more information on risk management, see our guide on managing risk.

Download a project risk register template (XLS, 22K)- Opens in a new window.

SWOT analysis

A strengths, weaknesses, opportunities and threats (SWOT) analysis is a commonly used strategic tool to evaluate a project or a business. In relation to a project, the analysis can be defined as:

• strengths – factors within the project or organisation that are helpful to achieving objectives
• weaknesses – factors or constraints to the project or organisation that are harmful to achieving objectives
• opportunities – external conditions that are helpful to achieving objective
• threats – external conditions which could hinder achieving objectives

You can find a SWOT analysis template on the businessballs website- Opens in a new window. For information about other forms of strategic analysis, such as PESTLE, see our guide on strategic planning.

Creating a project library

Depending on the complexity, length, and number of people and parties involved in a project, keeping track of and allowing access to the relevant documentation can be vital to ensuring a project is successful.

Without a proper, centralised system of logging and storing of information about a project, important data can become lost or inaccessible very quickly, with a risk of poor version control meaning that there may be both a duplication of effort and conflicting iterations of project documents in circulation.

It is therefore worth considering creating a project library so that each individual or party has easy access via a single point to the most up-to-date information about the project. You should make sure that these documents will be accessible in the future – eg in a shared file rather than on an individual’s computer.

Closing a project

At the end of a project it’s always worth carrying out a ‘lessons learned’ exercise. This isn’t just to record what went wrong or to congratulate yourselves about what went well. It should provide a valuable reminder of things that worked efficiently, what was less effective and why, and what this teaches you so that you are better equipped to undertake another project in the future.

It’s worth asking the opinion of everyone on the project team under a set of headings. You could use the ‘KISS’ approach for example:

• keep – ie this was effective and you should definitely use it again
• improve – this was good but there were areas that could be done better
• start – things you didn’t do but now realise you could do in future projects
• stop – things that should not be repeated

Download a project review lessons learned template (DOC, 35K)- Opens in a new window.

---

How to identify and work with a project manager

The project manager is the focal point of any project and a vital link between staff, stakeholders and the project steering group – also sometimes referred to as the project board. The project manager is responsible for making sure that a project is planned, developed, implemented, controlled and closed.

It is becoming more and more common for professional project managers to be used outside their traditional industries of construction, architecture and IT. In many smaller businesses an existing member of staff can also take on the role of a project manager alongside their existing duties.

When looking to appoint a project manager, it is important to consider the needs of a project and how much time is likely to be required to manage it. Bear in mind that a project manager does not usually directly participate in the activities which produce the end result, but drives progress and manages the processes of the project instead. Therefore, a gifted designer may not be a good choice to manage a design project as this may not be where their strengths lie.

As well as having generic management skills, a good project manager should be:

• confident and able to engage with and build relationships both internally and externally
• flexible and able to balance and prioritise often conflicting project constraints such as time, quality and cost
• well organised and diligent when it comes to time management and paperwork

If a project is fairly small, then it is common for an existing manager to take on the temporary role of a project manager, either as a secondment for an agreed amount of time, or alongside their day-to-day role.

If the desired skill set is not readily available to a business either from existing staff or through the training of staff, then you should consider hiring a project manager either for a specific project or on a longer-term basis. This could be a on a freelance or fixed-term contract if you’re not likely to require a full-time position. For a more in-depth look at sourcing and recruiting new staff, see our section on finding new people.

The project management sector has developed processes, tasks and terminology that you may not be familiar with. If you’re new to working with a project manager, make sure you ask them to explain any unfamiliar terms or even to avoid using such jargon from the outset.

---

Checklist – project management

There are many things to balance when managing a project and every project will have its own issues and procedures that need to be considered. This checklist outlines some key things to think about. It’s important to keep any planning, documentation and processes proportionate to the size and complexity of the project.

Start-up and initiation

• Is there a project mandate, brief and business case?
• Have you checked the ‘lessons learned’ from previous projects?
• Have expectations and required outcomes been agreed between all relevant parties?
• Has an approach been defined?
• Have the project objectives and scope been stated?
• Have weaknesses, constraints and risks been identified and recorded so that measures can be taken to reduce or remove them?

Organisation

• Is there a need for a project board or project group and if so, have roles been identified and duties agreed?
• Is there a project manager? Do you have the necessary skills in the business or do you need to think about taking on someone new?
• Is any training required?
• Have the roles of any external parties – suppliers – been clearly identified and discussed?

Planning and review

• Is there a project plan?
• Have any assumptions and timelines been compared to previous, similar projects and confirmed by everyone involved on the project to make sure they are realistic?
• Has time and effort been factored in to analyse any project issues arising during the project and to manage the project itself?
• Are checkpoints or milestones being met on time and is progress being reviewed on a regular basis?
• Is there a need for a document and/or audit trail and if so, has this responsibility been agreed and a system put in place?

Closure

• Is there a need to hand over work and responsibilities once the project is closed? If so, have the relevant people been identified and made aware of the ‘what, when and how’ they will inherit?
• Has a method of making information available once the project has closed been identified and agreed?
• Have you carried out a project review or ‘lessons learned’ exercise?

---