Projects are temporary, no matter how many years they last. This is because projects exist to solve particular problems and achieve specific goals efficiently.  

As Joseph M. Juran rightly put it, “A project is a problem scheduled for solution.” 

The size of the project is thus determined by the nature of the problem it is intended to solve. That said, the benefits of project management in organizations go beyond merely keeping within the project’s allocated resources, including timelines, cost, deliverables, and scope. The difference is in the value and efficiency that project management delivers. The project manager is in full control of the project and works to keep all stakeholders on the same page. This accords project teams the opportunity to collaborate on tasks and own the project’s vision and align with it in the course of executing their tasks.

Read more: What is a Project Management Plan and How to Create One?

Definition of Project

A project is a combination of set objectives to be accomplished within a fixed period. They are an excellent opportunity to organize your business and non-business goals efficiently. The changes made in the project completion process are expected to perform better. When you work on an office project, it requires experts from different departments to come together. When you are working on a school / college project, you collaborate with fellow students to meet the objective. While working on a personal project, you will be coordinating with your family or friends to accomplish the set objectives. Therefore, we can say one individual can own that project, but it is a group activity. 

Importance of Project Management 

The importance of project management cuts across different businesses and industries. While the goals and objectives can be achieved in any setting, they are better and more efficiently achieved within a project management structure. Initially, project management was reserved for special projects, for instance, delivering new and/or innovative products or initiating a digital transformation. Today, more organizations, especially the large ones, are adopting project management for the more routine operational tasks to accomplish them more efficiently and deliver higher value.  

Project management involves proper planning, execution, and monitoring. It helps in increasing the chances of achieving optimal results for pre-set objectives. It enables project managers and other stakeholders to analyze the importance of any particular project for an organization and utilize business resources appropriately. In essence, project management helps set the scope, budget, and process of a project accurately.  

Characteristics of a Project

What qualifies an undertaking to be a project?  

You may have already worked on a project without realizing it. 

Here are the seven characteristics that define a project. 

  • Projects Are Bound by Time 

As we have already seen, projects are temporary in nature. It means that all projects have defined start and end times within which the project concept is birthed, planned, executed, and delivered. Once project objectives have been met, the project comes to a close. In addition to the time resource, projects are also bound within the constraints of scope, quality, and cost. Project goals are thus formulated within the available resources. 

A few times, however, projects have been terminated before their planned end-time or before their goals have been achieved. This often happens when it becomes clear that the project is no longer viable. 

  • Projects Are Purposeful 

The Project Management Institute (PMI) defines a project as a pool of human and non-human resources in a temporary undertaking to achieve a specific purpose. 

Projects are initiated to accomplish specific objectives against the available resources. After the project’s purpose has been achieved, a project will be brought to a close. The insights that have been drawn from it are documented for reference. As the project progresses through the predefined phases, monitoring and evaluation are done to ensure that the project’s cause for existence and objectives are fulfilled accordingly.  

  • Projects Progress Through a Life Cycle to Accomplish Goals 

The project life cycle represents the different phases that a project goes through from start to completion. All projects typically go through four phases which are: 

  • Initiation 
  • Planning 
  • Implementation 
  • Closure 

Just as projects are limited to available resources, different phases in a project should have resources allocated to them in advance. A project’s requirements may change, which is bound to impact the resources allocated to it. For this reason, project managers ought to ensure that the project is practically flexible to accommodate changes and still remain viable.

In addition, each project phase has part of the resources exclusively allocated to it to enable effective monitoring and evaluation.   

  • Projects Are Unique

By PMBOK Guide standards, projects are temporary and undertaken to create a unique project service or result. Projects are unique in purpose, goals, location, structure, resources, activities, and other project variables to make each project different from the others. 

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  • Projects Are Channels Used to Venture Into the Unfamiliar 

Every project has a level of risk and uncertainty. It is because not much is known about the outcome of activities through the project life cycle until they are actually executed. Hence, projects are usually based on projections of outcomes. However, the level of risk differs from one project to another. This will depend on how well the project is planned and steered through the project life cycle phases, resources available, or the toolset adopted to execute the project, among other factors.  

  • Projects Require Cross-Departmental Collaboration 

Projects require teams or individuals with different skills, roles, and responsibilities in various departments to collaborate to achieve a common purpose or solution. Collaboration presents immense benefits in project management as it pools together valuable ideas, skills, and expertise needed to deliver value. 

  • A Project Is a Single Entity

Even though a single project will bring together diverse skills, functions, roles, participants, and even disciplines, it remains a single entity. This is because all these components unite towards achieving the project goals. 

Projects vs Operations 

Many undertakings that often pass off as projects are more often not projects but operations. This is due to the fact that they do not possess the qualities listed above. 

As illustrated in the table below, operations are usually ongoing undertakings without finite timescale and are not unique owing to their routine nature. 

Projects 

Operations 

Temporary 

Permanent (ongoing)

Delivers unique output (Product or service)

Delivers the same output continuously

Innovative in nature 

Repetitive in nature 

Exists before a product 

Exists after a product 

Transformational 

Enhances the performance of normal practice 

Project Boundaries Explained 

A project boundary is a definition of the limits and exclusions of the project work. Project boundaries are listed as project boundaries identification in the scope statement. 

Boundaries are important for the project as they will state the things applicable to the project and those out of the project’s limits. This helps the project manager to determine the content of project activities. 

Factors to be considered when identifying project boundaries include:

  • Project goals and objectives 
  • Project/product scope
  • Project phases 
  • Project resources 

The Nature of a Project

The nature of a project is optimistic. It is the hope of any project manager that the goals set out for a project will be accomplished and the output results in the betterment of a firm/individual. Projects vary by size, industry, objectives, organization, and output. 

However, the nature of every project, large or small, is to pass through a pre-planned life cycle right from initiation to its completion. 

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The Project Life Cycle

A project process is divided into five main phases, collectively known as the project life cycle. Given the amount of work that goes into planning an entire project, it is more practical to break the project into phases for effective execution and monitoring. The project life cycle provides a framework within which the project activities and resources are organized into a logical execution sequence for optimal utilization of resources and ultimately the best outcome.  

Each project phase is goal-oriented and will include:

  • A list of activities that need to be accomplished during the phase 
  • Details of team members and their roles 
  • Project deliverables 
  • Resources allocated to the specific phase of the project 
  • Performance monitoring guidelines

Phases of the Project Management Life Cycle 

Here is a breakdown of the phases of a project life cycle. 

  • Project Initiation Phase 

The project initiation phase marks the onset of projects. Typically, a project will be initiated in response to an opportunity that needs to be explored or a problem to be solved. By then, a cost-benefit analysis should have been conducted. 

Part of the cost-benefit analysis includes conducting a feasibility study, defining the project scope, establishing the project deliverables, and the stakeholders involved to build a business case. 

In this phase, the project charter becomes the most critical document as it outlines:

  • The vision and mission of the business 
  • Goals of the project and the value it will deliver to the business 
  • A list of all the stakeholders involved in the project 
  • Project deliverables 
  • Project scope and budget 
  • Anticipated risks 

Once all these details have been verified and the project approved, the project officially kicks off, project teams assemble, and planning begins.  

  • Project Planning Phase 

During project planning, it is essential for the project manager to understand the project requirements and objectives. The planning phase is the most critical stage for any project as planning impacts the project’s risk and outcomes.  

During the planning phase, a project plan is developed to provide all stakeholders with the roadmap for the project. It outlines all the activities, tasks, timelines, roles, costs, milestones, deliverables, and other dependencies required to execute the project successfully.  

The project plan is crucial during the execution, monitoring, and closing phases of the project as it details not only the project goals and objectives but also the ‘how to’ and the ‘who does what’ during implementation.

The following documents are prepared during the planning phase:

  • Scope statement 
  • Work breakdown structure (WBS)
  • Project plan 
  • Project schedule 
  • Change request management 
  • Communication plan
  • Project quality plan 
  • Acceptance plan 

  • Project Execution Phase 

Project planning and execution are two of the essential phases in achieving the goals of a project. The execution phase is typically the longest and takes up the biggest allocation of resources as the actual implementation of the project is done. At this point, controlling the project’s resources, monitoring the project’s progress, and maintaining clear communication among all the stakeholders becomes crucial. 

The project team uses the WBS and the project schedule to execute the tasks outlined in the project plan. Also, frequent team meetings are held to report the project progress, evaluate variances in the project, as well as address change requests, and update the project plan in case of any. 

The project manager ensures that he keeps all stakeholders up to date on the project’s progress through status reports. Communication should be appropriate as indicated in the communication plan. 

Once the deliverables have been produced, the final product delivered and accepted by the customer following the acceptance criteria, the project is ready for closure. 

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  • Monitoring and Controlling Phase 

Even though monitoring and control are intended to check the entire project management process, it is handier during the execution phase. Monitoring and controlling are done to ensure that the project moves in the right direction and within the defined scope. When the project progresses as planned, the risk is minimized.  

Ideally, monitoring the project’s actual performance is compared against the planned performance and the appropriate course of action taken in the event that there is a variance.

  • Closing Phase 

The project is closed after it has achieved its goals and the product is ready for release and delivery to the client. This last phase is also known as the follow-up phase, where the project manager and the teams come together to discuss the project events and insights in a closing meeting. They will recap the entire life cycle to draw lessons and takeaways from it, identify strengths and opportunities for improvement, and document them alongside other project data for future reference. 

Sometimes, the project is closed before completion, mainly due to failure. 

A Project is Considered Successful When 

Simply put, a successful project is one that is completed on time, within the budget, and having achieved its objective(s). 

Here are seven pointers of a successful project. 

  • Completed on time or before time 
  • Executed within the budget 
  • Objectives are met 
  • Meets or exceeds the expectations of the stakeholders  
  • Arising issues were addressed proactively 
  • Output is beneficial to the user 
  • Positive feedback from the project execution team about how the project was run 

Types of Projects in Project Management 

Though many projects share the same characteristics, they are never the same. As such, they fall into various categories based on different factors. It is important to classify projects as this helps the organization highlight its features and come up with the most appropriate approach to execute them.  

Types of Projects According to Their Source of Funding 

  • Public projects whose source of funding is the government or government institutions 
  • Private projects that are privately funded by the business or venture capital financing 
  • Hybrid projects whose source of funding is both private and public 

Types of Projects Based on Project Content 

  • Construction projects are those whose output is an artifact, for example, an IT system development project.  
  • Business implementation projects aimed at introducing a new/improvement feature or change in the business systems or processes.  
  • Research projects are carried out with the aim of seeking knowledge or insights for decision-making. 
  • Procurement projects that establish B2B relationships for the sourcing of products and/or services. 

Types of Projects Based on the Time it Takes to Implement Them 

  • Normal projects are those projects that have adequate time allowed to conduct them; as such, they will pass through the project life cycle to produce the expected quality output. 
  • Disaster projects are impromptu projects involving very high capital injection with minimal execution time. 
  • Crash projects are those projects that incur extra costs to be executed within a short period and project phases will typically overlap. 

Types of Project Management Methodologies

Some main types of project management methodologies are:

  • Waterfall Project Management: This style implements the project process in waves, and each step is dependent on its successor.
  • Agile Project Management: It involves working in smaller iterative processes and often involves project pivoting.
  • Scrum Project Management: It is a faster process and very beneficial for smaller firms. It is done to achieve results quickly. Click here to know more about scrum project management.
  • Kanban Project Management: It is a variant of Agile Project Management and is best for large organizations. The tasks are simulated with processes to reduce the number of tasks over time.
  • Lean Project Management: Lean Project Management works the same as Kanban Project Management, plus it focuses on customers too. It makes sure that the project is implemented so that the timely delivery of services/goods can be made to customers.

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Examples of Successful Projects

Some examples of successful projects are:

  • The UIDAI (Unique Identification Authority of India) was established in 2016. This project was initiated in 2009, and its goal was to bring India's 1.23+ billion citizens under the world's largest biometric system, Aadhaar.
  • American Airlines faced problems in technology overlapping when they merged with US Airways. They adopted a project to adapt to the changes and capitalize on their employees to better the business to manage this change. This project helped them a lot to grow.

Benefits of Project Management Software for Better Project Management 

The purpose of project management software is to help project managers with planning, scheduling, resource allocation and control, change management, document sharing and collaboration, quality management, and more project management functions. The project management software is basically an administration tool that helps project managers execute their duties through the different phases of the project life cycle.  

Looking forward to enhancing your project management skills? Take our project management certification course today and take your project management career to new heights.

Frequently Asked Questions 

1. What is Change Management in Project Management?

Companies will, from time to time, introduce new systems or processes as outcomes of initiated projects. These changes affect the usual way of operations and often have an impact on human resources. Change management is thus a structured way of managing these changes to help people transition from the previous to the new status by positively adapting to the new systems and processes. This enhances business performance and helps the organization attain its strategic goals. 

2. What is Agile Methodology in Project Management?

An agile methodology is an approach through which a project is broken down into several phases to be executed iteratively. This approach emphasizes the continuous development and improvement of product features through incorporating feedback after every iteration and changes in requirements to deliver high-value products. 

3. What is Cost-Benefit Analysis in Project Management?

Before a project is initiated, it is important to perform a cost-benefit analysis for the product or service being built. A cost-benefit analysis (CBA) is the process by which an evaluation is done to check the costs of an undertaking versus its benefits. Using the CBA, all possible expenses and benefits of the undertaking are listed then the following values are calculated to ascertain its viability.

  • Return on investment (ROI)
  • Internal rate of return (IRR)
  • Net present value (NPV) 
  • Payback period 

4. What is Cost Management in Project Management?

This is the process by which a project’s costs are planned, budgeted, and controlled through the various phases of the project lifecycle. This enables the proper utilization of resources and the project teams to achieve project goals within the cost allocation put in place. 

5. What is Cost Variance in Project Management?

Cost variance refers to the comparison between the planned and actual project budget. This is done by calculating the difference, in other words, variance, between the BCWP (budgeted cost of work performed) and the ACWP (actual cost of work performed).  

Watch the video below that will help you understand the basics of project management.

Conclusion

Project management is a broad multidisciplinary yet specialized field that employs temporary undertakings to initiate profitable change to the organization. It is certainly one of the most exciting and fulfilling careers to pursue. You can learn all about 'what is a project' and project management with project management certification courses from Simplilearn. To take your career to the ultimate level, you can apply for our PG Program with the University of Massachusetts, where you will learn tools and digital skills that will help you lead and manage complex transformational projects and become a digital-age project leader. Start the amazing learning journey now!

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  • *According to Simplilearn survey conducted and subject to terms & conditions with Ernst & Young LLP (EY) as Process Advisors