Poor project management costs companies far more than they think. The PMI has found that for every $1 billion invested in projects, $122 million goes down the drain because of questionable project management practices and eventual poor project performance.
Considering the numbers, being negligent when managing projects is something companies simply cannot afford to do. That is if they claim to be smart about their money and resources. Another important thing to remember is that understanding how to manage projects well can not only spur your business growth, but give your company an edge over the competition.
This guide is a comprehensive overview of project management with the best practices, methods, techniques, tips, and tricks all in one place. It will take you from the very basics of project management to more advanced topics such as key tools and project management certifications. Even if you have experience with project management, this cheat sheet will make a great baseline for you to go back to every time you feel like revisiting the fundamentals and checking out where it all started.
- What is project management?
- Project management lifecycle
- Project management methodologies
- Challenges in today’s project management
- What is project management software?
- Project management tools everyone needs
- The best project management resources
- Key project management skills to master
- How to become a project manager
What is project management?
The first thing to know before you dive into the world of project management would be the definition of the pillars it stands on. Let’s take a look at the way the most reputable project management sources explain a ‘project’ first.
What is a project?
The PMBOK Guide defines a project as “a temporary endeavor undertaken to create a unique service or result.” This means that a project is anything that has a start and an end. In practice, every project stands for a sequence of close-knit tasks and milestones you or your team need to deliver one by one for the project to reach its intended goals. A project can be anything from upgrading your company’s current product to redecorating your office.
Defining project management
Now that we've covered the basic definition of a project, let's look at project management. The PMI presents project management as “the use of specific knowledge, skills, tools, and techniques to deliver something of value to people.” With every project, you have a set of objectives and deliverables, which will ultimately show the quality of project management and give you an idea of what delivery time and budget you are looking at.
In addition to planning, organizing, and heading a project from start to finish, project management also involves coordinating resources. This can come in many forms such as funding, people, time, materials, equipment, facilities and other physical assets required to undertake the work.
One of the most important things in project management is the need to ensure that project standards are set and followed. To succeed in this process, enterprises with multiple cross-functional projects usually have a Project Management Office (PMO), a group of people responsible for defining and maintaining management practices within the organization. The Project Management Office plays a vital role in identifying, documenting, and implementing the standards for your company’s project management processes.
Essentially, it means that PMOs make sure there are repeatable strategies to organize all of the projects. By establishing a Project Management Office, businesses increase efficiency, enhance project success, and create opportunities to grow.
Why project management is important
As you might have guessed by now, project management is the glue holding everyone in the company together, perfectly syncing workflows to maximize productivity. Effective project management always helps you set realistic project goals and objectives, do detailed project planning, and align strategies. In many cases, it also helps project managers do thorough quality control and reduce costs. Most importantly, it teaches you how to expect the unexpected by reducing uncertainty, calculating risks, and considering all possible project progress scenarios.
Project management lifecycle
According to the PMBOK Guide, there are 5 phases that go into a standard project management lifecycle: initiation, planning, execution, monitoring, and closure. Here is a brief overview of all the stages.
This is the very first step you need to take in order to set the project management lifecycle in motion. Project initiation requires project managers to draft a convincing business case and conduct a feasibility study to prove that the initiated project is what the company really needs for reaching new horizons. You also need to provide sufficient evidence to the fact that the project can actually be completed and if it can, what the company will have to pay for it in terms of effort and time.
During the second step of the lifecycle, you need to turn the ideas presented in step one into actionable plans. Time frames, budget allocation, capacity planning, resource management, project scheduling — you need to account for all of these components to reduce the chances of something unexpected happening after the project launch.
This is where you put some thrilling music on, roll up your sleeves, and get down to business. In less poetic terms, this is where your teams start working and test your project plan in action. Project managers, in their own right, need to define clear responsibilities and accountabilities within their teams and keep all the stakeholders informed regarding the status of each milestone or task.
Managing digital projects is a challenge in itself, but being in charge of multiple projects at the same time is a whole new level of multitasking. Monitoring your projects, especially if you use advanced project management software for managing your resources, can let you know early on if you’re entering the red zone. This is why going through the project monitoring phase is paramount for some scope creep not to turn out to be a low blow when you least expect it.
Finally, during the last step of the project management lifecycle, you get to look back at everything the team has achieved and present your deliverables to the customer or the C-suite.
Project management methodologies
Agile and Waterfall are the two methodologies dominating project management today. Both of them are equipped to match the needs of specific teams and projects, but as companies look for more flexibility in their work setting, going hybrid and using both methodologies at the same time is becoming increasingly popular. So what are these methodologies about?
Agile encourages teams to engage in a cyclic process where they work in iterations. Throughout the lifetime of the project, teams usually revisit the same phases like review or feedback several times. Deliverables are, as a rule, not set in stone and priorities can change as the project unravels. If you look at the most popular Agile frameworks, Scrum always tops the lists. It is an Agile approach where teams hold daily stand-up meetings and run Sprints, which stand for 2-week long milestones.
The difference between Agile and Waterfall here is that the latter is more conservative or traditional, you could say. Deliverables need to be clearly defined from day one and they rarely change in the process of project execution. Agile is cyclical, while Waterfall is linear and not as flexible or adjustable. With Waterfall, you gradually move from one phase to another like defining project requirements, working out implementation agenda, implementing the project, doing quality assurance, etc.
However, some companies try to find the golden middle between the two methodologies and combine the stability of Waterfall with the flexibility of Agile. In other words, they try to make their planning Waterfall-defined and execution — Agile-driven. But whatever methodology they settle for, most teams heavily rely on Kanban Boards and Gantt Charts, the most basic yet essential project management tools that help you manage tasks and milestones.
Challenges in today’s project management
Poor project management is a luxury, it can eat up massive amounts of investments when not handled properly. In fact, recent estimates claim that every 20 seconds, $1 million gets wasted on tasks that could be automated. If you calculate this into a yearly statement, you’ll be looking at an eye-watering price tag. So what are the main challenges in project management today?
Eliminating inadequate communication
A recent report by the PMI reveals that 29% of projects fail because of poor communication. With communication gaps on the table, it is hard to align strategies and remove roadblocks. Even more than that, stakeholders simply do not have access to the real picture of the project. After all, the success of a team and, by extension, of a project is heavily reliant on high-quality communication and real-time updates regarding project progress.
Managing scope creep
Scope creep can be like a bull in a china shop: even if your project is running smoothly, some slight change in priorities or a new request from the client can wreak havoc on the whole project. In fact, changing objectives midway leads to project failure in 37% of cases. But to be fair and realistic, scope creep is always going to be there and instead of being reactive, project managers need to learn how to be proactive and work out change management protocols before they run into an actual problem.
Finding relevant project management software
Automating tasks used to be a nice-to-have, but now it is more of a must. With too many hours wasted on tedious manual work that can be otherwise completed in a matter of seconds companies waste millions of dollars from their project budget every year. And it is not only about automation — project management software is also irreplaceable in doing task time and project estimates. However, even with the abundance of project management software in the current market, it is often hard to find the most suited one.
What is project management software?
Project management software is a tool helping you plan and implement all project phases. Backed by the right project management software, project managers get easy access to all their real-time project data and are able to make faster decisions moving their projects closer to the finish line. The design and functionality of such tools can vary here and there, but their purpose always remains unchanged: to save companies time and money spent on projects. The PMI has found that there is a 15% difference in goals met, 19% difference in projects completed within budget and 20% difference in projects completed on time if you look at the companies that use project management software as opposed to those that don’t.
There are lots of benefits to using a project management tool. It not only helps you be in control of your project progress, but also makes project planning, resource management, and reporting much faster and easier. For one thing, with an AI-driven solution you can get your project planned out task by task in a matter of seconds and then introduce some adjustments, should any be needed. Here is what a tool called Auto Schedule looks like in Forecast. It brings the time you will spend on task scheduling to a bare minimum.
On top of that, project management software will also give you insights into resource availability. Does your team have enough work to do or will they already need to work overtime? Can you still ask them to join a new project or does it make sense for you to start looking for reinforcements? A Heatmap has answers to all of these questions.
Project management tools everyone needs
Project management has been around for decades so there are already lots of tools in its toolbox. Here are the ones you will stumble upon most frequently.
- Project baseline will show you where you started. This is the initial plan you and your stakeholders will develop when initiating the project and defining its goals and deliverables. A project baseline functions as a point of reference you can look back at when you need to do a reality check on how the project is progressing.
- Project scope stands for a short outline of all the phases, milestones, deliverables, tasks, resources, and estimates that make a project. A project scope makes it easy for all the stakeholders to understand what the project means to achieve and what will be required for its successful completion.
- Project schedule, usually visualized in a Gantt chart, stands for a timetable that will show you all the tasks that go into specific milestones and the deliverables that control them. A project schedule is always dynamic: you will add and remove certain tasks, change delivery dates, and adjust dependencies.
- Kanban board gives you a great opportunity to visualize your to-dos and easily define their status by putting them in a specific category like “to-do”, “in progress”, or “done”. The best thing about Kanban boards is that they are very simple to use: you just need to drag your task cards from one column to the other and that’s about it.
- Sprints are, as mentioned before, a part of the Scrum framework. These are 2-week marathons you and your team will repeatedly run during the project execution stage.
- Project budget calculates the combined cost of all the activities, tasks, and milestones that will have to be delivered for the project to end in success. In other words, a project budget shows how much a company will have to invest in a specific project to get a tangible result out of it.
The best project management resources
To be at the forefront of all the trends driving project management, it is essential that you have a list of the best project management resources to rely on. Here are the ones you can’t afford to miss.
Project Management Institute (PMI)
The PMI is where it all started. It is a global association for leading project management professionals that holds great authority in the field. In 1996, they started regularly publishing the PMBOK Guide, The Project Management Body of Knowledge, which is like the Holy Bible of project management.
McKinsey Global Institute
McKinsey's institute for business and economics always has fact-based insights that help leaders from social, public, and commercial sectors make better business decisions. In other words, if you need some industry-related statistics on what trends are driving change and what global companies think about them, McKinsey’s reports are the first thing to look up.
PricewaterhouseCoopers is recognized as the second-largest professional services network in the world and a very reliable source for industry and project management reports. These reports usually cover topics like strategy and growth, operations, governance, risk, and regulation, which are highly relevant in any project management setting.
This is a consulting enterprise that publishes regular global reports on risk management, risk and financial advisory, audit & assurance, etc.
Harvard Business Review
Although this online publication is not directly related to project management and will not necessarily give you niche knowledge, it is very useful for finding out what trends are driving businesses in general. It is also of great help for the project managers who want to explore things like key management skills and tips, real-world case studies, practical advice on how to scale businesses, and ideas from the leading business minds.
Key project management skills to master
Let’s face it: being a project manager is no walk in the park. It is a stressful job requiring you to be a Julius Caesar and a Nanny McPhee at the same time, always multifunctional and aware of who is doing what. A project manager needs to have the most desirable hard and soft skills. Here are some of the key skills particularly relevant in this day and age.
Being able to connect the dots and keep everyone in the loop is the project manager’s job number one. Or skill number one, if you will. After all, effective stakeholder management helps you minimize risks and maximize success rates. But the truth is that it is hard to make all the stakeholders communicate with each other. That’s why as a plan B, you need to have a tool that will help them either communicate online or at least have easy access to a platform where they can get a bird’s eye view of each task, dependency, and milestone to know who is doing what.
Force majeures can happen no matter how hard you try to avoid them. Knowing how to manage them, however, can help you keep the project going even if things don’t go according to plan. Project managers need to be pros at looking ahead and anticipating potential risks, calculating what could go wrong and working out a step-by-step guide on how to deal with such problems.
One way or another, time is the main currency in project management. Your ability to control project timing is one of the factors defining its success. When your team members register time, it will be easier for you to do project calculations and anticipate potential delivery delays. Luckily, there are lots of tools with features like Gantt charts and Kanban boards to help you demonstrate excellent time management skills, no matter the size of the project.
How to become a project manager
Becoming a project manager is a project in itself. To start working as a project manager, you first need to explore all the ins and outs of the job and everything that might be expected of you. If you want to become a certified project management expert, there are several trusted and verified certifications you need to consider.
Developed by the Project Management Institute, this certification is widely recognized around the globe and uses the PMBOK Guide as its key study resource. An important thing to remember is that you cannot simply take this test if you are a newbie in the field. Instead, you need to possess a few years of relevant work experience or have a degree in project management.
To get ready for the certification, which is a 200-multiple choice question test, you can take specialized PMP training. The certification itself costs $400-$600 depending on your country of residence and you might also spend an additional $1000 on training for the certification. However, the outcome will be well worth the effort and the investment: the PMI has found that PMP-certified experts make 20% more money than their uncertified counterparts.
This certification is more relevant if you are based in Europe. Developed by the UK government and based on PRINCE2 as a PM method, it will help you get accepted into any team that structures their work following PRINCE2. Holding the status of a PRINCE2 Practitioner means that you can not only work in a team that uses the methodology but also manage the group.
Since this is one of the most popular Agile frameworks, there are several Scrum-specific certifications that can prepare you for the job. For example, Professional Scrum Master, Professional Agile Leadership, and Professional Scrum With Kanban, to name a few.
Proper project management is a tough nut to crack. A great number of companies have ended up with a diminished return on investment while dealing with projects they couldn’t properly handle even when working with an experienced team. But if you invest in proper training and gain the right skills, project success will be more real than ever. So remember to keep this guide in your back pocket to get all the fundamental questions answered and easily navigate to more relevant topics.