Project Management: The Extensive Guide

Project management is a priority at nearly every organization because it sets clear expectations for what can be delivered, by when, and for how much money. It unites teams and coordinates their efforts. Without it, projects can veer off deadline and out of scope.

Because organizations need good project management, detailed bodies of knowledge teach how to manage projects, and people spend entire careers building this expertise. When projects are managed well, teams do more than deliver what’s been promised. The result is often full strategic alignment between teams, departments, and the entire organization.

If your organization is learning about project management, this article is your “getting started” guide. The chapters below explain what strategy managers need to know about this discipline: what project management is, when to tie projects to strategy, life cycle stages, a template and example, methodologies, and software.

Chapter 1: What Is Project Management?

Project management is the application of skills, knowledge, and tools to plan, launch, execute, manage, and close the work of a team to achieve specific goals within specific timeframes. This “work” is a project. Your organization needs to define what a project is and how to separate it from a program or portfolio, both of which need different management methods.

Project Vs. Program Vs. Portfolio Management

With similar spellings and common misuse of the terms, it’s easy to confuse projects, programs, and portfolios. They are not the same, and it’s counterproductive to lump them all under the project management discipline. Here’s where the differences lie:

‍Project

A project has a start date, end date, percent complete indicator, and a budget. It also has an owner. Projects range in size, from something as small as redesigning a sales process to something as large and capital intensive as building a bridge. Ideally projects are linked to strategic objectives, but sometimes they are not.

Program

A program is a group of projects aimed toward a particular goal. For example, if you are a municipality with a goal to improve safety, you may have a program related to one land corridor made up of projects to improve lighting, repair the streets, police neighborhoods, etc. Projects are a subset of a program. A Program Management Dashboard allows you to understand how your projects are impacting your program.

‍Portfolio

A portfolio is a group of projects within one business unit or department. The portfolio owners (or office) are responsible for managing the budget and resources, while ensuring projects are strategic and will help the entire organization execute its initiatives. The owners answer questions like, “How much money are we spending on our projects?” and “How do we prioritize our spending?” The portfolio office must also be aware of potential conflicts, like redesigning a sales process for a product or service that will soon be discontinued.

Projects, programs, and portfolios overlap, but each needs its own skills and tactics to manage. This article focuses only on project management.

Project Management Basics

In organizations worldwide, project managers are typically required to get one of two certifications: the Project Management Professional (PMP) from the Project Management Institute, or PRINCE2, which was originally developed by the U.K. government. Each certification teaches a different approach, but some basic elements span both the PMP and PRINCE2 frameworks.
Here are the three foundational components of project management:

1. Determine all the steps involved in a project and put them into a timeline. This methodical, step-by-step process is the basis for everything that comes next.
2. Identify resources needed (human, technological, financial, etc.) and their interdependencies. For example, don’t schedule one person to be in two different places, or try to begin erecting a structure in a construction project before the foundation is built in the prior phase. Finding and balancing resources is one of the most challenging parts of a project manager’s job.
3. Plan for contingencies. The project scope may change over time, perhaps due to priority shifts handed down from senior leaders or politicians. Or you may run into unexpected problems, like bad weather, dwindling raw materials, or inspection failures. No project goes perfectly to plan, so prepare for the unexpected.

These basics are straightforward for simple projects. As your projects grow in volume, size, and complexity, choose either a PMP or PRINCE2 framework to keep execution on track. If you want more than light reading, check out these project management books.

Next, we cover the types of projects your organization might undertake, and why the most valuable ones link to your strategy.

Chapter 2: When & How To Tie Projects To Strategy

Strategic project management always starts with the strategic plan (no surprises there), but not every project ties clearly to your plan. Linking some projects to strategy can be counterproductive. This chapter explains how to decide which projects count as strategic and how to build a framework around them.

How To Know When A Project Is Strategic

A project is strategic if it’s put in place to drive the execution of the strategy itself and, if implemented correctly, brings your organization closer to achieving its key goals and KPIs. These projects are tracked within your strategic plan and reported on at the executive level.

Projects that aren’t strategic are typically operational or tactical. Some might even be called tasks or tactics. They only loosely tie to the strategy and don’t need to be discussed with leadership teams, because they are generally inexpensive, don’t require budget approval, and can be managed deep within the organization.

For example, improving a maintenance program on capital equipment is a project that will generate time and cost savings for a department, but it wouldn’t be constructive (or logical) to tie it to the strategic plan.

Other non-strategic projects are regulatory in nature, such as changing an accounting process to comply with a new tax code or implementing environmental safeguards to meet updated standards. These projects are important and will require resources, but they don’t link closely to any strategic goals and therefore shouldn’t concern the entire executive team.

Some projects in your organization can’t be categorized at all. The most dreaded is the pet project. Handed down from someone on the leadership team, this project has no clear reason for existing and lies far outside the strategy. You should use the framework below to call out these projects for what they are. It is a chance to focus the organization on what matters.

All projects need to be managed with an appropriate process (as described in Chapter 1) and will have budgets and timelines. The trick is knowing when a project is strategic. Once you know which projects qualify, you need to link them to your strategy.

A Framework For Linking Projects To Strategy

Strategic projects should primarily be linked to your internal and learning and growth (people/culture) perspectives. These are the areas of your scorecard or strategy with leading indicators. In the for-profit world, a strategic plan includes both leading and lagging indicators. Projects typically tie to the goals of your strategic plan, and leading and lagging indicators guide how they link to it.

• Leading indicators help organizations predict trends or changes. Common examples occur within operational, learning and growth, and capability perspectives. Leading indicators typically measure the inputs or particular processes that drive strategic change. If you know what drives real change in your organization, tracking leading indicators can be powerful.
• Lagging indicators assess what happened in the past, such as the previous year or quarter. These include your finance (revenue, expenses, profits) and customer (growth, retention, satisfaction) perspectives.

Leading indicators impact and drive changes in lagging indicators by creating or improving processes to reach specific goals and KPIs.

For example, a municipality might link a project to build a new bridge with its goal to improve safety and transportation, and thereby improve customer (citizen) satisfaction. A for-profit company can link product development research projects to its goal to improve product innovation, which would then drive revenue. Or strategic projects around building better work environments or creating career paths can tie to learning and growth goals and increases in employee retention rates.

When linking projects to strategy, keep your scope realistic. Within one planning cycle, we typically don’t see more than 8-12 projects tied to the strategy at any specific level within an organization, such as the operational (business unit) and strategic (executive) level. So while the organization might have 40-50 strategic projects, each leadership team would only be focused on the top 8-12.

You will have many more projects at the department level that ultimately link to the strategic plan, but these projects should be discussed and managed within the business unit and won’t ever be exposed to the executive team. Certain projects, however, may be executed at the business level, and monitored at the executive level. For example, if a nuclear power plant is being pulled offline for regular maintenance, that project will be handled by the operations department, but tracked by the leadership team because of the significant impact to the overall business.

Remember This...

When thinking about projects, ask yourself which ones need executive-level attention. You should be able to link those projects to the goals of your strategic plan, and have a method of reporting on progress to your leadership team. Projects that don’t need executive-level attention still need to be managed well within your departments and project management office. Ask whether they are critical from an operational standpoint or if they are pet projects that should be rationalized.

No matter what kind of project you’re working on, it will follow the same general path to completion. We’ll walk through those stages next.

Chapter 3: Project Management Life Cycle Stages

All projects follow a logical path from start to finish, called the project’s “life cycle.” While there’s no consensus as to the exact number of stages in the life cycle (opinions range anywhere from four to six), the most common model has five. Either way, dividing projects into stages makes them easier to manage and monitor. The five stages are:

1. Project Initiation
2. Requirements Definition and Planning
3. Project Execution
4. Performance Monitoring
5. Project Closeout

Here is each stage in more detail.

1. Project Initiation

The project initiation stage lays the foundation for what’s to come and gets your project off to a good start. Two important steps happen in this stage:

• You’ll tie the project to a business need, demonstrating its value. If you don’t already have a business case for the project, now is the time to write one. A business case explains why the project is worth doing.
• You’ll outline the basic information surrounding the project. This information is contained in a project charter (sometimes called a project brief) and usually includes:
• The purpose—Why are you taking on this project? Does it solve a particular business problem, or will it help you achieve your strategic objectives?
• Requirements/resources—Who will be involved and what are the expected costs? (No details necessary at this stage.)
• Known risks—Make everyone aware of the potential pitfalls. For example, you may have a tight budget, or, if it’s a new offering for customers, concern about their acceptance of the end result.
• High-level description—State the project objectives and milestones.
• Key stakeholders—Indicate the project manager, as well as the team carrying out the tasks.

The project initiation stage happens before a project is approved and planning begins. It typically ends with the project kick-off meeting.

2. Requirements Definition And Planning

Once the project is given the green light, it’s time to start planning in more detail. In this planning stage, think through and clarify a few factors:

• Timeline—Create a detailed breakdown of the required tasks, building in milestones and due dates. Use Gantt charts to show a visual representation of the work breakdown structure, like the one created in ClearPoint below.

• Budget—List the resources needed to carry out the project and make a plan for allocating funds. Include costs for personnel, equipment and supplies, and travel.
• Risk management—Identify risks and their sources, and make plans to minimize negative outcomes.
• Task assignments—Assign ownership of specific tasks to the appropriate team members. Clear ownership moves the project along more smoothly and gives team members a sense of personal responsibility for completing their tasks.

When you can confidently address all the above items, you’re ready to move on to the execution stage.

3. Project Execution

This is where the real work happens. You’re executing the plans you’ve made and realizing the value of the project for your strategy and organization.

Depending on the project methodology, organizations move through the execution stage differently. For example, those using a waterfall methodology will complete tasks sequentially in chronological order, building before testing, and may hold weekly status meetings. Those employing an agile approach build and test in repeated cycles, making improvements along the way. Agile teams also tend to meet more frequently, sometimes daily, for status updates.

Whatever the approach, your objective is to deliver the end result as described in the project charter and according to the specifics outlined in stage 2.

4. Performance Monitoring

Performance monitoring happens in tandem with the project execution stage. Here, you’ll track project performance and progress against the project plan defined in stages 1 and 2. Below are some ways to think about “scoring” your performance for evaluation purposes.

Budget

Decide whether to spread your budget evenly over the timeline or align it with the work, allocating more money to the months that require more resources and expenses. For example, if a 12-month project has a total budget of $1.2 million, you can allocate the budget evenly at $100K per month or proportionally depending on where certain tasks fall on the timeline. The option you choose will determine how you track spending and report whether the project is financially on track.

Easily keep track of your projected budget to the real cost of projects. Use a Project Budget Dashboard.

Timeline

Your timeline establishes the time frame for your progress reporting. If you begin on January 1 and end on December 31, then it’s a 365-day project timeline. In theory, you should be 50% complete around June 30, but some project stages may take longer than others, and you’ll need to reflect that in the reporting. You may also start late or change the end date, in which case project managers must recalibrate deadlines and then accurately report on the project’s updated timeline.

Quality & Effectiveness

This is the hardest but most important dimension to manage: how you know the project succeeded, beyond finishing on time and within budget. For example, if you build a bridge that collapses or needs repairs earlier than planned, it won’t matter if it was completed on time and on budget.

You need an objective measure to assess quality and effectiveness. In some cases, organizations have third-party inspections for quality assurance. Others use customer feedback. There are many ways to score quality and effectiveness. What matters is that you create consistent rules for your organization to follow.

Some projects can be measured while they’re underway (such as testing a tutoring program or managing a drug trial), while others can only be measured when they’re complete (like building a bridge).

Percent Complete

Each organization uses a different “formula” to calculate percent complete. It could be an average of all the project milestones, or some milestones could be weighed more heavily at different levels. For example, if you have a milestone that accounts for 50% of a project, it should theoretically weigh more than other milestones. Using the Upward Airlines example, here’s what your project management template might look like when milestones are in progress and the percent complete metric has been calculated:

Once the above determinations are set, your organization will have a consistent (and honest) way to measure progress.

Reporting Frequency & Responsibility

Reporting is an important part of performance monitoring because it helps make sure the project team is on track and held accountable, while also informing outside stakeholders about progress. But determining when to report and who is responsible for reporting can be more complex than it sounds.

Clearly defining who reports, and when, is critical to your project’s success. If reporting is overlooked or mishandled, you risk loss of funding and support for the project. You also don’t want to have a budget or leadership meeting with only half your projects containing up-to-date information.

5. Project Closeout

Every project needs closure to officially free up resources for other projects or tasks. This closeout stage also provides an opportunity for an after-action review, a post-mortem to evaluate if the project objectives were met and discuss which aspects of the project management cycle could be improved for next time. While it’s helpful to discuss how effectively the project was managed soon after completion, it may take some time before you can know how well each specific objective was met.

Now is also the time to reward your teammates for a job well done and integrate the project results into your new way of doing business. If your project was to rework a current process, then the new process should now be the default. If it was to design a new product, then the design should be complete and handed off to manufacturing or process improvement. The point of the project was to improve something, so close it out and make the result part of how your organization works.

Chapter 4: Project Management Template (& An Example)

Phase 4 of the life cycle above focused on performance management for projects; this is where a project management template comes in handy.

Performance is hard to evaluate in part because projects can differ widely within a single organization. Building a road, launching a new product, and reducing the time it takes to complete a routine process could all be projects. Some projects are even framed differently than others, identified by their intended outcomes, like “X% improvement in Y” or “Reduce time to accomplish Z.” That range makes consistency difficult, so use a standardized reporting template.

Project Management Report Template

Project management report templates can vary in look and feel, but all should have these important elements:

• Start Date and End Date: These dates are self explanatory, but you’ll often see them at the top of project management report templates for a reason: Defining the timeline creates a foundation for all other template elements.
• Description: Also called the scope or charter, this is where you clearly define the project from a strategic standpoint. Why are you doing it? What do you hope to accomplish? How does this project tie to the strategy? (It might not...see Chapter 2.) You don’t need to write a novel, but communicate your justification for the project and its “features and benefits.”
• Owner:  Clearly stating who’s responsible for the project will prevent confusion and ambiguous expectations. The owner is accountable for the execution and management of a project, from scheduling to resource planning. The owner will likely have others who assist with the execution and take charge of individual milestones. Regardless of what duties are delegated to others, the owner bears ultimate responsibility for the project. Separately, a project “champion” should sit at the leadership table. This person will report on a project’s high-level progress, providing context and details. The champion should also be able to communicate down to the team if priorities, budget, or timing shifts. If a champion is not included in executive meetings, that project invariably gets deprioritized or defunded. If all these roles are neatly defined, you’ll have the proper level of leadership for projects.
• Milestones:   Every project must be measurable in some way, or you can’t show progress. Your project management plan template should include milestones that track the status of a project along all its phases. In a perfect world, you’d display milestones in multiple views, such as in summary lists and Gantt charts.
• Budget:  Each project should have a budget before it is initiated. If you hope to start a project and find the money later, the project is likely doomed. The budget should include money for project management and contingencies (risk factors). Whoever is creating the project management report template needs to understand where the budget originates and how it fits into the way your company strategically budgets, because budgets can change from year to year. Knowing where the money comes from will help you maintain funding for your project. For example, if your project is funded by an operational budget, you need to partner with that department’s finance executive. This will ensure you’re not overspending or underspending, and keep the project appropriately budgeted for the next planning cycle. Projects are typically funded from one of these three budgets:
• Strategy Execution—Not all companies have a StratEx budget, but it’s a good way to track spending on strategic projects. This approach aligns a portion of your organization’s budget directly to strategic projects or initiatives. (This is different than putting a budget against each of your divisions or departments.) If you don’t have a StratEx budget, you still need a way to budget for your projects, either within work plans, department budgets, or other areas. Some StratEx budgets are aligned by departments and others by strategic goals.
• ‍Operational Expenses—The OpEx budget is a common source of project funding because most projects can easily be categorized as part of a company’s day-to-day business operations. It’s hard to plan for long-term projects using OpEx, but some organizations make it easier by doing multi-year budgeting.
• Capital Expenditures—Many people use CapEx as a way to track large, expensive projects, such as construction projects. CapEx are asset purchases and categorized as investments, which means there has historically been a beneficial tax treatment for these types of expenses. Be aware that not all projects fit into this category, so you need to understand exactly what would qualify as a CapEx to ensure your organization is tax compliant.

Are your project management reports wildly inconsistent? Use this template to standardize reporting for everyone in your organization.

Project Management Plan Example

The pieces of a project management template are easier to understand in an example. Here is one from the fictional Upward Airlines. This Employee Satisfaction Survey project has all the elements we just described: start and end dates, description, and budget. You’ll also see how the milestones can be displayed in two different formats, which aids both organization and readability.

Projects vary widely even within a single organization, and so does the way you carry out projects. The next chapter covers some of the most popular project management methodologies being used today.

Chapter 5: Project Management Methodologies

Separate from the general phases of project management we discussed in Chapter 3, project management methodologies provide structure for the launch and execution of projects. Each methodology below is well-known and commonly used, and each has pros and cons that suit it to certain types of projects.

The major project management methodologies in use today are:

Agile

Agile is a common project management methodology based on fast, continuous improvement. Originally popularized by software developers, it has been adopted by all types of teams and industries.

Agile uses sprints, which are short project cycles, to continually release enhancements to products or services. The flexibility of sprints allows for last-minute changes and can result in a higher quality deliverable. Agile is best suited for project teams that need flexibility and speed (in comparison to the next methodology, Waterfall, which is ideal for teams that need a clear, fixed plan). Agile is generally more fast-paced, people-centered, and repetitive than other methodologies.

Waterfall

Waterfall is one of the simpler strategies to implement and is ideal for short, uncomplicated projects. It is linear and sequential: list tasks in order and check them off as you go. A task cannot be initiated until the previous one is complete, and you cannot return to a previous task. (Done is done.)

In general, traditional waterfall project management is a good fit for projects that can be planned from beginning to end before they start; don’t require work on multiple phases at the same time; and have a clearly defined product and process. Both the construction and manufacturing industries have long used waterfall project management.

Scrum

Scrum is a type of agile methodology. While agile is more of a set of guiding principles, Scrum works within the agile framework to provide a specific set of rules for project management. This includes processes for identifying tasks, resources, completion dates, etc. Scrum is designed for fast delivery, with rapid feedback cycles and responsive change. Close collaboration is central. Teams work on sprints together and have short, daily standup meetings to report on progress. Each sprint must produce a usable product.

Scrum is an iterative methodology largely used in the software industry for product development, but can also be applied to smaller projects that involve a high level of productivity and require intensive refining.

Kanban

Kanban is a flexible project management approach that promotes continuous collaboration and emphasizes visualization of work, typically through a collection of boards and cards. It moves tasks along stages of a defined workflow in assembly-line fashion. This methodology is also a subset of agile, but is more flexible, with efficiency being the primary goal. Kanban uses a “board” view to map and visualize team progress on tasks. There is a continuous flow of work, with backlogs being tackled by order of importance.

Kanban is ideal for teams that need constant output on a project and want to maximize efficiency (for example, you can leave tasks undone if others take priority). The strategy is popular with product development teams as well as automakers.

Lean

Lean is a bit different from the above in that it is a set of principles rather than a project management technique. It is a way of thinking that focuses on lean operational management, which is grounded in efficiency. Lean principles can be applied to any process; in the context of project management they emphasize the optimization of resources and minimizing waste, using a minimum amount of materials, equipment, labor, and space to complete a project. Lean and agile both center around the concepts of adapting to change and controlling risk, and so are often used in combination with one another.

The next chapter compares types of software that simplify everything from building reporting templates to tracking tasks and interdependencies.

Chapter 6: Project Management Software

Search for “project management software” and you’ll find a crowded field, so it’s no wonder the topic confuses many people. Narrowing down the online tools comes down to finding the right technology for how your organization handles projects. This chapter explains three types of project management software and the pros and cons of each.

Task Management Software

Task management software lets you organize and prioritize tasks and collaborate on them. This type of software visualizes project elements like timelines and stages with bulletin board, checklist, or “card” layouts. You can usually roll up tasks into bigger categories and roll down tasks into various forms of ownership. These platforms are generally user friendly with a “clean” design.

‍Task management systems are ideal for marketing projects, or intangible projects like campaigns and process developments/improvements. Asana, Wrike, Trello, Hubstaff, and Favro are leading task management platforms in the crowded field of project management software.

‍Pro: Great for process flows and working within teams.

‍Con: Limited ability to manage resource constraints and link between strategic objectives and KPIs.

Resource Planning Software

Resource planning software can be very useful for organizations. Tools like Microsoft Project, SmartSheet, and ProjectManager.com are superior at project and portfolio management from a resource allocation perspective. If you need to track budgets by task, owner, or moving interdependencies, this type of project management software could be a good fit. It’s suited for capital projects and projects that have tasks running in serial and in parallel.

‍Pro: Ideal for managing resource constraints and capacity, and centralizing planning.

‍Con: Tools and concepts can be overkill for business projects with nebulous or thought-driven tasks.

Strategic Project Management Software

Strategic project management is where ClearPoint’s technology fits in. This type of software allows you to track hundreds of projects across your organization, including the tasks associated with each. Like the previous types of project management tools, you can assign ownership and accountability, and build Gantt charts. ClearPoint’s software adds strategy management features.

You can:

• Give all projects and tasks red, amber, and green (RAG) status indicators for each reporting time period (typically monthly or quarterly).
• Measure and automatically evaluate projects according to the measurements discussed in the Performance Monitoring stage above.
• Identify project-associated risks and track action items associated with them.
• Link projects to KPIs or key goals. Even link the same project to different goals in different departments.
• Add an unlimited number of custom fields.
• Build flexible and filtered reports that can be exported to Excel or PDF, without back-end programming.
• Include both quantitative and qualitative data in your reporting to tell the story of project progress.

Pro: Efficient way to drive change by applying project management techniques to your strategic plan. It also works with any project management methodology.

‍Con: Not as applicable for organizations without clearly defined goals and KPIs. Cannot handle resource planning constraints.

See how ClearPoint tracks your projects and initiatives — book a demo

Start your project management software search by considering your needs.

When researching project management tools, think about what you need from the application: tracking hundreds of tasks through stages with intense collaboration, centralizing and managing resource constraints and planning restrictions, or linking projects to your strategic plan and showing how the results affect your KPIs. Knowing what you need will keep you from getting enamored with cool features in a short demo with project management software providers.

If you have any questions about project management or how ClearPoint’s technology can work for your organization, contact us.

If you’re not ready to chat and want to learn more, check out our Learning Center resources on project management.