What is Project Management?

Time, Costs, Resources

Good Project Management deals with three factors: Time, Cost and Resources. In other words, a Project has to be on time, within the budget and using only the resources planned.

Planning, Managing & Controling

Project Management is generally divided into two major phases: Planning a Project and Managing & Controlling it. Each Phase contains activities shown in the graph.

These activities have equal importance. To ensure that a Project completes on schedule and within budget, it must be first carefully planned and detailed; each task must contain all the resources with their availability (resources can be personnel, materials, equipment, etc.). A good and detailed planning will allow a good progress control together with an accurate cost control. During the construction phase, by carefully tracking actual progress versus the baselined planning and use of resources, the Project can be completed on time and stay within its initial budget, unless resources have been initially underestimated.

The situation in Europe (and everywhere)

After years of extensive experience in Southeast Asia, Australia and Europe, we have noticed that, if almost everyone is able to make reasonably good planning/scheduling/budgeting, good tracking however is more or less left behind.

We have seen big bar charts and PERT networks pinned-up on the walls, but they usually remain unchanged for the whole duration of the Project!

Cost Control (which is only a part of Project Management) is often only examined the "after event cost control". This is partly due to the lack of sophisticated Project Management systems, lack of training (or knowledge) of staff in charge. In other words, incapability to retrieve information "on line". Therefore, when the information reaches the desk of the Project Manager, it will be too late for him to take the right decision.

Not long ago, it appeared that to complete a Project on time and within the budget was not of major concern: business was good, competition less keen, financing easily available. Today, this situation has changed: financing is harder to come by, interest rates are maybe low but the economy is uncertain. New investments are much more carefully planned and competition is keener. Feasibility studies and business plans are more detailed and take longer to complete.

Being overly careful, decision making becomes slower. However, when a decision is taken, the Project has then to be completed within shorter schedules and prices are squeezed drastically, leaving smaller profit margins.

To remain on those tight schedules, fine progress tracking becomes indispensable but it seems that few Project Managers have wide experience in the use of sophisticated Project Management computer programs. In case of slippage of the Project, few are able to put it on track again. "What if?" simulations are still rare.

Progress tracking

When the Project is under way, as Project Manager, we must bring it to a successful conclusion. Unfortunately, the only thing we can be sure of is that the original plan is wrong. This is often due to the unexpected: late arrival of equipment, illness of key personnel or technical difficulties. However, the most common causes of Project slippage are excessively optimistic estimates and incomplete plans.

The purpose of Project control or Tracking is to generate corrective actions to keep the Project on schedule even when the inevitable or unexpected occurs. This helps to maintain realistic goals, update the plans and stay on track.

Project control, or Tracking, is a feedback loop in which we compare actual results against plan, assess the impact of any deviations to target dates and costs, and determine corrective actions. Proper control cannot be exercised without this feedback loop (see graph).

We would like to conclude this note by quoting two statements: