Everything you need to know about project management

Project management has many facets - on this page you will learn more about the history, terms and methods of it.

What is a project?
What is project management?
History and development: The story of project panagement
Basic terms of project management
Roles in project management
9 knowledge areas according to PMI
Project management phases
Project management methods
Advantages of project management
What should a project management tool include?
Failure or succeed: Why do projects fail sometimes?

What is a project?

We all know projects. We have all been working on projects. But what makes a project exactly? And why do we often need a comprehensive project management to complete it successfully?

While the software maintenance and continuous bug fixing are not regarded projects for an IT company, the first-time development of a tool definitely is. This stands to reason, right? But why?

When taking a closer look at how the German Institute for Standardization e.V. (Deutsches Institut für Normung e.V., DIN) and the Project Management Institute (PMI) define the term "project", a few things stand out.

According to the DIN, a project is essentially characterized by the uniqueness of the conditions in their entirety, such as target, time, financial, personal and other constraints, project specific organization. DIN 69901

A Project is a temporary endeavor undertaken to create a unique product, service or result. Project Management Insititute (PMI)

What we know so far is, that a project has the following attributes:

unique: The project will not be repeated in this form ever again.
limited in time: There is a given beginning and a given end.

Now, back to our software product example: The development project is unique because this process will not take place a second time. There is also a time frame - a beginning and an end - in which the project concludes with the marketable product. The process of maintaining the software, on the other hand, is ongoing because no end has been defined for it.

It is generally accepted that a project can be broken down into five phases (we will hear more about that later). Since projects are often more complex than they might seem at first and since it can often only be realized having a whole team collaborating, it requires a lot of organizational skills and not least: good management!

What is project management?

It is quite obvious: In order to carry out a complex project you need comprehensive project management. To put it simply, this includes all activities necessary to lead the team to achieve the project goal. Project management includes:

a systematic planning and target setting in advance
the coordination of work processes during implementation (according to plan)
the coordination of the project management team
coordination with stakeholders and team members
a sophisticated task management
controlling and monitoring of important influencing factors (scope, budget and costs, time frame)

As will be explained later, you can derive nine fields of knowledge that are essential for project completion.

History and development: The Story of Project Management.

What do you think? How old is the project management? 50 years? 100 maybe? Well, we'll see ...

At any rate, project management has become an integral part of companies. As already stated, it is all about uniqueness. It is about developments and creating something new. Little wonder, project management itself is constantly changing. Let's go back a few decades...

Pioneers of project management

The year is 1945. On July 16, the world's first atomic bomb was successfully detonated in the desert of New Mexico near Los Alamos. You probably wonder what this event might have to do with project management? Quite a lot.

The test explosion (Trinity Test) was carried out as part of the Manhattan Project. Manhattan Project was just the code name of a huge project that was carried out under extreme pressure in the light of World War II. The NSA's Apollo program was implemented under similar conditions between 1961 and 1972 – when the USA and the Soviet Union were literally in a race into space.

In these cases, interdisciplinary procedures such as research, development and production were carried out simultaneously to some degree. These projects were among the first to include strategic project management processes and documentation and are therefore considered to be pioneers of modern project management.

In the 1950s and 60s, various project management methods were developed, such as the Program Evaluation and Review Technique (PERT) or the critical path method. At the beginning of the 1960s, the waterfall method became more and more popular. The Apollo project in particular used various of these methods.

Innovators: Developments that shaped project management

However, the first scientific approaches to project management were already available at the end of the 19th century at the beginning of the 20th century. Among those who exerted a formative influence was the American engineer Frederick Winslow Taylor (1856-1915), who - to put it simply - sought a way to replace long and hard work with efficient work. A basic idea that still shapes the 21st century today. Taylor called for the separation of physical and mental work and the division of tasks into small parts to find 'the one best way' of getting work done.

Let us take a look back at the year 1917, when Henry Gantt developed a chart that would help to display tasks under consideration of their dependence on other tasks/events. Gantt, too, wanted to increase efficiency by precisely structuring all workflows. The chart - today known as the Gantt Chart - is still one of the most popular project planning tools. The model has proven itself several times over the past decades. The result of an enormous construction project using the chart can now be seen on a trip along the Colorado River - the Hoover Dam built in the 1930s.

To sum up, it can therefore be said that, according to today’s understanding, project management is based on a genesis of one century and that it was only within the last 50 years when modern techniques and methods were developed, that are still being used today.

Project management in the distant past

But where are the origins of project management? To be honest, we have to go back much further into the past to answer this question.

Project management in its most original form is older than many might realize. Though, this becomes quite obvious when you imagine the construction of mighty buildings that were ‘born’ a few centuries or even millennia ago. How did the magnificent churches in the Middle Ages, or massive aqueducts in ancient Rome and Greece to transport water come into being?

Project management, although not with state-of-the-art technology, already existed in the days of the ancient Egyptians. A frequently mentioned example are the pyramids, which had to be built according to a strict schedule. After all, a pyramid had to be completed before the Pharaoh's death. The organization was, as it is today, based on scope, time and budget. They would probably gratefully have used Gantt’s bar chart at that time already, because also dependencies had to be considered – just think about the planning and construction of the burial chambers including all corridors which led to it. Even crisis management was an important part of the project, because you had to be prepared in case the Pharaoh died prematurely.

This means that project management is far more than 4,000 years old. That’s pretty old, isn't it?

Project management today

Not so long ago, however, project management took another big leap forward: Like many other things, it was clearly influenced by digitization. Common practices are designed for digital project management solutions and hardly any company can manage without its own tailored software due to the immense information overload.

Basic terms of project management

Those who deal with project management will ultimately come across some terms that are frequently mentioned. You should definitely be familiar with the following:

Resources: all the resources needed to carry out the process. This can basically be anything; monetary resources, commodities, software and hardware, but also immaterial resources such as manpower or time.

Requirements: all demands that stakeholders place on the project and that therefore affect the process.

Dependencies: correlations between individual tasks that can be used to make out a workflow: "Completion of task B depends on completion of task A". With the right operating sequence, the shortest possible project duration can be determined. Note: the shortest possible duration corresponds to the longest sequence of tasks/activities (the so-called critical path) but be aware that it can change during project implementation.

Kick-off: the starting of every new project. All important information, data and responsibilities are communicated in a kick-off meeting.

Milestones: significant events/interim objectives or important deadlines that divide the project into various sections.

Roles in Project Management

Throughout the years, project management teams have continuously adopted new methods with new approaches, which has also inevitably influenced the functions of the members within the project teams. Many of the project management roles that we are familiar with today did not even exist a few years ago - e.g. the Scrum Master or the Product Owner - both fixed roles within the now widely practiced agile project management according to Scrum. With all these new and yet very similar titles it is often difficult to differentiate, which is why we compared the roles that are most often confused with each other in a separate article. In essence, however, a project team covers the following traditional roles:

Ordering party: There is one person who initiated the project. They bear the main decision-making power and thus the majority of the responsibility.

Project manager: If the initiator would be considered the engine, the project manager would probably be the steering wheel. He coordinates the team as well as all tasks and processes and steers the project into the desired direction - from start to finish (or, if it didn’t went well, to break up).

The team: The third essential component for the implementation is the project team. The project manager is responsible for putting together the best possible team and finding the right person for each task. Cooperation is essential and the expertise of individual team members ultimately benefits the entire project.

Stakeholders: All people who in any way make demands on the project position and thus influence the project planning process are called stakeholders. This can be even users.

The 9 Knowledge Areas of Project Management according to PMI

As can be seen, project management is not only an essential area in companies whose success or failure also influences the economic success of the entire company. Moreover, it is also an extensive area that unites various sub-disciplines. The Project Management Insititute (PMI) distinguishes nine:

1. Integration Management:

Integration management is one of the most demanding tasks, because it includes the elaborate structuring, integration and coordination of all actions and all participants in the course of project implementation. Project managers are challenged to reconcile all disciplines and face the different demands and wishes of the stakeholders. They develop a detailed project plan.

2. Project Scope Management:

The responsible people should deliver an answer to the question "What is and what is not part of the project?" and monitor the progress of the project in this context.

3. Time management:

As you might already assume, this area is concerned with the observance of the time frame and all deadlines. All processes are to be listed, estimated in terms of their effort, dependencies need to be scheduled and deadlines/appointments need to be set and observed.

4. Cost Management:

Of course, compliance with the financial framework is also important. Therefore, cost management deals with the task of determining the planned costs and making sure that the scope is not exceeded.

5. Quality Management:

Here, the focus is on ensuring that all important requirements and demands on the product are met (at least!). What quality requirements exist and how can they be met or even surpassed?

6. HR Management:

The project team should complete the project in the best possible way. That’s for sure. To ensure this, however, HR management must strive to put the team together in the best possible way. Who is needed? What roles will be assigned? What tasks do the members have to fulfill? Which qualifications should people have?

7. Communication Management:

Communication is one of the most important parameters that determines success or failure. It is therefore important to provide all the information the team needs to work well and efficiently.

8. Risk Management

Projects are always associated with risks and dangers. The biggest is probably that the project must be canceled. Risks should be identified in advance to be able to react quickly in case they actually occur.

9. Procurement Management

Everything needed for the project - whether it be hardware, software, premises or even licenses - has to be brought in. This is the main responsibility of procurement management.

Project management phases

If a project is based on a certain scope and complexity, it is important to define a certain basic structure for the entire process. For this reason, a project is subdivided into certain phases, which are carried out successively – i.e. one after the other – by the project participants. Depending on the nature of the project, this structure may vary slightly. However, the Project Management Insititute distinguishes five phases: initiation / start, planning, execution, control, completion.

1. Start / Initiation:

At the beginning of each project is the project idea. This idea should now be depicted as an overall picture and checked for its feasibility. What is this idea about and is it worth the project?

At this stage, no details are set yet. However, there is some planning at the fundamental level: should the project be implemented (resp. does the project provide added value to the business) and can it be implemented (resp. will the necessary resources be available)?

Usually, the most important components of the project are then defined in a so-called Project Initiation Documentation (PID). Here, for example, a business case is outlined, it will be clarified how the project team is structured, what approach it will follow and so forth...

2. Planning

In the next phase, the team will define specific goals and requirements, determine the scope of the project and estimate the costs and resources.

The SMART or CLEAR acronym is often used to define the goals. Both approaches make sense. Yet, as the popularity of agile processes increased, the latter became more popular.

SMART

S = Specific: through clear formulation and answering of the relevant Five Ws and How.
M = Measurable: i.e. It should deliver measurable success.
A = Attainable: Goals should always remain realistic. Especially with regard to the important goals, this should be checked carefully. What resources are available and what resources are actually necessary to achieve the goal?
R = Relevant: What is the sense behind the goals? What result is expected for the company as soon as these goals are achieved?
T = Time-bound: Goals are always related to time specifications, i.e. start and end dates.

CLEAR

C = Collaborative: Goals promote teamwork.
L = Limited: Objectives are clearly limited in scope and duration.
E = Emotional: Employees feel passionate about the goals.
A = Appreciable: The team should work on larger tasks/objectives step by step to facilitate implementation.
R = Refinable: Goals are kept flexible and can be adapted.

Towards the end of the second phase, a precise project plan should be defined that breaks down all responsibilities and tasks and specifies a concrete timetable.

3. Execution

In the third phase, after a short kick-off meeting, the plan is put into practice. Requirements are transformed into results.

4. Controlling/Monitoring

The project manager is responsible for ensuring that everything goes according to plan and he/she keeps an eye on important KPI's, risk factors, the budget, ridges and other key figures. Is the project on schedule? Are both the timeframe and the financial standards met? Does the team need to take action to redirect the project?

5. Closure

In the last phase, the project result is presented to all stakeholders. In a final meeting, a résumé of the entire process is usually drawn, in which (also for the benefit of future projects) it is determined what went well and what went not so good.

Note: Since phases 3 and 4 often run in parallel, people would often combine them. To a certain extent, both phases go hand in hand, but at their core they pursue different goals.

Project management methods

Not every type of project follows the same approach. Rather, over time, different project management methods have been established for different project types and in different industries. Essentially, these are guidelines for project management procedures, with each methodology having different strategies and goals. Those are the most common:

Waterfall

The waterfall method is considered traditional in modern project management and is often referred to as a direct counterpart to agile methods, forming a strong contrast to the flexibility known within Agile.

Here, processes can be compared with the downward flow of a cascade (a stepwise waterfall), which, of course, is also reason for the methods name. But what exactly does that mean? The graphic representation provides some indication. Processes within Waterfall run steadily and sequentially in one direction and the beginning of each step depends on the completion of the previous one. Waterfall thus calls for a rigid order of phases and this requires that the current phase always has to be completed before moving on to the next.

Klar strukturiertes Projektmanagement mit Waterfall

If we think of the creation of a software, the structure of the phases might look like this:

Software Requirements
Analysis
Design
Coding
Testing
Operations

It is obvious that a method like this requires accurate planning and regular checks – because: jumping back one step? Not intended! Therefore, it is important to always make sure whether all the necessary requirements have been taken into account and implemented already? We note: Due to the explicit planning right at the beginning of the project, you should be familiar with the type of project (at least).

Lean

Those who use Lean will literally put their project management on a diet, because this method is all about waste reduction. The methodology, which originated in the manufacturing industry, knows three types of waste:

Muda = waste: All processes that do won’t benefit the product are considered waste.

Mura = unbalanced: Unbalanced processes (e.g. machines whose production processes do not merge perfectly) reduce productivity and increase costs.

Muri = Overload: Machine overloads or an exhaustion of the employees lead to slow processes.

Accordingly, the best possible utilization is expected as soon as none of the so-called 3M's of lean production exists. In this case, the value stream is said to be cleared of non-value-adding activities. Lean is used in particular when companies are interested in optimizing their processes in order to increase cost efficiency in the long term.

Agile Methodologies

Those who have encountered problems with the rigid construct of the waterfall method will probably find their solution in Agile. Agile project management calls for the flexibility needed to respond quickly to changes in requirements and feedback, thereby reducing project risks. For this reason, an agile approach is suitable especially for complex projects with a planning that is likely to change.

The 2001 Agile Manifesto provided a guideline on this. Striking about agile methodologies - as can be seen from the manifesto – is the environment in which the project is implemented. The project team is characterized by flat hierarchies, autonomous action and close cooperation between all parties involved.

Agile, however, is not to be defined as a single method. Rather, it can be considered as a framework, that includes some special method within an agile approach. For example, the following:

Scrum

One method that you might constantly think about when it comes to agile methods is Scrum. Like other agile methods, Scrum assumes that complex projects in particular are characterized by almost unpredictable developments within planning - a circumstance that requires flexibility. For this reason, Scrum teams operate iteratively and incrementally. They develop a functional intermediate product (increment) in shorter, pre-defined time periods (iterative). Ultimately, this approach provides room for experiments without taking major risks, enabling the team to deliver the best possible result. If it turns out that the experiment was a failure, only the increment of the current sprint is lost.

In Scrum you will find autonomous teams with fixed roles:

Scrum Master (responsible for Scrum compliance)
Product Owner (responsible for scheduling requirements for the product)
Development Team (responsible for the implementation of requirements)

There are also 3 Scrum Artifacts (Product Backlog, Sprint Backlog, Increment) and 5 events (fixed, regular meetings). Here you can find more detailed information on how Scrum actually works.

Kanban

Also, Kanban can be considered an agile approach. However, comparing Kanban and Scrum reveals some differences. In contrast to Scrum workflows, the workflow in Kanban is fluent - without interruptions and intermediate results. For Kanban, the focus is on increasing efficiency by avoiding multitasking.

In order to achieve this, the method sets a limit for the tasks in progress and visualizes the task processes in form of a Kanban Board ("visualized map"). The goal is to complete one task before another is started, so one taks will not distract you from finishing another. For short-term changes (such as re-prioritizing and adding new requests), Kanban remains agile, as there is no increment that could be affected by these changes.

In our blog you'll find a detailed comparison of the project management methods.

Easy implementation with project management software

As it may have already turned out, projects can become very complex and confusing. The requirements of stakeholders are constantly changing. Under certain circumstances, a project must even adapt to a changing market situation. Moreover, you need to keep an eye on the costs as well as on the priorities, deadlines, tasks and their dependencies. On top of that, the implementation of projects requires teamwork and collaboration primarily requires a functioning exchange of information. How does a project management tool help?

The advantages at a glance:

overview including visual representation of the project
local and time-independent communication
easy assignment of tasks
all deadlines and milestones at a glance
always visible project progress
clear presentation of bottlenecks and work behind schedule
all important information transparently provided in one central location

You will probably find some free tools offered on the market. However, companies pay for project management for good reason. Find out why by learing about the true costs of free project management software.

What should a project management tool include?

Projects are different and there is no tool that completely covers the range of functions available on the market. Therefore, there is no universal guideline for choosing a suitable project management tool. We recommend to think in advance about the requirements that must be covered and then to inform about the various offers. Below we listed the components that are most relevant to every project:

Collaboration:

The purpose of project management software is to facilitate the collaboration of several project participants. It is the place where all project data, requirements, guidelines and contact is being provided and where progress as well as problems is being shared. Users should be able to access all relevant information and share it with other team members. If there is a certain rights system, this also includes customers and external partners.

Visual task management

The targeted task management is the basis of good project management software and the foundation for implementing the project. Since tasks do not always affect just one person, it is important to make sure that they can be assigned to multiple users. In particular, an option for subdividing tasks into sub-tasks might be very helpful in this regard.

Also, the communication between all parties involved is essential. So you should ask the following questions: Can tasks be commented on? Can background information be stored directly in the task? Is there an option to attach files and documents to tasks? Having all the data at your fingertips makes work a lot easier.

Task processes in projects are of course much more complex than the process of ticking off a completed task on a simple to-do list. Special task workflows create order. Are there approval workflows available for tasks that require someone to review you? Is it possible to add individual status options to you board or lists, so you can create your own workflows?

There are usually several options for visualizing task workflows. Task lists and boards (Kanban) should be standard. The latter, with its subdivision into individual status columns, provides a good overview of the current state of the project.

Some tools also provide the ability to map milestones and dependencies.

Smooth communication in real time

As already mentioned: Communication is key. Only few project management solutions offer an integrated communication option. However, it is important to be able to link communication with elements like tasks, appointments and files in order to keep actions and conversations comprehensible at all times.

Team chat and direct messages should be clearly structured, for example due to a function for commenting on individual messages, direct mentions and file attachments.

Well-ordered file management

Files and documents are needed in every project. The versioning of files and documents and different folders keep the storage of repeatedly updated files transparent and well-organized.

Time management

The team must always be in the forefront of upcoming appointments and deadlines in order not to jeopardize the schedule of the entire project. Different views of the calendar in which the appointments of all team members can be displayed and filtered are helpful. Notifications should be adjustable individually.

Data security / compliant according to DSGVO

A particularly important selection criterion for any company should be data protection arrangements - especially for those teams that communicate sensitive data (be it personal data or data threatening competitive advantages).

Time tracking

Certain functions allow to record exactly how long a certain task has been worked on. This information can be used, for example, as a basis for invoices or as an indication of where future projects need to be improved.

Project tracking

In order to successfully complete the project, progress should be continuously monitored to adapt processes if necessary. For this purpose, certain data and overviews should be provided.

Ask yourself: What forms of presentation are available that reflect the status of the project? (Board View, Gantt Chart, Dashboard)

If overdue tasks are highlighted and can be filtered according to individual users, you can see where help may be needed or where action is required. As soon as individual tasks are delayed or deadlines postponed, it could influence the schedule of the entire project. In these situations, special measures may be necessary.

Mobile Apps

For a project management solution, there should be at least one Android and one IOS application available. This way, you can react to emergencies anytime and anywhere. Of course, the design of mobile applications plays an important role as well. In order to guarantee data protection for mobile use, a two-factor authentication should be used.

Because it can be very time consuming to inform about all the different options, we compared 5 popular project management tools.

Why projects fail or succeed

One of the hardest decisions for a project manager is to declare a project a failure and cancel it. In fact, statistics from the Standish Group's Chaos Report show that around one-fifth of all projects fail, while around half fail to meet time, budget and scope targets due to massive difficulties. It is therefore particularly important to be aware of which factors influence the success of projects and why some projects do not meet their targets or even fail. These are the most common reasons:

Problems regarding requirements and objectives

A clear formulation of requirements and objectives is the foundation of every project and one of the main factors when it comes to whether the project should be carried out at all or not. Surprisingly, however, it is precisely this point that project managers repeatedly cite as the main reason why projects fail. The objective should always take place in coordination with time, budget and scope and should never be disregarded in the further course of the project.

In this context, it is also important to pay attention to the correct prioritization of requirements and to always coordinate changes in requirements with the set goals and the planned scope. A statistical evaluation by the PMI in the course of the PULSE OF THE PROFESSION survey shows how important this is. According to the survey, as many as 45% of those surveyed had to struggle with massive changes in project scope or even scope creeps. The list of main reasons for the failure of the projects clearly included the "change in priorities" (41%) and the "changes in objectives" (38%). In this context, good stakeholder management and sufficient support from the management level are crucial.

Inadequate communication and lack of transparency

It has already been mentioned several times in the course of this article - consciously. The PMI lists "poor communication" with 30% as one of the main causes for failing projects. This has just as much influence as "inaccurate cost estimates". The wrong means of communication, personal discrepancies, lack of transparency on the part of managers or even language barriers - a deficit in the exchange of information can have many reasons.

The choice of suitable software, however, brings a significant improvement in communication processing and also solves the problem that decentralized teams are facing. Unfortunately, many projects still use e-mail to communicate, which can and probably will bring up unexpected problems. Especially in complex projects, e-mails become real productivity killers. However, it is a huge problem that information can be lost, current processing statuses remain opaque and fluctuations slow down processes. The right project management software as a central location for all important information and data creates overview and transparency.

Management without Method

The extent to which methods support project implementation has already been explained above. If a team uses no or wrong methods, it will face massive organizational problems. Although it can easily be confused with agility and flexibility, project management is not a place for spontaneity. If the wrong method is used, productivity can suffer or simple experiments can become risks for the whole project.

The most important factors for successful projectmanagement

These are the project management success factors according to a study conducted by Volkswagen Coaching GmbH at the University of Bremen:

Sufficient support in achieving the goals by top management
Usage of the method best suited to the project
Qualification of all team members with regard to the selected methods, processes and tools
A well thought-out organizational structure
the right project management software choice