It is important for every business, regardless of its size, to run its operations as effectively as possible.
This is why project management is critical. Project management sounds easy. Just implement project management software and keep track of the projects, and you are on track. But it’s not!
Successful project management requires a team of individuals with different talents and skills who can plan and execute projects seamlessly.
The Project Management Institute’s Pulse of the Profession report found that around 89% of high-performing organizations value project management.
By not investing in it, organizations are wasting an average of US$97 million for every US$1 billion invested. This is a significant decline (20%) compared to the $122 million wasted for every $1 billion in 2016.
Moreover, according to the Project Management Survey 2017 by KPMG, 80% of organizations are using more than one project management methodology.
In 2017, more projects are meeting original goals, and companies are completing them within budget.
If you want to make your organization successful, implementing project management is a must. Here is how project management can help your business grow.
1. Prevent Cost Overruns
The biggest challenge that organizations face is completing a project within the assigned budget. In most cases, the actual costs of the project turn out to be much higher than the estimated costs.
The reason why is mainly because most companies fail to execute the project estimation process. They therefore fail to consider all possibilities when creating the budget.
A project is not successful if it exceeds the estimated cost, even if a team delivers it on time.Click To Tweet Cost management is, therefore, important.Cost managment is the process of estimating, allocating, and controlling costs in a project. It is an important element of project management, and companies should implement it at the conception level.
3 Strategies
In order to control the cost, project managers should consider the following:
- Continuous Budget Forecast: Managers need to continually review the budget to make sure the project stays within the estimated financial plan. Continuous forecasting helps managers to control small budget overruns and keep spending in check.
- Resource Usage Forecast: Regular resource usage forecasts help managers track the people working on a project and ensure maximum utilization of the resources. Having more people working on a project than necessary increases costs significantly.
- Manage Scope of the Project: The scope of the project often changes and these shifts are one of the major reasons for cost overrun. Project managers should constantly review the scope of the project and create change orders to ensure extra funding whenever necessary.
A crucial part of business where managers can cut costs is purchasing. A unified procurement platform such as SMART by GEP can help project managers integrate all sourcing and payment processes.
It can help them analyze compliance tracking, analyze spending in relation to other business functions, and discover opportunities to drive more savings. At the end of the day, every business needs to consider the bottom line in every decision it makes.
2. Have a Competitive Advantage
Most companies view project management as a process to gain control over on-going tasks. But they do not realize they can use project management to create a competitive advantage as well.
The question is how? Project management offers measurable results. So you get to know exactly where you stand and what you need to do in order to surpass your competitors.
The problem with most organizations is that they rely on historical financial data rather than forward-looking indicators. In this age of cut-throat competition, stakeholders demand quick improvements.
Companies can guarantee improvements only through correct performance measures and a structured project management approach.
Project management helps you accurately measure your most important metrics, such as budget, schedule, scope, customer satisfaction, quality assurance, risks, and ROI.
When they know exactly where they stand, project managers are in better positions to answer the questions of senior management, customers, and stakeholders. Through project management, you can ensure greater transparency and instill a sense of trust among stakeholders and customers.
Take the case of Intel. Project management was always part of their business management, but they were not committed to it wholeheartedly.
In the past, it was common for Intel to miss deadlines and struggle to meet customer satisfaction. There was a time when the average IT project duration at Intel was 88 weeks. Delivery dates had to be pushed back by a quarter or more in several instances.
Upon realizing how harmful it would be to continue in this manner, the IT department implemented the Project Management Office (PMO).
Since the implementation of the PMO, the company has seen a steady increase in the number of projects. At the same time, the budget remained steady and project delivery improved significantly. Intel is now one of the most well-known technology companies in the world.
3. Manage Changes Effectively
Changes are inevitable in any project. Often project managers finalize plans, but the scope continues to change.
Changes in scope occur due to a number of reasons, such as fluctuations in the market and user needs. Sometimes employees need to make changes in order to meet the objective of the project.
If the changes are not implemented properly, the team members might feel lost or there can be massive cost and time deficits.
For all of these reasons, the changes need to be quantified, analyzed, prioritized, and then implemented in the project.
Change management is the process that helps teams create strategies to implement the required changes at any level of the project.
How It Goes
The change management process includes the following steps:
- Receiving information about the change
- Assessing the change—this includes evaluating how much time a change will take or how much extra money you will need
- Preparing recommendations
- Getting approval from higher authorities
- Utilitizing advanced (but simple-to-use) project management systems, such as Workzone
Such project managment systems go beyond the basic commenting abilities of Basecamp and Trello. They allow project managers to capture change requests and implement them systematically.
Workzone’s approval-based workflow lets you monitor requests, record changes, and send alerts to appropriate team members. Gantt charts give a clearer view of dependencies and timeframes.
Change doesn’t just apply to a single project. It can impact an entire organization. For example, you might be running an ecommerce business and thinking about using third-party logistics.
If so, then treating the implementation of warehousing and shipping processes as a project will help. You simply analyze the risks, choose which organization to work with, and make the switch at the right time.
Satisfy users’ needs, create products that are appropriate for the current market, and cut costs. By doing so, you can ensure growth and success for your organization.
4. Bring Agility Within the Organization
In today’s fast-paced business environment, teams are under constant pressure to earn good revenue, satisfy customer needs, and build a brand that people can easily recognize.
In order to achieve business goals and stay competitive, companies must adopt agile development practices.Click To Tweet This is because agile development ensures faster development, better quality and cost control, higher revenue, and better risk management.Common agile frameworks, such as Scrum and Prince2, help organizations introduce agility within the development teams. But the Scaled Agile Framework (SAFe) that Dean Laffingwell created is built to synchronize collaboration and delivery where multiple agile teams are involved.
While agile methods sound easy on paper, implementation is a different ball game. Training is what separates the successful project managers from the ones who fail.
Knowledgehut offers an instructor-led SAFe certification that is ideal for organizations looking to quickly implement agile/lean practices at all levels and help clients across verticals.
By adopting an agile framework, organizations can turn wins into processes and set the stage for rapid growth.
In Conclusion
The success and growth rate of an organization depend on its level of efficiency and productivity. Project management can help companies improve both to a great extent.
Regardless of the phase your business is in at the moment, project management practices can mean the difference between its success and failure.
Whether you improve your resource utilization, productivity measuring, budget performance, or customer satisfaction, project management can be a one-stop solution for you.
I hope your find this article useful and are inspired to implement or upgrade your project management system.