Business Project Management
Introduction
Project management, according to the Project Management Institute (2013), is the "application of knowledge, skills and techniques to execute projects effectively and efficiently." In this process, the organization ties up the project to the business goals to develop strategic competencies that will keep them compete in the market. The project management is made up of processes, stages, and phases that are combined to work together for an effective control of a project or a program from its conception to completion (Cagle, 2005). As a process, project management details the plan, the procedure on how to accomplish the plan, the evaluation of the plan, the control of the execution, and the completion of the said project. It does not just focus on the basic planning of the project, but project management looks at the entire steps toward the completion of the project to ensure that the project is within the limits and targets of the business objective.
A project is a program or business activity that involves time, cost, assets of the organization, and direction of the business. In this sense, project management can only be executed on activities and plans within the definition of project. A project should always have a definite period of execution and should not be part of the daily or regular operations of the organization. Rather, it is a specific set of action that aims to provide a supplement to the daily operations of the organization, with the intent of making the organization more marketable and competitive.
Body
Balance Among Objectives of Project Management
Organizations set up projects with objectives clearly stated. These objectives guide the organization in meeting demands of actions and unexpected situations. These objectives can be categorized or narrowed down into three: time, cost and quality. Quality, according to Harrison & Lock (2004), quality or specification "should define what outcome is expected from the project (p. 4)." Quality notes the elements and specifications that should be met by the project in order to provide benefits that customers expect.
Second, it is necessary to contain the cost of the project for a smooth run and operation without hurting the finances of the organization (Mishra & Soota, 2005). Most projects are implemented to generate profit; for non-profit organization, it is all about fund-raising to keep the uptight budget of the organization. Yet, for general organizations, keeping up with the authorized budget is an important issue (Harrison & Lock, 2004). It is necessary to work out the project plan within the allocated budget of the organization; otherwise, the project will go beyond the expected expenses and it will result to low return of investments.
Third, delivery date is another important objective of project management. It is the identification of the shortest possible route to complete the project by allocating resources properly. When a project goes beyond the value of time constraints, the entire project may consider what element or objective is important – quality or cost.
According to Harrison & Lock (2004), the relationship between these objectives is a big factor to the way the project manager sees the project management. A triangle of primary objectives shows the need of putting quality at the top with the support of time and cost. There are basic logical combinations that can be followed when things go wrong. For instance, the project management must decide whether to keep the value of quality and extend the cost of the project, or to cut short the time of the project completion and produce a low quality result. But the best is to keep a balance between these objectives to achieve the best project management.
Techniques in Project Management
As noted earlier, a project management process starts when an idea is considered for planning, and the project management ends when the project is already completed. However, the value of project management with regards to the three primary objectives can be traced to the value of techniques used to test the project and its objectives. In this paper, I will be looking at the critical path analysis for the time value of the project, at the payback method for the cost of the project, and at the total quality management technique to test the quality of the project result.
Critical Path
Critical path method is used to calculate the critical path of the project and to see events at their times and float values. Critical path is the sequence of activities from the start of the project to its completion (Keane & Caletka, 2009). It should be noted that the critical path provides the shortest and is the most crucial way to complete the project. The critical path changes from to time as the needs arise, or the factors of time, cost, and quality are in direct relation.
The critical path of the project is determined through the critical path analysis (CPA). It is a process of deduction that tries to trace the most logical sequence or pattern of activities and tasks that are crucial to the time of project completion. This means that when a certain activity is conducted or implemented wrongfully, the critical path of the project is directly in jeopardy. It may result to delays of the project completion, which may result to cost inflation.
Critical path is very important because it helps the project manager to adjust the allocation of resources to meet the demand of completion. For instance, when the critical path is determined the project manager moves senior members of the project to the most critical portions and the junior members to less critical areas (Furman, 2011). By doing so, the project manager can get the necessary assurance that the demand of the critical path is met and the problem of delays will be reduced. When the critical path of the project is properly managed and controlled, the project plan is implemented without delays, additional cost, and such other quality problems.
Payback Method
On the other hand, for the organization to see the financial value of the project, there are several methods that can be used. These include the internal rate value or IRR, the net present value (NPR), and the payback method. The payback method is the simplest of the three, and is commonly used by project managers due to the simple logic that it provides for an overview of the project.
The payback method or the payback period details the length of time required to pay back the original investment (Kuratko, 2008). Through this method, projects are tested on the period of their returns, rather than on the percentage of their return. In this process, projects that will take years for the organization to gain back its initial investments are rejected. This ensures that only projects that will allow the organization to wrap and roll new projects in the future will be allowed to be executed.
The calculation of payback method is very simple. For instance, a project that cost $10 million can only bring $100,000 per annum. This means that it would take 100 years for the organization to gain back the initial investment of $10 million. Simply, the project should be rejected due to the length of time that it requires for the initial investment to be gained back.
Total Quality Management
Total quality management, according to Besterfield, et.al. (2011), is "an enhancement to the traditional way of doing business (p. 1)." It is the process of holistic view of the degree of excellence of the project or service for an improved act, manner, and control. Simply, it is the process of looking at the best possible means and approaches to achieve excellence for the organization. This is used to look at the impact of the project on the business goal.
TQM can also be defined as the principle of foundation for the continuous improvement of the organization. It is anchored on the allocation of the organization's resources, including human capital, to achieve the best results. This requires the defined and disciplined network of analysis and actions that will aid the organization to meet the demand of consumers. In terms of project management, it is all about the creation of projects that meet the highest standard of the market to ensure that the organization maintains its competitive advantage.
It should be clearly understood that quality management does not only focus on the result, but it works on the value of the project itself (Arivalagar, 2009). It is necessary to test the quality of each section or area of the project. Quality system is always synonymous with the quality product or result. As I have mentioned earlier, quality should be at the top of the triangle of objectives. It is the most important part because it works for the reputation and image of the organization. When the organization leaves the value of quality in favor of other objectives and elements, the organization also rejects the importance of product quality and the expansion of improvement and development.
Advantages and Disadvantages of Project Management Techniques
The benefit of using the critical path analysis is that it helps develop and test plans to see their robustness and strength. It also identifies the tasks that should be done to complete a project. With the aid of the critical path, the CPA aids the organization to find the best way to deal with delay (School of Public Health and Health Professions, 2009). It is a network of analysis that ensures all resources are working for the completion of the project. However, it does not show the relation of the task to the time, unlike the Gantt Charts. This makes it impossible to be used for larger and complex projects that require clear management and communication plans.
Although, payback method works to provide an overview of return of initial investments, there are also bad sides to this method. First, it does not consider the cash flow to the project after their payback period. Second, this does not discount the cash flow, which is a direct rejection of the time value of money principle. And it also tries to undermine the project life cycle. But still business managers use payback method because it is easier to understand and it creates a selection process for the business to see cash shortage forecast (Lang, 1993).
Nonetheless, total quality management is advantageous to the organization because it tries to test the quality of the project. However, this may have a problem with regards to incremental analysis. A holistic approach to quality does not see the incremental changes that are made on the project, especially with task, cost, and time. Rather that working on these factors, the total quality management sees the organization a single network or as a whole. It undermines the value of quality of the actions to give importance to the impact of quality on results.
Conclusion
Projects are very important to the organization's growth. These projects focus on new-found opportunities and areas that can be explored. Rather than letting them slip away, the organization can always explore them by creating projects. These projects are targeted to create a change on the organization's value, but on the day-to-day operations (at first onset). As a result, while the organization grows in its daily and regular operations, the project also creates value for the organization. In the end, projects are created to develop a new income generator and growth aggregate for the organization.
However, project management involves a string of activities and factors. It is necessary for the organization to test the value of quality, time and cost. These three components are the most important elements of the organization's success in project planning, control, and implementation. In this regard, it is essential for the project manager to test every section and part of the project. A single project can give additional value to the organization, but it can also result to devaluation of the organization. The right direction for the project is always dependent on the way the project manager and the organization utilizes project management.
References:
Arivalagar, N. (2009). Total Quality Management. New Age International.
Besterfield, D., et.al. (2011). Total Quality Management, (Revised Edition). Pearson Education India.
Cagle, R. (2005). Your Successful Project Management Career. AMACOM Div American Mgmt Assn.
Furman, J. (2011). The Project Management Answer Book.Management Concepts.
Harrison, F.L. & Lock, D. (2004).Advanced Project Management: A Structured Approach. Gower Publishing, Ltd.
Keane, J. & Caletka, A. (2009). Delay Analysis in Construction Contracts. John Wiley & Sons.
Kuratko, D. (2008). Entrepreneurship: Theory, Process, Practice. Cengage Learning.
Lang, H. (1993). The Selection Process for Capital Projects. John Wiley & Sons,.
Mishra, R. & Soota, T. (2005). Modern Project Management. New Age International.
Project Management Institute. (2013). What is Project Management. Project Management Institute, Inc. Retrieved from http://www.pmi.org/About-Us/About-Us-What-is-Project-Management.aspx
School of Public Health and Health Professions. (2009). Critical Path Analysis. Retrieved from http://kt4tt.buffalo.edu/knowledgebase/toolbox.php?id=132
