Introduction
Project management refers to the knowledge and experience involved in the formal management of projects (Woodward, 1997). Projects of any organization are varied and range in different aspects and categories; these projects may include: introduction of a new comprehensive computer system for the store, establishment of a new branch, creation and production of new products, re-evaluation of a production plant, and research and development innovation research. Simply, project management is applied on whatever endeavor or action the organization may pursue in the future.
Yet, MPUG World (2013) defines project management as the systematic process of planning, organizing, executing, controlling, and completing a project. In this definition, it must be understood that the systematic process must target only specific projects of the business, rather than the day-to-day operations. A project involves time, cost, and scope of the business, but it does not have to be part of the regular operations of the business. The project should target a specific area of the business and must be definite in its term or execution period. As such, the project must have a specific beginning and a clear end, rather than an unclear life cycle that only puts the project hanging on unnecessarily long leading to loss to the company, if the project fails.
In essence, project management follows three important phases. First, the project undergoes the project strategic phase, wherein all activities and actions of the project approval and funding are completed. Second, the implementation phase details the "initiation, planning, detailed design, documentation, execution, and commissioning activities (Morris & Pinto, 2010, p. 144)." In this phase, the project is put into the blank and white paper then implemented in first hand with the aid of proper delegation and actions. Lastly, the project operation phase includes the day-to-day operation of the project implementation which culminates with the evaluation and eventual recycling of the project life cycle to supplement the strategy or direction taken by the organization.
This paper seeks to review how a company regards project management as part of the business strategy and what actions are taken by an organization to ensure the success of the project management. There is a correlation between time, cost, and quality on the objectives of the project and to the utilization of various techniques that are used to keep a balance between these objectives; by examining the technique used to achieve this purpose, the project management of the organization is also evaluated critically and correctly.
Body
Primary Objectives of Project Management
According to Rider Levett Bucknall (2013), the primary objectives of the project management is to produce goods or provide services with the highest quality at the lowest possible cost within the shortest allowable time. This means that these three components are important factors or considerations in planning a project. It could be that a project may have the highest possible quality, but it also costs much for the company. The goal of any project management is to keep these components and objectives working together and in direct relationship with each other to achieve the best result for the organization. However, Lock (2007) noted that although it is the task of the project manager to keep these three objectives active and in balance for the project management of the organization, the reality remains that it is necessary for the organization to choose which of these objective is of special importance and to focus on that. Lock (2007) asserts that these objectives form a triangle, wherein the project management chooses what should be at the top.
For Rider Levett Bucknail (2013), it is necessary to keep a balance between these objectives to meet the requirements of each project. In the planning of the project, scheduling is an important factor; this ensures that the project goes as planned and that delays are properly addressed to avoid direct impact to the entire implementation and completion of the project. In the same manner, it is also very essential to keep the cost under scrutiny to avoid over-spending which may render the project fruitless. To achieve this, communication between the project team and the financial department must be kept open, rather than allow the project to overspend and just evaluate results later. And of course, according to Rider Levett Bucknail (2013), control control must be implemented all throughout the progress and completion of the project.
As noted above, these three objectives of project management have their respective relationships that dictate the direction of the project's success. First, the quality-cost relationship. According to Lock (2007), it is never a strategy to downgrade the quality of a service or product for the sake of cost and time. In fact, it is always necessary to place quality in the top corner of the triangle of objectives of the project management. This means that cost comes only in priority when quality is not compromised; otherwise, the project should always give high regard to quality over cost.
Yet, in terms of time-cost relationship, the balance must be kept. It should clearly understood that time is always equated with money. For instance, in a construction project, when the project is delayed for certain days due to structural defects or natural causes, the cost is overspent. Time is an essence especially if the project's financing is from loan wherein interest is being applied over time. On the other hand, for the time-quality relationship, it is necessary to give priority to quality while keeping track of the timetable of the project. This is the reason why during the planning process, it is necessary to schedule the project implementation accordingly.
Useful Techniques in Project Management
The successful execution and implementation of the project becomes the bedrock for the success of the same. There are various techniques and modeling patterns that are used to supervise and keep a balance between the three components or objectives of the project management. These tools are used to schedule activities of the project, set-up the priorities, foresee the financial results, and even detail the quality of the project results. Critical Path Method
First, the critical path method (CPM) or critical path analysis provides a diagram or model for the prediction of the duration or length of the project (Schwalbe, 2010). This is a technique used in project management to ensure that the project does not overrun its schedule. This tool looks at the possible ways, approaches, and series of activities that should be taken by the organization to determine the shortest possible time to complete the project. By putting series of activities into test of duration, the project is completed at shortest time to avoid overspending.
Mainly, the first part of the CPM is to develop the network of activities that are included in the accomplishment of the project. The project manager must keep all details of the project listed in the network of diagram, especially alternative routes of activities that can be done to replace certain activities that may lengthen the project completion. Second, each activity should be provided their own time-frame or duration. After which, the project manager takes the tasks or activities into a series to see what must be done first and so on.
Yet, it must be noted that CPM only provide an overview of the time dimension of the project, it is not a complete list of all critical activities that should be done. This is the reason why it is necessary for the project manager to take corrective actions when activities already slip their schedules. By doing contingencies and correction actions, the project will be placed back to its original path and avoid schedule overrun, which is the eventual reason of cost bursting.
Payback Method
Moreover, to calculate the financial value of the project management, there are several methods that can be used, namely: internal rate of return (IRR), net present value (NPR), and payback method. Payback method provides an analysis on how the organization can recoup the investment, but this method does not calculate the return of investment. Simply, payback method just looks at the current investment and seeks to calculate the number of years or the period by which the organization can get the capital of the project (Broyles, 2007). Yet, the definition of payback method does not also include the operation cash outflows, but the initial cash outflows of the organization to complete the project.
Moreover, to calculate the financial value of the project management, there are several methods that can be used, namely: internal rate of return (IRR), net present value (NPR), and payback method. Payback method provides an analysis on how the organization can recoup the investment, but this method does not calculate the return of investment. Simply, payback method just looks at the current investment and seeks to calculate the number of years or the period by which the organization can get the capital of the project (Broyles, 2007). Yet, the definition of payback method does not also include the operation cash outflows, but the initial cash outflows of the organization to complete the project.
When an organization spends money to complete a project, the question is always when to get back the capital or the investments, the profit of the investment is only second to the priority. Payback method calculates the initial investment payback and tries to foresee the risk exposure of the said investment on the particular project. For instance, if the construction company invested $1 million on a real estate project, and the expected turn-out of rentals would be $100,000/month, the payback period for the $1 million initial cash outflow is five 10 years.
Calculating the payback period is a very important part of the project management to ensure that the schedule of the project completion is relevant to the recoup of the investment. Otherwise, the organization may have some problems in paying its loans, and the interest thereof. Total Quality Management
Lastly, and is considered the priority of the triangle of objectives, total quality management (TQM) refers to the quality of the project (as in the process), and the quality of the project result or product (Newell, 2005). According to Newell, it is necessary to separate the quality of the project from the product. This is to ensure that quality measurements of the project process and procedures will yield to a quality product which will be tested according to its application, thereby creating a check and balance between the two.
Quality management does not start in the implementation phase of the project, but on its initial strategic phase. It is important for the organization or the project team to use quality management measurements that will test the plans, according to the relative important of quality to the other objectives of project management. Of course, as discussed above, quality stands supreme to all other objectives of project management, but quality depends on the availability of finances and scalability of the schedule being drafted. When finances are scarce and the project manager had to beat the schedule of the project, quality may be compromised. To avoid these situations, it is important for quality to start from the top and then to descend below.
In terms of the quality of the project procedure and implementation, quality audits must be performed at certain points or areas of the project. These audits will try to keep the project attuned to the measurements of quality. It is advisable for organizations to do random quality audits to internally evaluate itself in a more realistic manner. Random audits will clearly identity which areas were not well treated or done. The result of the quality audit provides an overview on the quality of the project.
Advantages and Disadvantages of the Techniques in Project Management
According to the summary of St. Norbert College (2004), critical path method (CPM) helps to schedule, monitor and control projects. It details the actual dates of each activity, therefore giving the project manager an easier way to compare the planned schedule to what actually happens. With the aid of this simple comparative technique, the network of activities that should be done is followed properly to avoid slackness and float times for the project. And of course, with the aid of CPM, indirect and direct cost overspending is avoided.
However, CPM becomes too complex and complicated for larger projects, especially if the project last longer period and includes chain of activities that should be done simultaneously and subsequently. As the result of this complexity, resources might not be properly allocated and used, and the project success is defeated in the process.
On the other hand, the main advantage of payback method is its ease of use. There is no unnecessary calculation to do in order to find the return of the initial investment. This provides the project manager a good view and answer to the question when the invested capital will be paid back. The good thing of this technique is that the simplicity is still useful to big corporations. However, the bad thing is it does not include the value of money. It presents unrealistic claim that the investment or the project has already returned the capital because there are cash outflows made to operate the project, yet payback method does not include that in calculation, leaving room to question whether the business has really get back its investments or not. As such, for organizations that are looking forward to see their money in real time return, IRR and NPR are widely used. These two methods provide calculation to the return of investments with consideration to the interest value of the investments.
Overall, total quality management is beneficial to the organization, as discussed above, however, the question is on the approaches. First, if the company will use inside experts to do the quality audits, it will save the company from cost, but it will also present the audit in bias conditions. As a result, the TQM reports become unreliable and undependable to be used by the organization itself. Yet, if the organization hires outside sources, the cost may go too high (Pekar, 1995). Yet, this will ensure that the perception and the report is unstained with biases. It makes the report more credible and the organization can give its whole trust on the paper being provided.
Conclusion
When an organization sees an opportunity for growth, it creates a team to handle that area. This creates a project area which can be used for future profit-generation. However, before this project becomes a milking cow for the organization, it is necessary to ensure that all things go well to avoid losses and failure of investment. Project management starts in the conception of the idea or in the acknowledgment of an opportunity for growth. When that idea becomes a full blast plan, implementation becomes a problem. There are several areas to consider and there several factors that may cause downfall or failure to the project.
As much as the project becomes an important part of the organization, it is necessary to use techniques to ensure the project's vitality to the company. The critical plan method, the payback method, and the total quality management are just few of the tools that can be used by the organization to ensure that the three objectives of the project management are met and kept at balance. For an organization to success in its project, it has to determine what's the most important concern to it. It is necessary to see how quality affects time and cost, or how cost affects quality, and time to cost. These are stringing questions and issues that are always at the top when it comes to projects. Project management ensures that these issues and questions are addressed to avoid high risks.
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