A technique to manage your business for profit
In a situation when SMB’s (small and medium size businesses) in North America is recovering from the worst recession of the modern times, their will power, strategic planning, and innovative ideas will help them in steering their way out of the choppy economy. Hence, if you are a SMB owner then it is time to re-look the way you are managing your business and act prudently before it’s too late. You should obtain unbiased opinion from expert consultants and fine tune your business to overcome the shock. Even if your business is doing well, it is advisable to get it checked periodically to maintain good financial health or increase efficiency; the way we get checked ourselves by health specialists to avoid reoccurring of disease or malfunctioning of our internal organs.
To identify causes for falling revenue or to find obstacles in increasing the revenue is a project and to research, investigate, advise and implement recommendations for change is project management. The project of change management goes through the entire process of your doing business including decision making, communication between different units or departments, operational lay out, financial position, manufacturing process, accounting process, distribution & logistics, sales & marketing, etc. Therefore, it is high time; you should understand the importance of project management to improve profitability of your business.
Project Management provides total control on your planning including finances and its execution with positive results. It lays down tools and techniques to initiate, plan, execute, monitor, control, and close your projects successfully. Therefore being a SMB, you should hire the services of experienced management consultants or a project manager, in executing the tasks of a project.
Management consulting versus project management:
Management consulting and project management are like what gloves are to hands. They go together. The end result of management consulting marks the beginning of a project of change management. Management consulting identifies the root cause of troubles or a drag on business causing shortfall in revenue and project management helps to implement the recommendations methodically and systematically.
Therefore, this article is going to be the first among many in making the concept of project management easy to understand. Every business is different and accordingly the size of consulting project would also be different. It may take a couple of days to weeks in investigating the causes, providing recommendations and bringing change into a business for increasing your revenue. The understanding of project management would also be helpful to you, if you are already participating in large private or public sector projects or planning to participate in one of them. In order to understand the concept of project management, we will have to understand what a project is, what is project management, what are its tools and techniques and how is it managed?
What is a project?
“A project is a temporary endeavour undertaken to create a unique product, service or result1.”
“This unique product or deliverable may be a product or artifact that is produced, quantifiable, and can be either an end item in itself or a component item. The unique service may be a capability to perform a service, such as business functions supporting production or distribution and the unique result may be the outcome of a document such as a research project develops knowledge that can be used to determine whether or not a trend is present or a new process will benefit society1.”
Since projects are temporary endeavours and create a unique product, hence on a basic level, a project can be any homework given by schools to their students or travelling abroad or raising funds for charity etc. On an advance level it can be anything ranging from building roads, bridges, homes, new vehicular models, power plants, space ships, development of new software, research and investigation, implementation of a unique plan or proposal or recommendations etc.
In case of a SMB (Small and Medium size Business), projects can be starting a new business or units or division or establishment of an overseas branch, installation of a new machinery or plant, developing or promoting new products and services, investigating causes for wastage and falling revenue, research and implement recommendations for increasing revenue, implementation of recommendations for improving operational efficiency, researching on factors affecting the operational cost, planning for change in management decision methods and improving communications with different levels or departments, participating in turn-key projects, business turnaround, business re-engineering, sales & marketing projects etc.
Since a project is the outcome of an aim or purpose, it provides direction and contains synergy in its successful implementation. However a project must have interrelated tasks to be executed over a fixed period of time with certain costs and limitations.
This is the reason that successful implementation of a project cannot be addressed within the normal operational limits of an organization. Projects are often utilized as a means of achieving an organization’s strategic plan, whether the project team is employed by the organization or is a contracted service provider.
“Project management is a methodology and application of knowledge, skills, tools and techniques to project activities to meet project requirements1.” A project is a temporary endeavour undertaken to create a unique product, service or result. Hence, projects are not ongoing efforts and it is different than the operation which is a continuous effort. In other words, operations are ongoing and repetitive, while projects are temporary and unique. Being temporary in nature, every project has a definite beginning and a definite end. The duration of a project may last from couple of days to several months and in every case the duration of a project is finite.
In case of SMB’s, the methodology of project management can be helpful in understanding and handling their small to medium size projects. The role of an experienced project manager/consultants include:
- Identifying requirements
- Establishing clear and achievable objectives
- Balancing the competing demands for quality, scope, time and cost
- Adapting the specifications, plans, and approach to different concerns and expectations of the various stakeholders1
Project Management Process Groups:
Project management is implemented within a framework of five main processes which are also called project management process groups. These are:
- Initiating process groups
- Planning process group
- Executing process group
- Monitoring and Controlling process group and
- Closing process group
Project management process groups are linked to each other by the objectives they produce. The output of one process generally becomes an input to another process or is a deliverable of the project. These process groups are overlapping activities that occur at varying levels of intensity throughout the project. If the project is divided into phases, the Process Groups interact within a project phase and also may cross the project phases.
Project Management Knowledge Areas:
In order to execute a project and coordinate various activities involved therein, the five project management process groups are implemented through nine knowledge areas depending upon the nature and size of a project. They are:
- Project Integration Management
- Project Scope Management
- Project Time Management
- Project Cost Management
- Project Quality Management
- Project Human Resource Management
- Project Communication Management
- Project Risk Management and
- Project Procurement Management
The nine knowledge areas lays down 44 processes to be undertaken while implementing the five project management process groups.
Besides those listed above, various tools and techniques are used to plan, identify, ascertain and comprehend project activities such as work break down structures (WBS), Critical Path Analysis, Delphi Technique, Earned Value Technique (EVT), Expected Monetary Value (EMV) Analysis, Influence Diagram, Gantt Chart, Pareto Chart, Parametric Estimating, Progressive Elaboration, Resource Leveling, Responsibility Assignment Matrix (RAM), Risk Mitigation, Rolling Wave Planning, Root Cause Analysis, Total Float etc.
In the next article, we will be discussing five process groups, their relevancy to your business and how they are going to help you understand project management, if you would like to turnaround your business for profit or become competitive or best in the products and services you are offering.
……..to be continued.
Suman Saran Sinha, CMC
1 PMBOK Guide, Third Edition.