Why is project management important?
Project management reduces risks, cuts costs, and improves success rates.
It’s as simple as that.
However, to properly understand the minutiae of how project management can benefit you, it’s best that we take a step back and elaborate on how project management inevitably leads to reduced risks, cut costs, and improved success rates.
To this end, we present to you the 7 main benefits of project management that demonstrate its importance.
Project management lays out a path towards success
Project management is important because it clearly outlines the path to success by showing you:
- Where you are,
- Where you need to go,
- All the steps needed to get there, and
- All obstacles you can expect to encounter.
All of this is done during the two initial stages of a project’s life cycle — initiation and planning.
As an example, consider the Burj Khalifa — the tallest building in the world.
This work of architectural wonder did not spontaneously emerge out of thin air.
The project budget and project deadline were already set in place before construction began.
The risks, too, were already accounted for. For example, to combat the challenges of summer heat and immense height of the structure, strategies for pouring concrete at night and high-pressure concrete pumping were in the works before day one.
Could you imagine how construction would have gone had the architects and engineers decided to just wing it and deal with problems as they came up? They might as well have flipped a coin — after all, more than 50% of all projects without project management are doomed to fail. This comes as no surprise to those who know that a lack of clear goals is the most common cause of project failures.
While your personal or company projects may be humbler in scope, budget, and project timeline than the construction of the world’s tallest skyscraper, planning to wing them without establishing a clear plan of action is a recipe for disaster.
The likelihood of such a project going above budget, being late, or ending up poorer in quality than imagined is all but guaranteed — and that’s if it ever gets delivered in the first place.
Project management ensures accountability
At the heart of project management is a project manager — someone who manages the daily goings-on of all the parties involved in the project. Having a single leader with the requisite skills helps in many ways — but, most importantly, it establishes clear accountability.
The project manager is the one person in charge of the project performance metrics.
In other words, they are the ones making sure the project:
- Doesn’t go over budget,
- Doesn’t miss the deadline,
- Doesn’t incur scope creep,
- Doesn’t encounter any unexpected risks, and
- Doesn’t suffer any other setbacks.
Most importantly, project managers are accountable for tracking the project from its inception to its completion.
Why is this so important?
Well, according to a study of around 600 business and IT executives, a staggering 77% of them reported not agreeing on when a project is fully complete.
For 90% of institutions, a certified project manager is already seen as the key indicator to a project’s quality performance. Therefore, the leadership and accountability necessitated by formal project management is in itself a major benefit for many organizations.
Project management enables better risk management
The sad truth is that 70% of all projects fail. And, as chance would have it, poor risk management is cited as one of the main contributors to project failure.
Another concerning statistic is that 62% of respondents in The State of Project Management Survey 2018 reported mostly or always engaging in risk management.
In other words, almost 40% of respondents entirely ignored accounting for potential risks.
But, all projects will encounter setbacks, issues, and challenges.
These numbers show that even such a fundamental part of project management is ignored by some and that the difference between project management and proper project management is striking.
Nevertheless, using proper project management — mandatory and adequate risk management included — greatly increases your chances of project success.
By using risk analysis, the team knows what to expect and how to handle most of the issues it’s expected to encounter.
Now, an unexpected outbreak of a global pandemic or a sudden financial market crash can still throw even such projects into disarray — but these are the expectations, not the rule.
Even with all the meticulous planning on the Burj Khalifa, the project still exceeded the deadline and budget by nine months and $600 million respectively — although the biggest contributing factor to this was the global financial market crash in 2008.
Compare this to projects which don’t have the benefit of foresight bestowed by project management. Such projects have no other options but to be reactive instead of proactive — dealing with issues as they crop up, and hoping for the best.
Project management improves resource management
The triple constraint theory of project management states that scope, cost, and time are intrinsically linked. Changing one necessitates a proportional change in the other two, lest the overall quality of the project suffer.
The accuracy of the triple constraint model has been called into question, leading to the six constraints model which comprises scope, quality, time, cost, benefit, and risk.
Regardless of the model you use, projects do have interlinked variables that must be taken into account in order to deliver the project under the following circumstances:
- On time,
- On budget, and
- At the desired level of quality.
To this end, project management is paramount.
With project management, you are able to calculate a realistic quality output depending on the scope, cost, and time you have to work with.
Alternatively, you can present a stronger case for why you would need:
- A higher budget,
- Longer deadline, or
- Larger workforce to achieve the desired results.
Expecting efficient management of these variables without project management is folly.
Project management helps minimize duplicate work
One of the pressing concerns of many organizations is work duplications.
Research does suggest that workload duplication negatively affects performance.
Duplication also results in a waste of resources. For example, marketers spend almost 70% of their time doing pure duplication. The issue isn’t as prevalent in other professions — but it’s not desirable nonetheless.
Project management presents one avenue of overcoming duplications through integration. Integration isn’t always an option, but when project integration is feasible, it’s sure to result in more efficient resource utilization.
But, integrating two projects without proper project management is nothing but an exercise in futility.
Furthermore, even without integration, project management can reduce task duplication and help teams stay united and efficient by detailing the who, what, where, and how.
Project management tools facilitate oversight and quality control
Project management tools give the project manager complete and effortless oversight of the entire project.
This allows the project manager to monitor the progress of the project scope and compare it to pre-established milestones.
It can also more easily alert managers to impending risks and objective off-tracking.
Project management tools improve project success ratios thanks to their insightful quality-tracking features and layouts.
In other words, project management can benefit your company by providing you with better insight into your KPIs and team workflow.
With project management tools, project managers can now effortlessly keep track of the project progress and make informed decisions that will steer the project towards success.
You can, technically, avoid the use of modern project management software like Plaky, as no fewer than 44% of project managers do. But, to do so would be tantamount to willfully ignoring the strong link between such software and high-performing projects.
Namely, project performance metrics in companies that use project management software skyrocket those of companies that don’t use it. In addition to this, the use of project management software is also linked with increased project management maturity, with an impressive 95% of companies with high maturity using such tools.
Even ignoring all this, project management software has proven to have a momentous impact on team communication and timeline estimation — improving them by 49% and 60% respectively.
Project management maturity increases performance
Now, we can’t assume India’s former PM Indira Gandhi had project management in mind when she said that “Every new experience brings its own maturity and a greater clarity of vision.” But, the quote is perfectly applicable here.
Proper project management techniques may well fail — especially if the folks in charge aren’t wary of unrealistic expectations and similar red flags.
However, as the organization adopts a culture of project management, its competence in utilizing proper project management also increases.
This is known as project management maturity. By answering the 36 questions included in this questionnaire, you can use the project management maturity model to ascertain the maturity level of your project.
In total, this model recognizes five levels of maturity:
- Level 1: Initial Process
- Level 2: Structured Process and Standards
- Level 3: Organizational Standards and Institutionalized Process
- Level 4: Managed Process
- Level 5: Optimizing Process
However, statistics show that the overwhelming majority of projects are categorized under the second level. An effective way of facilitating an increase in project management maturity has shown to be the integration of project management into the company culture — something that only 46% of organizations do.
What’s interesting is that mature project management processes are found in 32% of high-performing organizations and only 8% of low-performing organizations. This suggests a link between project management maturity and the overall success of an organization.
According to research conducted by PMSolutions and drawing from well over a decade of data, higher project maturity brings with it the following changes:
- An increase in customer satisfaction (26%),
- An increase in productivity (21%),
- An increase in projects delivered under budget (23%), and
- A decrease in failed projects (29%).
Project management pays for itself
The factor most likely to turn people off from project management is its cost.
The demand for project managers is high, which in part contributes to their high costs of service.
Add to that the costs of project management software, and the numbers quickly start to rack up.
According to a PM software market research by Capterra, 56% of organizations report cost as the driving factor behind their reluctance to utilize such software.
But, once you look past these surface-level notions, you’ll find that statistics present an entirely different story with regards to the cost of project management.
For example, it’s been shown that companies that invest in project management waste 28 times less money overall. In addition to this, PMI has also found that 12.2% of money was wasted in the US due to a lack of project management.
As they put it, this means that $122M in every $1B go to waste — unless proper project management is utilized.
If, like 58% of organizations, you still don’t understand the value of project management, bear in mind that it not only positively affects projects, but that it also pays for itself in the long run.
Conclusion: Project management is a necessity rather than a luxury
By this point, you should have a clear understanding of why project management is important for teams working on projects.
However, the main takeaway of this guide shouldn’t be that project management is beneficial — that much is expected.
Instead, it’s that project management is necessary for the optimal growth and development of any company.
Furthermore, while the price of certified project managers certainly isn’t going down any time soon, you can offset the cost of project management software by trying out Plaky.
Plaky is a state-of-the-art project management tool supporting unlimited users, unlimited features, and — best of all — it’s entirely free. In other words, Plaky can offer project managers everything they need to reduce risks, cut costs, and improve success rates.
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