What is Project Management? Definition and Importance

Project management is about knowing and understanding the goals, how you will achieve them, what resources you’ll need, and how long it will take you to reach them. For example, the construction of a new building or the creation of a new piece of software are initiatives that require project management to ensure their successful launch.

The discipline is an organized manner of managing a project from a defined beginning to a defined ending.

What is a project?

A project is a temporary endeavor with a defined objective by a team or individual to create a specific outcome. It has a beginning, middle, and end and involves planning, executing, and controlling resources (such as time, money, and people) to achieve the desired results. Projects can range from small, short-term efforts to large, complex, long-term initiatives. In a nutshell, a project is a goal-oriented, organized effort.

Project examples:

• construction of a new building
• launching a new website
• developing a new drug
• replacing a manufacturing process
• renovating a house

All projects need a structure. Hence, the complexity and length of the project are equivalent to a more advanced and detailed project plan.

Almost every project goes through these five steps during its life cycle. Some consider that project execution is done together with monitoring activities:

1. Discover what the client needs to determine the project’s goals.
2. Elaborate a plan that will tell you what needs to be done, by whom, how much it will cost, and when the project should be delivered.
3. Start working.
4. Check if work goes according to the initial plan, identify problems, and make adjustments.
5. Deliver the project and close all contracts once the client approves.

To know more about these, check out this guide to the four essential project management phases.

In charge of the planning and execution of a project is the “project manager.” He ensures everything follows the client’s vision, budget, and quality standards. He’s held accountable for the project’s success or failure. A product manager, or the product owner, on the other hand, focuses on product development, making sure the product aligns with business goals.
(Read more on product vs. project manager roles here).

People have been “managing projects” daily for centuries. They went from using traditional tools like pen and paper to advanced project management software or a work management system. Today, these tools are indispensable.

Currently, there are customizable tools used in project management to speed up and ease the entire work process of small teams. As well as determining the best project planning and charting the correct order in which tasks should be completed. For this, check out our top software for Gantt charts.

Take a look at this visual representation of what project management is to understand the concept better:

The importance of project management

Why is project management critical? Without project management, a project’s development would be chaotic.

The discipline’s primary goal is to ensure that everyone involved in a project knows what needs to be done, how much time they have to complete an activity, what resources are available, and whom they should talk to if they encounter a problem.

If everybody knows what they must do, there will be much higher chances of meeting the project’s requirements. Also, mistakes requiring additional fixing time are eliminated from the start. These could lead you to lose important data and resources in the process.

But what makes project management successful? Its main goal is to ensure the final success of a project.

A project is successful when all objectives have been reached on time and within budget, and the client is pleased with the quality of the project.

For example, you’ll have to keep an accurate log of work hours with the help of time-tracking software to see whether you pulled the project off in the set time. Then, you can compare and analyze the initial project estimates and final costs to assess your profitability.

What are other key indicators for project success? Here are a few: SMART goals and OKRs met, a straightforward project plan, good team collaboration, and commitment, enough funds and resources, doable deadlines, few errors, and effective mistake correction.

The main benefits of using project management principles in your daily work are:

• You can see what task you’re assigned and which resources you should use, including budget and available tools.
• By tracking your time, you can create timesheet reports, analyze them to find free time for additional tasks, establish the project’s next steps, or estimate deadlines for future projects.
• The monitoring stage of project management allows you to identify errors and mistakes whenever they occur through a detailed look at what all employees are doing and which resources they are using.
• Assign a team member to solve a problem using available resources within the time frame.
• Different team members can be assigned to a project or task and collaborate in real-time to complete it.
• Through project transparency, everyone in charge can see what the team is working on or contribute to the project’s development.
• Project management allows you to gather information, log data that was not predictable on the go, and use it to make the right data-based decisions.
• Let your client see everything going on with the project and suggest improvements whenever something is not going according to the project vision.

Project management might look complicated, but chances are you’ve already been involved in a process like this. So next time you plan your friend’s birthday, you work on a project and are the project manager.

If you’re interested in a project management career or just starting a new PM role, project management software can help you sort and manage your activities. One such tool is Paymo, which lets you manage a project from start to finish.

If you want to learn more about project management in a structured way, check out our complete project management guide.