Chapter 1. Introduction to Project Management
1.2 Project Characteristics
PMBOK Guide 6th and 7th Editions define a project as a temporary endeavor undertaken to create a unique product, service, or result. The starting point in discussing how projects should be properly managed involves evaluating how we identify a project and understanding how we differentiate it from daily operations, and hence, clearly outline which tasks cannot be defined as a project. Therefore, distinguishing between a project and a process (or an operation that is a routine task repeated regularly) is highly important.
A project has two primary attributes that distinguish it from ongoing and routine work, which are business operations. They can be listed as below:
- Projects and their outcomes are unique.
- Projects are temporary, that is, they have a definite beginning and ending date.
Projects are completed when the project goals are achieved or it’s determined that the project is no longer viable. Eventually, a successful project meets or exceeds the expectations of the stakeholders.
In the following subsections, let us discuss these two distinctive characteristics.
1.2.1 Unique outcome
Projects produce unique products, services, or results. Projects exist to bring about a product, service, process, or outcome that hasn’t existed or been used before by the implementing organization or beneficiaries. While some projects are based on previous projects that were carried out in a similar fashion, each project is unique and begins with a business case and project charter. Constructing a replica of a building should also be considered a project, although the same architectural blueprints are used. Although containing repetitive elements, this new construction work requires conceptualization and planning. A project manager is assigned to that project, who creates, develops, and manages a new project team and prepares detailed planning for the project constraints such as scope, schedule, budget, resources, risks, and quality. That building may be constructed in the same area (even next to the existing building) or in another city, state, or country. Naturally, construction at other locations could necessitate substantial customization (tailoring), considering the internal influencers as well as external influencers such as weather, legislative regulations, and supply chain factors in new locations.
Projects can involve developing and producing a new deliverable. Besides, in many cases, they may address improving and modifying an existing deliverable. Examples of projects can be listed below:
- Modification of an ERP (Enterprise Resource Planning) system by revising the current modules and adding new modules,
- Installing new safety features to a vehicle (e.g., new airbags, traction systems, accident prevention systems),
- Remodeling a building or a parking lot,
- Renovating the power lines all across a city or state,
- Reorganizing the workflow in a workplace such as a restaurant, grocery market, local motor vehicles bureau, and library,
- Creating a designated area for self-checkout kiosks in markets,
- Creating a new TV, YouTube, or social media advertisement for a hand sanitizer.
Each project requires a unique approach based on the objectives to be achieved, the complexity and/or the size of the work required, the number, interests, and powers of stakeholders involved, and the clarity of the solutions being pursued. Those skilled in the art and science of project management can tailor the use of tools, techniques, and processes to maximize the value delivered to and by the organizations.
When the project deliverables are inspected and accepted by the client (i.e., customer or product owner), and the project is closed, the project manager can hand over the deliverables to the operational units, which are at the organization of internal or external clients. For example, if the project’s objective was to create a new payroll information system in an organization, the system is delivered to the IT department and/or the payroll department of the organization. From there, these functional departments can utilize and maintain the system. The payroll department can pay the employees’ monthly salaries based on the inputs entered into the system. Paying salaries to these employees regularly becomes an operation (a routine task). Thus, the organization can benefit from the new system since payrolls are computed properly with minimum acceptable errors and by avoiding human errors. However, whenever there is a new need to modify the system or purchase a new one, this should be treated as a new project, which will require establishing a new project team and assigning a project manager. Therefore, this leads us to the second characteristic of a project, which is its temporary nature.
1.2.2 Temporary Nature
The second characteristic distinguishing a project from an ongoing work is its temporary nature. Projects are not an everyday business process and have a definite beginning date and an end date. A project is assigned a schedule with a certain completion date because the ultimate objective of a project is to benefit from its deliverables. Therefore, a significant portion of the project effort is dedicated to completing the project at the appointed time. To do this, schedules indicate explicitly when tasks should begin and end. Activity network diagrams and Gantt charts help determine, visualize, and monitor the schedule of the whole project and the interdependence among project activities. Projects can last minutes, hours, days, weeks, months, or years.
In contrast with projects, operations are ongoing and repetitive. They involve continuous work without an ending date wherein the same processes are repeated to produce the same results. The purpose of operations is to keep the organization functioning, while the purpose of a project is to meet its strategic goals and create a change in the organization to acquire new or additional tangible or intangible benefits that cannot be acquired by conducting daily operations. Projects aim to move an organization from a current state to a desired state in the future, where the organization can find the opportunity to move forward and improve its financial and market conditions.
To illustrate this, consider a hypothetical automaker that operates on a global scale. Designing a new SUV and its components based on a strategic objective, creating prototypes, and conducting crash and safety tests require a systematic project management approach. After delivering the final product, this SUV can be placed on the assembly line in a factory. Whenever all the parts are assembled in this manufacturing facility by workers, robotic arms, and machinery, and hundreds of vehicles are manufactured on a daily, weekly, or monthly basis, this process becomes an operation. Ordering raw materials and vehicle parts to create many vehicles in the factory constitutes the operational process which also consists of the transactions occurring along the supply chain on an ongoing basis. As long as consumers demand this vehicle model and it is profitable for the company to manufacture and sell it, the company can continue manufacturing it. All these repetitive and routine manufacturing processes can be considered an operation. However, when there is a need to change some vehicle features (e.g., adding new airbags or modifying some engine components), the company would need to start a new project.
A project is completed when its goals are accomplished and its deliverables are approved by the client. Sometimes projects end when it is determined that the goals and objectives cannot be accomplished or when the project outcome is no longer needed. Serious schedule delays or a need to increase the budget substantially might cause the project sponsor to consider cancellation. Some reasons to terminate the projects earlier than their scheduled completion time can be listed as follows:
- Funding is exhausted or no longer available,
- Resources (human resources, physical resources, or services) are no longer available,
- The external client (funder) or the current or potential customers no longer want the project completed,
- The organization changed its strategy or determined a new priority,
- Management decided to end the project, and
- A legal cause or a new regulation necessitated the project to end.
Terminating a project before completion is uncommon without achieving its goals and carrying out all the activities. Nevertheless, these unsuccessful projects are still considered as projects.
1.2.3 Two Examples of Evaluating a Project’s Uniqueness and Temporary Nature
The uniqueness of a project and its temporary nature would help a business or organization to assess if it has a project, and hence, would need to implement a systematic project management approach and form a project team.
Characteristics of the “Self-Checkout Stations Project” Undertaken by Grocery LLC
Our organization is a grocery chain (Grocery LLC) with fifty branches across five states. During the weekends, and between 4 pm and 7 pm during the week, these branches, in general, experience more than usual traffic of customers. Therefore, long lines form in front of the current check-out stations where the cashiers work. Sometimes, it is impossible to assign an adequate number of cashiers to all the existing stations because of the lack of personnel. Grocery LLC’s chief operations officer (COO) visited the CEO’s office several times to discuss potential solutions to this problem. With the help of her operations team, she prepared a business case with several solutions. During the preparation of the business case, to elicit the business, stakeholder, and solution requirements of these solutions, the team sent paper and e-mail surveys to all the branches to understand managers’ and employees’ expectations and interviewed ten managers, ten supervisors, and thirty employees who volunteered for follow-up and further examination.
Furthermore, two hundred customers who volunteered and were given a $20 gift card to spend at the grocery market were interviewed when they visited these branches to shop during busy hours. The team also visited other grocery chains’ markets, which are the main competitors of Grocery LLC, to observe their daily operations. The team also collaborated with a market research consultancy company for further analysis and to receive expert judgment. Among several options, the candidate solution with the highest priority was identified as establishing self-checkout areas in all the branches. This solution was discussed in the project selection committee meeting, in which our organization’s CFO, CTO, and senior representatives from three departments (R&D, procurement, and human resources) were the members. Based on pre-determined criteria and the weights that our organization uses for all the projects (see Chapter 2, Table 2.5), this solution was selected to proceed with as a project. The committee decided to organize the project as a program and to assign 5 project managers who are responsible for ten branches each. Grocery LLC wanted to start the project in January 2022 and finish all the work by August 2022. Once self-checkout areas are built and inspected to verify if they can be utilized to the full capacity with all the requirements met, customers will be able to check out their items themselves without the presence of cashiers, and, hence they can avoid crowded lines.
Based on this example, we should ask first if this can be considered a project. Projects are temporary and, hence, have a definite start date and an end date. They result in the creation of a unique product, service, process, or outcome and are completed when their goals and objectives have been met (or the objectives cannot be met, and accordingly, they are terminated early) and finally signed off by the project sponsor and the clients (funder).
Using these criteria, let’s examine if the establishment of self-checkout areas in all branches is a project:
- Is it unique?
- Yes, because the self-checkout kiosks don’t exist in this grocery chain. The outcome of this project is a new way of service to customers, which would increase the speed of checkouts and reduce the lines at traditional checkout stations. The main purpose of this project is to provide faster service to the customers during busy hours. For each branch, a new design and implementation can be required due to the different layouts and sizes, and according to varying demands of the local customers. Therefore, it is also a unique endeavor for each branch.
- Is this a temporary endeavor? Is there a way to determine when the project is completed?
- Yes, the project starts in January 2022 and ends in August 2022. When the kiosks are installed, and the self-checkout service is offered to the customers at each branch, we can close the project and disband the project teams. Then, this will become an operation that is carried out every day.
Besides these two characteristics, we should also ask another question related to a project’s constraints.
- Is there a way to determine stakeholder satisfaction?
- Yes, the stakeholders’ expectations will be documented as requirements while preparing a needs assessment, business case, and a benefits realization plan before the project starts and during the initiation and planning processes. These requirements will be compared to the finished product to determine if the self-checkout stations could satisfy stakeholders’ expectations, primarily market employees and customers.
Characteristics of “M-Commerce Project” Undertaken by Grocery LLC
Physical sales have declined worldwide since the onset of the COVID-19 pandemic. Customers prefer buying online instead of visiting a store in person since they are concerned about contracting COVID-19. Our fifty stores in five states lost around 30% of regular customers, and the revenue declined by 25% since the start of the pandemic restrictions in March 2020. Considering the pessimistic trends forecasted regarding the pandemic and the increasing digitalization of companies and consumers, the project selection committee decided to have a better online presence by creating a mobile app and optimizing the website for mobile devices. Therefore, our current customers who purchase goods and services from our grocery stores, as well as potential customers, will have the opportunity to purchase through their computers and smartphones. So, our team was asked to elicit the requirements by communicating with the key stakeholders, such as grocery managers, employees, and customers. It was planned to start this project on May 2, 2022, and finish on October 27, 2022.
Let’s evaluate this project in terms of uniqueness and temporary nature.
- Is it unique?
Yes, because the grocery chain diversifies its sales channels by strengthening its online presence by optimizing its website for mobile devices and creating a new mobile application. The outcome of this project is that it offers a new way of service to customers.
- Is this a temporary endeavor? Is there a way to determine when the project is completed?
Yes, the project starts on May 2, 2022, and finishes on October 27, 2022. When the mobile app is ready for the customers to install on their smartphones and customers can view the website on their mobile devices, we can perform administrative and financial tasks to close the project, and we can disband the project team. Then, this becomes a routine task for the operational units to maintain and support the website and mobile app.
- Is there a way to determine stakeholder satisfaction?
Yes, the stakeholders’ expectations will be documented as requirements while preparing a business case and during the initiation and planning processes. The requirements for a mobile app and optimized mobile website will be compared to the finished products to determine if they satisfy stakeholders’ expectations.
