Project Management

What is a project?

A project is a unique set of co-ordinated activities, with definite starting and finishing points, undertaken by an individual or team to meet specific objectives within defined time, cost and performance parameters as specified in the business case. It should have the following characteristics:

• a finite and defined lifespan
• defined and measurable business products (that is, deliverables and/or outcomes to meet specific business objectives)
• a corresponding set of activities to achieve the business products
• a defined amount of resources
• an organisation structure, with defined responsibilities, to manage the project.

Projects should contribute to business objectives; typically their funding is identified as part of business planning. They may be part of an overall programme of business change.

What is project management?

Project management is much more than the tasks carried out by a project manager. Project management is a combination of the roles and responsibilities of individuals assigned to the project, the organisational structure that sets out clear reporting arrangements and the set of processes to deliver the required outcome. It ensures that everyone involved knows what is expected of them and helps to keep cost, time and risk under control.

Why use project management?

Experience has shown that projects are inherently at risk - through overrunning on time and cost and/or failing to deliver a successful outcome. Such failures are almost invariably caused by:

• poor project definition by the project's owner, perhaps because of insufficient consultation with stakeholders or their failure to be specific about requirements and desired outcomes
• lack of ownership and personal accountability by senior management
• inadequately skilled and experienced project personnel
• inadequate reporting arrangements and decision-making
• inconsistent understanding of required project activities, roles and responsibilities.

Project management helps to reduce and manage risk. It puts in place an organisation where lines of accountability are short and the responsibilities of individuals are clearly defined. Its processes are clearly documented and repeatable, so that those involved in the project can learn from the experiences of others.

It is recommended best practice that a formal project management methodology such as OGC's PRINCE2 is adopted for all major projects. The principles of project management are equally valuable for smaller and/or less complex projects. The nature of your project will determine the project management approach you need, which should be adapted as required.

 

Critical success factors

Successful projects have:

• a well-defined scope and agreed understanding of intended outcome
• active management of risks, issues and timely decision-making supported by clear and short lines of reporting
• ongoing commitment and support from senior management
• a senior individual with personal accountability and overall responsibility for the successful outcome of the project
• an appropriately trained and experienced project team and in particular a project manager whose capabilities match the complexity of the project
• defined and visibly managed processes that are appropriate or the scale and complexity of the project.

For cross-cutting projects, there may be nominated senior owners from each organisation involved in the project and its delivery. Where this is the case, there must be a single owner who is responsible for the whole project.

Roles and responsibilities

Essential roles and responsibilities are:

• investment decision-making - takes the investment decision based on affordability and cost justification (may be known as the Investment Decision Maker or IDM)
• ownership - defines the scope and content of the project for delivering the benefits; personally accountable for the success of the project (usually known as the Senior Responsible Owner, as this role must be taken by a senior individual in the organisation). The SRO should have the status and authority to provide the necessary leadership and must have the clear accountability for delivering the project outcome
• interface between ownership and delivery (sponsorship/directing)- ongoing management on behalf of the owner to ensure that the desired project objectives are delivered; must have adequate knowledge and information about the business and the project to be able to make informed decisions (may be known as the Project Sponsor; sometimes referred to as the Project Director)
• project management - leading, managing and co-ordinating the project team on a day-to-day basis (the Project Manager)
• project team - delivers the required outputs or deliverables (the Project Team)

In addition to the essential roles described above, there will be a requirement for specialists, design consultants such as architects, and others who are appointed by the Project Sponsor/Project Director or Project Manager.

For larger or more complex projects there may be a Project Board chaired by the SRO. Membership of the Project Board, which is through formal appointment by the SRO, should be a single role representing key stakeholder interests (described in more detail below) and a single role addressing technical/supply issues (typically a representative from the supplier organisation). The Project Board provides the owner with stakeholder/technical input to decisions affecting the project; ultimate authority and accountability resides with the SRO.

There will always need to be active project assurance - to assure the owner that the project is employing good practice - making sure stakeholders are being consulted appropriately and their needs are being addressed, for example. Project assurance is ultimately the responsibility of the SRO and will be included in the responsibilities of project board members, or may be fulfilled by individuals external to the project acting on behalf of the owner.

In practice, some roles may be combined, subject to an overriding proviso that the person combining the roles possesses the requisite competencies, experience, expertise and time. For example, the roles of Project Sponsor/Director and Project Manager can be combined for smaller or straightforward projects, or project ownership and project sponsor/director combined where the responsibilities of both roles can be fulfilled by a single individual. Where roles are combined the allocation of the functions must always be absolutely clear, with delegations and responsibilities that do not overlap. The role of Project Manager should be clearly defined and implemented, and not simply another member of the project team. Where two roles are combined, the person appointed must have at least the authority and status of the 'higher' role; however, it is important to note that the roles of Investment Decision-Maker, Senior Responsible Owner and Project Sponsor/Project Director cannot be allocated to a single individual.

See the Role Descriptions for detailed descriptions of each role.

Project organisation: the management environment

Management structures to support decision makers and undertake the day-to-day activity of project delivery should have clear lines of reporting and decision taking. The figure below shows a structure that illustrates the relationships between the roles. Note that it may not be necessary to include every role, as described in the section on roles above.

Figure 1: Project organisation

Reporting and decision making

The important points to note about reporting and decision taking are:

• lines of reporting are kept as short as possible and very clear
• delegations and individual responsibilities for decision-taking are clearly established at the outset and understood by everyone involved in the project.

Experience has shown that, where these conditions are not met, the likelihood of conflicting, poorly informed or delayed decisions puts the project at unnecessarily high risk.

Stakeholder management

Stakeholders are those individuals or groups who will be affected by the project. They could include senior managers whose business areas are directly or indirectly involved, the end users (including customers outside the organisation), suppliers and partners. Effective project organisation facilitates management of the stakeholders' interests, including the resolution of conflicting objectives and representation of end-users who may not be directly involved in the project. Stakeholders' interests can be managed through user panels providing input to the requirement specification. For larger projects, there is usually a project board, with a senior individual nominated to represent the stakeholders' interests.

Project lifecycle

Projects have three distinct phases, as shown in Figure 2. These are:

• preliminary activities of start-up, scoping and defining what is required
• running- managing the project, broken down into appropriate stages
• closure - the end of the project, together with assessments of how well the project was conducted and whether the expected benefits were achieved.

Figure 2: Project lifecycle

An important task, once the need for the project has been established, is to determine how it is to be delivered; this helps to reduce risk. Depending on the project's scale and complexity, it may be appropriate to break it down into more manageable blocks of activity or stages or to implement the project in incremental steps. (See the briefing on Modular and Incremental Delivery and Prince 2 for more information.)

Gateway^TM reviews
All procurement projects in UK civil Central Government are subject to Gateway Reviews (for more information about Gateways see the Gateway™ workbooks. The Gateway process sets out good practice and useful questions to ask when carrying out a significant project, whether or not it falls below the Gateway threshold and whether or not it involves external procurement. Some projects may only cover part of the Gateway decision points (for example, development of a detailed requirement may be carried out as a discrete project); others cover all the decision points from the initial strategic assessment through to final benefits evaluation.

Preliminary activities, including getting started and initiating a project

The activities described below will be broadly similar for most projects, although the precise terminology and project documentation may vary.

Getting started is a short pre-project process gathering basic information about why the project is needed, what the project should deliver and whether it is feasible. It plays an important role in reaching an agreed understanding of project scope and securing commitment from senior management.

The main objectives of this phase are the following:

• Ensure that the aims of the project are known and agreed.
• Appoint the owner of the project (SRO)
• Design an appropriate organisation structure for the project and appoint individuals to the roles. Ensure that delegations and responsibilities are clearly understood and do not overlap, especially where roles are combined. Appoint role/s for the day-to-day management of the project. For small or straightforward projects there could be a single role combining the interfaces with the SRO and with the project team (Project Sponsor/Project Director combined with Project Manager). For major projects there will typically be separate roles for:
  -client-side activities to manage the business requirements, providing the interface between the SRO and the external project manager and team (Project Sponsor/Project Director)
  -supplier-side activities, with a project manager leading and managing the project team (Project Manager)
  -Form the project management team (including Project Board, if required)

Decide on the approach that will be taken within the project to provide a solution. Establish whether the project exists as a single/discrete entity, has relationships with other projects or is part of a larger programme of work. An important factor for success is to ensure that the project boundaries and interfaces with the wider business environment are clearly understood.

Fig 3.3 Aligning operations and projects with strategy

Project initiation involves clear definition including the clarification of scope, resources, responsibilities, and plans. This activity is dedicated to establishing a firm foundation and planning the work to be done. A key purpose of this activity is to draw up an agreed way forward based on the initial scope to ensure there is a common understanding of the rationale and aims of the project. This includes planning how quality is achieved and the subsequent work will be conducted. The level of risk for the project needs to be determined at this point.

Project organisation is determined as an essential task in the start-up activities. The roles are assigned (investment decision maker and other key roles); project management responsibilities assigned and the project team assembled. If required, the project board members are nominated at this point. Delegated authority for each role is determined and reporting arrangements confirmed, to ensure that everyone knows what is expected of them and that the routes for reporting are clear. Corporate management should confirm their formal approval before the project continues and work begins.

Running the project
The complexity and context for the project will determine whether the implementation phase of the project is carried out in a single stage or broken down into two or more stages so that appropriate levels of management control can be applied. Each stage ends with a decision point on whether to continue with the project or not; this is a stage boundary, a control point in the project when progress and deliverables are reviewed by senior management before approval to proceed to the next stage. Where applicable, these decision points are preceded by Gateway reviews.

Planning and controlling each stage as well as managing product delivery are key project management processes that are supported by Project Plans (see below) and reports against such plans. Monitoring and control activities need to be in place to ensure that a stage stays on course and responds to unexpected events

End of the project: closing/evaluating
At the end of the project the customer organisation will want to know how well it conducted the project and whether the expected benefits have been achieved. Project closure is a formally controlled process, whether the project has completed to plan or was stopped prematurely. It is closed down on agreement by senior management to an end of project report and lessons learned report (see below)

A post project review or post implementation review should be undertaken subsequently to confirm whether the expected benefits have been delivered and realised. This information should be fed back to senior management, as it will inform other projects underway or planned.

Project management processes

Planning
Planning provides everyone involved in a project with a common baseline of information and ensures that everybody understands the project objectives. Plans will also establish a basis for dealing with risks, issues and changes and help to achieve good quality products.

Plans are developed during project start-up and initiation; they are monitored and updated throughout the life of the project. Depending on the scale and complexity of a project, different levels of plans might be required. The project plan could be broken down into stage plans; typically these are produced in outline and are further developed as the next stage. When it is predicted that a plan will no longer finish within the agreed allowances for cost/time/risk, an exception plan may be produced to supplement that plan.

It is essential that a clear scope is established and agreed before undertaking detailed development activities. Techniques such as stakeholder analysis can be used to clarify requirements.

Good planning is a pre-requisite for applying appropriate controls to achieve the aims of the project. A number of control parameters will need to be managed such as risk, quality, benefits/costs, change and issues.

Risk management
Throughout the life of a project there will be risks that need to be managed, to reduce the likelihood and impact of unwanted outcomes such as time and cost overruns as a result of changes in the business environment. There should be a Risk Management Framework that is applied consistently across the organisation and a Risk Management Strategy for the project that takes account of the wider business perspective as well as the immediate risks associated with the project. Where suppliers and/or partners are involved in the project, it is essential that there is a shared understanding of risk. There may need to be contingency plans and risk allowances (funding and time) allocated to allow for the possibility of (for example) delays or failure for a service to be taken up. A Risk Register or Risk Log is a key tool for managing risk, which must be reviewed and updated continually throughout the life of the project. Responsibility and ownership for managing risks must be assigned to individuals with the authority to take appropriate action on risk. See OGC's guidelines on managing risk for more information.

Quality
Quality management ensures that the expected quality of the project's products and deliverables is achieved. A Project Quality Plan defines the key quality criteria and quality control processes to be applied to project management.

Benefits management
Benefits management is the identification of potential benefits, their planning and tracking, the assignment of responsibilities and authorities and their actual realisation. There should be a Benefits Management Strategy to ensure that benefits are achieved as expected. A Post Implementation Review assesses whether the benefits have been achieved, whether more could be done and any opportunities for further improvements.

Change Control and Issue Management
Any changes that are required during the life of the project must be formally planned and controlled to ensure that the impact of change stays within agreed parameters; there should be a documented change control procedure. The cost, time and quality parameters associated with the project should be established before implementation and monitored throughout the life of the project. All proposed changes should be costed and their effect on the overall project established before they can be authorised to go ahead.

Issue management is closely linked to risk management. Issues such as the potential for conflicting stakeholder views need to be closely monitored through an Issues Log and appropriate action taken if they become risks to the project.

Project documentation

Project documentation is developed to support the project activities, often referred to as "products" as such documents are deliverables of the project management process. These products help to ensure the smooth progress of plans and provide a clear audit trail of decisions taken. A minimum set of products is outlined below. See the Product Descriptions section of the Toolkit for details of each product, to be tailored as required to meet the needs of your project. See also the reference section at the end of this briefing for details of additional products that may be required.

At start up
The information to support project start-up is a Project Brief.

The Business Case is a key document, which describes the justification for setting up a project. It drives the project activities and demonstrates that the project continues to be viable. The Business Case is developed in outline during this stage and is continually updated throughout the project life cycles.

All the information describing what, why, when, who, and how for the project is collated into a document or set of documents known as the Project Initiation Document.

For construction projects this information is usually combined in a Project Execution Plan (PEP).

During project running
The key documents are the Project Plan or Project Execution Plan and the Business Case, all of which are continually reviewed and updated during the life of the project. A Risk Register is also maintained throughout the project, to capture details of major risks and actions taken to deal with them.

At project closure
Documentation includes an End Project Report and Lessons Learned Report of the project. This is to ensure that any follow-on work such as contract management is assigned and the lessons learned from the project are collated and available for others to refer to.

There will be reports on Post Project Review or Post Implementation Review, which document whether business benefits have been realised and recommendations for future improvements.

The Project Management Workbook provides a further detailed step by step guide.

Further information

See Project Management Workbook

Briefings and guidelines
Common Causes of Project Failure: briefing for senior management

Procurement Guidance for construction projects:
See the Achieving Excellence in Construction Guides for guidance

The Gateway Process
Leadership guide and workbooks

Guidelines on managing risk

Guidelines on procurement projects

Reference guides
Managing Successful Programmes

Managing Successful Projects with PRINCE2

Role descriptions
Investment Decision Maker

Senior Responsible Owner

Project Sponsor / Project Director

Project Manager

Project Team

Professional advisers

Project Board

 
Product descriptions
These include:

Business Case

Project Brief

Project Initiation Document

Project Plan

Project Execution Plan (for construction projects)

Risk Register

Quality Plan

Benefits Management Strategy

Lessons Learned Report