My Simple Definition of Project Management
Like the above definitions of projects, definitions of project management are rather cumbersome and hard to understand by the normal person, or may even be confusing. To keep things simple, I prefer to refer to "project management" as:
"The competencies, techniques and tools that help people to define, plan and implement projects successfully."
However, there are two additional elements of this concept that I would like to highlight.
First, and as mentioned earlier, project management has a cost. Always. It adds a layer of overhead and oversight to the implementation of a number of activities. It requires resources and time (in the form of extra meetings, for example) for an organization, which similarly have a cost. According to studies, the project management costs for all phases of a project generally total somewhere between 7% and 11% of the project's total cost.
If additional project controls are added, such as external audits, project management costs will be in the 9% to 15% range. Project managers of small projects usually end up doing some of the project work and will have difficulty adhering solely to the project management role, but costs should be held to a minimum. A larger degree of project management can be justified for medium-sized projects, and the largest amount of project management should be applied to large projects, where the stakes rise along with the project's complexity and risk.
It is important to set some clear and objective criteria for what a project is and, in contrast, what should be considered day-to-day activities (or what I call "running the business"). Here as well there are different theories, yet I tend to be very pragmatic as often there is no black-and-white answer in what we do in each case. I recommend defining a set of criteria, such as:
- Size of the project in terms of budget (e.g. above 500,000 dollars or euros)
- Size in terms of duration (e.g. between 6 and 24 months)
- More than five fully dedicated resources or full-time equivalents
- At least three units, departments and/or regions impacted
- Linked to a strategic objective.
Projects that comply with a minimum of three of these criteria should be managed by professional project managers using project management processes, tools and techniques, including risk management. Such projects will also require setting up the right governance structure and monitoring mechanism to ensure the project is well executed.
The biotech company I mentioned above set some basic definitions. In this case, projects would be initiatives that required more than 500 man‑days and at least €400,000 investment, and that were of a transversal nature. The company was able to reduce its list of key projects from 400 to 25, which we then prioritized and staffed properly, significantly improving the projects" implementation.
14. Project Management: How Much Is Enough? (Project Management Institute), last modified February 1999, https://www.pmi.org/learning/library/project-management-much-enough-appropriate-5072.
15. Harold Kerzner, Project Management: A Systems Approach to Planning, Scheduling, and Controlling (Hoboken, NJ: Wiley 2009).
16. Editor's Note #1: From the sample criteria listed here by our author, it is clear that what he has in mind are projects like big infrastructure undertakings, such as capital projects, huge business adventures, or making war. However, it must be understood from the definitions of "project" discussed earlier, that some degree of project management is applicable to any size project in a range from getting breakfast from the first time, to an effort to forestall would-be environmentalists from saving the world. It is all a question of scaling the appropriate amount of project management to the size of the project in question. Nevertheless, in its simplest form, project management is just "plan before doing".
17. Editor's Note #2: In this case, it might have been better all round if the company in question had identified these particular projects as "Major Projects", and thereby avoid discouraging the application of appropriately scaled project management to their lesser initiatives as we are sure they probably did.