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The Role of Project Management in Today’s Economy

Anay P. Harkare

Northeastern University, Toronto Campus

PJM6000: 72330
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Abstract

The growing emphasis on the requirement of project managers has been well publicized. As a

prospective project manager, before starting out to learn the project management principles and

practices, it is important to understand that this more than just setting tasks, timings and budgets.

In a world of constant disruptions, envisioning organization’s strategic goals via project

management has been a key driver for success. Project management has been reducing the

wastage due to poor project performances. Based on a literature review of popular publications

on project management, articles from Project Management Institute (PMI) and a few peer

reviewed journals to better understand the role of project, program and portfolio management

and its value to organizations, the results suggest that to understand the impact of project

management, it is crucial to understand effect of organizational structures on project

management and how the PMI’s Project Management framework is helping to maximize the

benefits and how various project management methodologies are shaping the practice in today’s

economy.

Keywords: project management, global perspective, importance of project management,

strategic planning, organizational structures, project management methodologies

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The Role of Project Management in Today’s Economy

As defined by the Project Management Institute (PMI), projects are temporary endeavors

undertaken to create a to create a unique product, service, or result. Projects help companies to

achieve their goals are drivers of change and thus, enable value creation and benefits at an

organizational level. In today’s business environment, organizational leaders need to be able to

manage with tighter budgets, shorter timelines, with a scarcity of resources and keep up with the

rapidly changing technology. To remain competitive and thrive in the modern economy, more

and more companies are using project management to consistently deliver value on their

investments in projects. (PMBOK Guide, 2017) Project Management is helping organizations to

manage assets and resources efficiently while at the same time providing flexibility,

predictability, reducing risks and re-work on projects and increasing the quality of results. With

appropriate use of project management techniques and principles, companies can distinguish

themselves in the market and gain a competitive edge over their competitors.

Starting fresh out of college as an Associate at a Technology Consulting firm, I realized

as we scale up to a global level, deployments are happening across various time zones by diverse

multi-cultural teams in collaboration with client teams. The complexities of technology and its

applications grow larger and pressures to be successful are intense. In such a challenging

environment, project management provides an effective and transferable set of skills and

practices which helps cater demands and align teams towards a common goal.

Importance of Project Management

In a nutshell, project management is important because it creates a plan before the start,

establishes a schedule, creates a baseline for the team, optimizes resources, helps in controlling

costs and managing change across the organization while standardizing quality and increasing
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the knowledge base by providing learning opportunities.(PMI, 2010) An Economist Intelligent

report showed that 90% of the global executives believed project management methods as either

critical or somewhat important to their ability to deliver successful projects and remain

competitive. Thus, implementing project management brings business value by providing

flexibility and capability to tackle all kinds of business problems. Larson & Gray (2018) state the

following reasons for organizations to continue choosing Project Management to accomplish

work –

Compression of Product Life Cycles

The average product life cycle in high tech industries varies between 6 months to 3 years.

Product life cycles are getting shorter and so is the ‘time to market’ for most companies. Thus,

companies want to get their products and services into the market as soon as possible.

Knowledge Explosion

Advances in technology and regular disruption require project teams to encompass all the

knowledge, thus increasing the complexity of projects. Project management helps in managing

the risk and integrating various disruptive technologies.

Increased Customer Focus

Increased competition has placed more importance on customer satisfaction and developing

tailor fit products and services for the customers. Project management helps in both – developing

customized products and satisfying customer demands thus, improving customer relations and

satisfaction levels.

Selecting projects to meet organization’s strategic objectives

A project may be managed in three separate scenarios: as a stand-alone project (outside a

portfolio or program);within a program; or within a portfolio. Project management has

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interactions with portfolio and program management when a project is within a portfolio or

program. To maximize the benefits of these projects, organizations establish project governance

and project portfolio process which is designed to improve project management across the

organization and align its strategic objectives. The project owner works closely with the project

manager and the executive sponsor” (champion) of the project in the project manager’s

organization, as well as all project stakeholders, to ensure that the strategic benefits are realized

when the project is eventually implemented and operationalized.(Meredith et al, 2017)

Project Governance integrates project management, portfolio management and strategic

alignment within the organizational environment. Governance provides an overview of the

management of projects, selection of new projects, performance measurement and accountability

and improving project management practices throughout the organization over the long haul.

(Larson & Gray, 2018)

Effect of organization structure on project management

Larson & Gray (2018) classify the different type of organization structures in project

management as follows –

Functional Organization

Different parts of the project are delegated to the corresponding functional departments

with each department responsible for their own deliverables. The hierarchy maintains

coordination through management channels.

Dedicated Teams

A full-time project manager gathers a team of specialists who will work on the project on

a full-time basis. This team acts as a separate entity and works on the project tasks. In some
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cases, the parent companies retain control over the teams while in other cases the project

manager is granted a varying degree to authority to take decisions for the projects

Projectized Organization / Project Based Organization

Organizations where projects form a dominant part of the business (generally more than

75%) have structure designed to support projects and project management. Project Managers are

given full authority to take project decisions while rest of the organization is tasked with

supporting them. Thus, the organization has a set of quasi-independent teams working on

specific projects. This structure is common in construction firms, law firms and consulting firms.

Matrix based Organizations

Matrix structures have individual team members working on multiple projects

simultaneously and have a horizontal project management structure along with a vertical

functional structure. Each individual report to two managers – a functional manager who leads

the functional structure and a project manager who supervises the projects. Depending on the

decision powers vested in project managers and functional managers, the matrix organizations

are further classified as Weak, Balanced and Strong matrix.

Adapting project management framework

The adaption of project management in an organization is dependent on the strategic

value of the project, availability of resources for project success and the organization culture. A

good organization structure integrates the needs of the project & parent organization and allows

project management to eventually integrate projects into mainstream operations.

Project Management Methodologies

Project management methodologies (PMM) have been popularized for use in various

industry sectors for over from TAM model of the 1990s to the latest Site Reliability Engineering
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model of 2018. To increase the effectiveness of PMM, organizations tailor the best practices

based on specific environments. A comparative study of 15 different PMM across distinctive

organizations and academic institutions in 7 different countries conducted by Chin, Spowage &

Yap (2012) showed that the variations between methodologies are attributed to the following

factors; (1) project management processes such as initiating, planning, executing and monitoring

project progress with (2) a selection of tools and techniques to communicate the delivery to the

satisfaction of all stakeholders; (3) consolidated and integrated set of appropriate best practices

and values of project management and (4) a list of references and terminology to define a

common language for the project environment.

A qualitative study of 4 different methodologies – PRINCE2, PRINCE2 based hybrid

PMM, Agile and Waterfall by Wells. H (2012) showed that there are certain gaps in perceived

benefits of using PMMs across the hierarchy in an organization and at project and operations

level. The study suggested that the benefits perceived depend on the PMM used, role, experience

and responsibility of the project. However, the common benefits stated by the interviewees were:

(1) Control, Monitoring and increased Communication, (2) Better planning & Consistency, (3)

Flexibility (4) Improved Quality (5) Increased efficiency and (6) Speed of delivery
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References