Why Is it Important for Organizations to Use Project Management?

Before you can understand the importance of project management for businesses and organizations, you need to understand that a project is a temporary endeavor. The project is developed, implemented and monitored through project management to create a specific result in the organization. Project management's value lies in the appropriate allocation of resources to help the project be completed efficiently. A skilled project manager is good at keeping his or her eye on a lot of moving parts at once, making sure each piece of a project is proceeding as it should. Project management is especially important for complex projects with multiple deliverables that often depend one on the other.

Cost-Effective Approach

Whether the project manager is an in-house employee or contracted for the project's purpose, the person is integral to making sure the project falls within the budget established. Without project management, a new endeavor can take longer to develop and implement. Time is money, and most businesses are investing in and allocating resources to the development of new things. If the project is not being properly monitored, resources are wasted or misused.

For example, a business owner might decide to implement a new website and online marketing campaign. The project manager should press the web design firm to keep to deadlines, while the business owner allows marketing employees to work extra hours to give the designers the information needed for the new site. If the web design firm delays, not only does the marketing project take longer to see a return on investment, but also the business owner spends more as his people follow up and work with the designers for longer than anticipated. It is the project manager's role to anticipate and prevent costly delays.

Monitor Resource Procurement

One of the ways project managers keep costs down is by understanding the resources needed for any one project. Many project managers contracted for specific types of work have a reliable contact list of contractors to use on any project. The project manager should be able to put a team together as needed based on the scope and budget of the project.

For example, a freelance project manager who specializes in IT development is contracted to improve network security, customer retention, and cloud-based storage for a small business. The contractor assembles a team of network specialists who can wire the office properly, a software specialist who can implement and train new customer-retention programs, and network integration experts who can move files to the cloud.

Scope Assessment

The project manager considers the scope of the project and whether it moves the business forward in its mission and vision. While businesses should strive for new and innovative thinking, if it doesn't fit with the company mission, the project manager works with business leaders to either change the scope or terminate the project before additional resources are allocated to it. Project managers can help reduce scope creep, when the scope of the project begins to move away from the original plan.

For example, assume a small fulfillment warehouse is set to implement a new cloud-based inventory system with point-of-sale software. The implementation cost is $10,000. The project manager assesses the cost versus the benefit to the company. If the new program isn't going to result in cost-efficiency that pays for itself, the project manager reviews the scope and makes changes, perhaps eliminating the point-of-sale component from the project.

Monitor Resource Procurement

One of the ways project managers keep costs down is by understanding the resources needed for any one project. Many project managers contracted for specific types of work have a reliable contact list of contractors to use on any project. The project manager should be able to put a team together as needed based on the scope and budget of the project.

For example, a freelance project manager who specializes in IT development is contracted to improve network security, customer retention, and cloud-based storage for a small business. The contractor assembles a team of network specialists who can wire the office properly, a software specialist who can implement and train new customer-retention programs, and network integration experts who can move files to the cloud.

Competitive Advantage

Effective project management gives businesses a competitive advantage. Business owners who constantly try to stay competitive may find themselves in areas they are unfamiliar with on projects. Project management helps the business owner by using the experts in the areas needed while allowing the business owner to serve as an adviser to the project. The project manager can break any project into smaller sections and provide timetables and metrics regarding success that help the business owner define the true viability of the project.

For example, a fitness studio owner might implement a series of exercise programs with new, cutting-edge equipment. The project manager would not only be in charge of getting the equipment and installing it but should also establish the marketing campaign to get new students in the door. The business owner focuses on keeping existing clients happy while testing the results of the new program. This allows for innovation without risking the core business.

By Kimberlee Leonard