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Home > Business Strategy Best Practice > Project Planning Techniques for Small and Medium Enterprises

Business Strategy Best Practice

Project Planning Techniques for Small and Medium Enterprises

by Damian Merciar

Executive Summary

  • Establish agreement on which project to undertake.

  • Consider the project management (PM) theories: Is your project predominately process or operational in nature?

  • Be careful to manage risk during the implementation of your project.

  • Never separate cost and schedule considerations in a project.

  • Empower team members.

  • Be consistent in application of PM techniques. Profit enhancement and cost savings are just two areas where improvements can be made.

 

Definition of a Project

One working definition of a project would be that it is a one-off job that has a known start time, a planned end time, and an intended outcome, and that it would include a defined scope of work, a budget, and personnel assigned to carry out the work. What distinguishes a project from regular work is that it is multi-task in nature—it is not a single job repeated.

This is where the Project Management Institute Body of Knowledge (PMBOK) comes to the fore (Project Management Institute, 2004). PMBOK is the guide setting out what is generally agreed to be best practice in the world of project management. The guide was the first to recognize the five basic phases of a project fully: initiating, planning, executing, controlling and monitoring, and closing. Using its methods, projects are completed by dividing them up into processes, or stages. A project is distinct from a process, primarily in that it is a collection of a series of processes.

Likewise, project management is not just a schedule of works that has to be completed. All the sophisticated and intricate software available will not make a project manager. Indeed, the bulk of this software is primarily focused on scheduling. Let us not forget the management element and all that implies—from office politics over resource allocation to managing distinct and different personalities. This role successfully combines the “what” and the “how” of a job: what being the scope and desired end result, and how being the process and control structure that you use to get there.

Performance, Cost, Time, and Scope

Performance refers to both operational and specialist requirements—operational being what it is that the project is aiming to achieve or do, and specialist referring to the specific characteristics that apply to the output or deliverable: color, speed, dimensions, etc. Cost in the service sector is predominately the labor cost required to complete the job. This cost itself will typically also contain an element to “keep the lights on”—office rental, property taxes, facilities management, etc. For manufacturing firms, material and capital equipment costs are accounted for separately.

Time is the time required to complete the project, and scope is the magnitude (and by implication the limitation) of the work to be undertaken. The relationship between these variables is key and can be shown as:

Cost = f (Performance, Time, Scope)

In other words cost is a function, f, of the performance, time, and scope of the project. It is not necessarily important to note that if you know three of these variables the fourth can be determined. Rather, it is more important to note that any project has a scope, a cost, a time, and a quality as constraints, and it is vital that these are balanced and progressed toward the outcome, which is completion of the project. The combination of these variables represents the performance of the project. You cannot assign arbitrary values to these four elements; doing this may be useful in a control situation where additional resources are required, but a director will not release them to his project manager and will tell him instead just to get the job done. (Presenting the director with a particular constraining factor or factors, possibly—if not preferably in this instance—identified using scheduling software, will help to influence a decision to grant additional resources.)

Project Methodology

Project methodology must be explicit and include the five basic processes: initiating, planning, executing, controlling and monitoring, and closing. Initiation can range from a single employee recognizing a fault at factory level, to a global CEO deciding to change a product offering. Planning is typically done by the equivalent of middle management, with notable exceptions. Executing the project can either be done by an in-house team or by retained professionals, while controlling will always lie finally with the client. Monitoring is the micromanagement of the project’s keeping to its brief. Closing includes an assessment of fitness for purpose: whether a project has achieved its stated aims. If a project slides or becomes nonviable, the project manger will not usually be the person who decides whether to reschedule or discontinue a project—he or she would normally require sign-off at a higher level. The whole project team needs to be aware of accountabilities and limits to authority.

This area is not limited to ISO 9001 and its application. Quality management, assessment, audit potential, and control are important parts of project management, though they are not the defining ones. A useful methodology needs to be efficient and not onerous: it is supposed to be a framework for process delivery—making it easier to complete the project.

Many software packages are available for the project manager, from the complexity and comprehensiveness of Oracle’s Primavera (typically beyond the scope of most SMEs) to commercial open-source applications such as those available from Project.net. One of the most widely known and available packages is Microsoft Project 2007 (MSP, 2007). Again, one must not rely solely on such software; they are tools to help facilitate projects and their limitations need to be understood.

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Further reading

Books:

  • Kendall, Gerald I., and Steven C. Rollins. Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed. Boca Raton, FL: Ross Publishing, 2003.
  • Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling, and Controlling. 8th ed. Hoboken, NJ: Wiley, 2003.
  • Lewis, James P. Project Planning, Scheduling, & Control: A Hands-on Guide to Bringing Projects in On Time and On Budget. 4th ed. New York: McGraw-Hill, 2005.
  • Project Management Institute (PMI). A Guide to the Project Management Body of Knowledge (PMBOK® Guide). 3rd ed. Newtown Square, PA: PMI, 2004. Available from: www.pmi.org

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