Wednesday 16 February 2022

Application of the project approach in business


The decision-making process in an organization depends on many things and many things that affect the quality of such decisions.

If you look at the definition, then:

The decision-making process (PPR) is a cyclical sequence of actions of the subject of management aimed at solving the problems of the organization and consisting in analyzing the situation, generating alternatives, making a decision and organizing its implementation.

As a rule, to make a decision, you need information and it is provided by management accounting and I have already written about this more than once on the pages of this blog. But the decisions made are also influenced by the point of view on the company's activities, which more and more often should be considered as a project, and not as a permanent activity. But don't overdo it.

Let's define the project. If we recall the history of this word before that, then initially "project" meant a certain plan, and not the implementation of this plan. Since the 50s of the 20th century, this concept has expanded and a number of formulations have appeared, such as:

A project (in management) (English project from the Latin projectus - thrown forward, protruding, outstanding forward) is a temporary enterprise aimed at creating a unique product, service or result.

Other definitions of this concept from international standards:

Project - an undertaking with certain start and completion dates, undertaken to create a product or service (service) in accordance with specified resources and requirements;
A project is an enterprise (undertaking) with predetermined goals, scale and duration.
A project is a set of activities to develop a new product or improve an existing product.
With such definitions you will not go far too much they are formalized.

Antonio Nieto Rodriguez in his book "Purpose as a Project" (it was she who inspired to write this article and I will continue to take the main theses from it) gives the following definition of the project:

The project is a proven way to translate ideas into reality. It has a goal aimed at solving a problem or creating something new. It is unique in nature, even if you do something repeatedly, some details will be different. A project (very often) requires a team whose members have different skills and experience, and a leader who manages them. It has limitations related to time, budget and design. The project should take into account the peculiarities of the behavior of its participants.

How do projects differ from the operating system:

  • Projects involve one-time investments designed to achieve the set goals, while the objectives of operational activities practically do not change from year to year;
  • Projects are limited in time and budget and are implemented by temporary team members. Operational activities are easier to automate and are tied to the annual budget;
  • Projects and operations need personnel with different competencies.
  • What is project management?
  • One of the founders of project management is Henry Gantt, an associate of the "father of scientific management" Frederick Taylor. Gantt studied management by building ships during World War I and proposed his chart, consisting of segments (tasks) and points (final tasks or milestones), as a means to represent the duration and sequence of tasks in a project. This tool is probably known to everyone - the Gantt chart has long been part of the toolkit of any project manager.

The evolution of project management has given managers more and more tools: the program evaluation and analysis (PERT) method, the critical path method, etc.

Again, if you look at the definitions that are given in the literature, then little is clear, for example:

Project management is an activity to achieve the goals and objectives of the project.

The same Antonio Nieto Rodriguez gives this definition:

Project management – competencies, methods and tools that help people successfully identify, plan and implement projects.

But it is necessary to take into account the following points:

Project management is not a free pleasure and the cost of this process can reach from 7 to 15% of the total cost of the project.

The last trend is the increasing role of leadership and it becomes a higher priority than project management.

Not all activities are a project, it is necessary to clearly distinguish between the operating system and projects and should be guided here by a practical approach:

  • the size of the project in terms of budget (for example, over $ 10,000);
  • the size of the project in terms of duration (e.g. six months to two years);
  • the number of full-time participants involved;
  • the number of units (departments, etc.) over which the project has an impact;
  • the connection of the project with the strategic goal.

Project management does not stand still and is evolving. Originating in the 1970s and 1980s, it gained new techniques and ideas and this led to the publication in 1996 of PMBOK, which described project management processes in terms of integration between processes and interactions between them, as well as the purposes they serve.

In 2017, the sixth edition of this guide was released and it was quite large - 756 pages (924 together with annexes) and already included a description of the newfangled methodology - agile.

But it should be recognized that it is very difficult to read such a book, even for a trained specialist, what can we say about an ordinary person. It's like about the tax code - very interesting, but nothing is clear and you want to sleep after reading a few pages.

Project management model and its application
Let me try to simplify everything a little and look at the project from the point of view of an ordinary person who takes part in it.

So, here is a template that can be guided when conducting any project. It consists of 4 blocks (the approximate contribution to the success of the project is indicated in parentheses):

  • Why – justification of the feasibility of the project and the expected benefits, as well as the intention and passion necessary for the successful implementation of the project (20%);
  • Who are the participants responsible for accountability and management, who must provide the project with resources and guarantee the achievement of results (20%);
  • What, how and when – aspects of the project (content, timing, cost, quality, risk management, supply, motivation, skills, change management, communication) (50%);
  • Where is the organization, culture, priorities and context of the project (10%).

Principles of success of this model:

  • Before starting a project, you need to assess its need, determine the goal and connection with the overall strategy of the company – do we need it?
  • You can not do without an active and constantly involved curator of the project, if there is none - your project will be ownerless and useless to anyone and it is unlikely that it will end successfully;
  • The project is always changes that cause resistance and it must be taken into account from the very beginning of the project;
  • Project managers should be leaders – have a good understanding of the content of the project and control all actions and guide them for the successful completion of the project;
  • People are more important than processes and need to be motivated;
  • Unsuccessful projects are experience that should be applied in the following projects (avoid mistakes);
  • Risk management is an integral part of project management;
  • Flexibility is needed in project management;
  • Priorities need to be set;
  • Project performance indicators should be tied to results, not to investments in the project;
  • Project-oriented organizations tend to be more flexible than companies with a traditional hierarchical structure;

A project cannot last forever and must be completed even if not all tasks are completed.
And let's look at each block in more detail.

What for

Whatever methodology we take, they all require a clear business case. As a rule, such expectations are inflated to make the project look more attractive.

Caution should be exercised with respect to projected financial performance, especially with regard to expected benefits. In addition, consideration should be given to the feasibility of its implementation. Launching any project can be associated with one of two goals: to solve a problem or to use some opportunity.

The rationale should be clear and include at least one goal that complies with the SMART principles.

SMART is an abbreviation, the decoding of which: Specific, Measurable, Achievable, Relevant, Time bound. Each letter of the abbreviation SMART means a criterion for the effectiveness of the set goals.

Design and passion are also important elements of any project. The definition of design is a matter of clarity and consistency. The idea of the project will help to determine the following questions:

Why is the project important?

  • What opportunity will be lost if the project is not implemented;
  • For whom is the project most important?
  • Why would anyone waste time participating in a project?
  • Or you can ask yourself one question: "Why am I implementing it at all?", After finding out the reason, think about the timing of the completion of the project, how much it will cost and how many resources it will require.


This area relates to accountability and the division of responsibilities. It includes a project curator and a management structure.

The curator of the project should devote enough time to it and should not supervise several projects at once.

Curator of the project:

  • has an interest in the results of the project;
  • manages the budget;
  • holds a high enough position in the organization to make decisions affecting the budget;
  • is ready to devote at least one day a week to the project support;
  • is well versed in the technical issues of the project.
  • This role is well described in the HBR article "How to Be an Effective Executive Sponsor".

The management structure contains information about the roles of participants and key decision-makers.

To show who is doing what, you can use the Responsibility Sharing Matrix (RACI).

Often the concept of "responsibility distribution matrix" is reduced to simply "responsibility matrix", but this is not entirely true ideologically. Even in the original, the tool is called the Responsibility assignment matrix, that is, it emphasizes that its purpose is to assign or distribute responsibility.

RACI Transcript:

R (Responsible) is the one who will do the work. For example, module X will be written by the developer Vasya. For each task there should be at least one "R", you can have more.

A (Accountable) – the one who will accept the final work and will be responsible for it. To take module X from Vasya and answer to the project manager with his head for the fact that he will earn, will be his team leader Peter. "A" for each task should be only one, there can be no "A", as well as "R", in the task can not. In exceptional cases (usually for very small teams), "A" and "R" will be the same person, then it is enough to specify simply "A". But in general, this is not a good practice.

C (Consulted) – someone who will be required to advise others when performing a task. In order for module X to work as it should, both Vasya and Petya will need to coordinate their ideas for implementation with Inna, the head of information security in the company, and Elena, the architect of the project. The "C" in the task may or may not be.

I (Informed) is someone who should be aware of the decisions made or the progress of the task, but will not influence them in any way. The support manager Ivan, whom users have already stumbled in anticipation of module X, will be sad to read statuses and newsletters about the progress of the development of the module, watch the tusses in JIRA and sigh heavily. By analogy with "C", the "I" in the problem may or may not be.

What, when and how

This area covers the main elements of the project and can be divided into technical and people-related. These areas are the responsibility of the project manager.


The content of the project is an important point and determines what it includes and what results it should bring. That's probably the biggest challenge. Very rarely is the initially defined content not modified with the course of the project. The more the content changes, the more difficult it is to decide the project successfully.

In the 1980s, Cap Gemini created the BOSCARD model, which is designed to determine the content of a project and consists of 7 questions:

  • What are the conditions in which the project is implemented (Background)?
  • What are the main objectives of the project (Objectives)?
  • What will be done as a result of the project (Scope)?
  • What are the main constraints that prevent the successful implementation of the project (Constraints)?
  • What assumptions were made?
  • What risks can lead to the failure of the project (Risks)?
  • What are the desired deliverables?
  • It's time

Time is one of the main characteristics of a project and it is usually rare for a project to end in a predetermined time frame. But there has to be a deadline. And it can be defined using a top-down and bottom-up planning tool. That is, first we determine the optimal time to complete the project, then we break the project into works and compare whether the deadlines coincide. If the deadline is unrealistic, think about how you can shorten the duration of the project. Alternatively, you can reduce the content of the project or increase the budget.


Well, how can you do without some kind of budget. Without a budget, you won't succeed.

Project budgeting is the determination of the cost of the project as a whole and the work performed during its implementation, as well as the process of forming the project budget, which contains the approved distribution of costs by:

  • items of expenditure,
  • process execution time,
  • types of work,
  • cost centers, etc.
  • But at the same time, even if you have an unlimited budget, this does not mean that the project will end successfully.

To calculate the budget, you can use the same top-down and bottom-up planning tool. And in the budget it is desirable to throw 10-20% on top.


The quality of the project is often overlooked. Teams focus on functionality and postpone the issue of quality to the very end of the project, when making adjustments is the most expensive.

Lack of quality can lead to the cancellation of the project.

Both Quality Assurance (QA) and Quality Control (QC) are required for a project to succeed.

Risk management

The cause of the risks is the uncertainties that exist in each project. Risks can be "known" – those that are identified, assessed, for which planning is possible. Risks "unknown" are those that are not identified and cannot be predicted. Although the specific risks and conditions for their occurrence are not defined, project managers know from past experience that most risks can be foreseen.

Risk management is the process involved in identifying, analyzing risks, and making decisions that involve maximizing the positive and minimizing the negative consequences of the occurrence of risk events.

The project risk management process typically involves performing the following procedures:

  • Risk management planning – selection of approaches and planning of project risk management activities.
  • Risk Identification – Identify risks that could affect a project and document their characteristics.
  • Qualitative risk assessment is a qualitative analysis of risks and the conditions for their occurrence in order to determine their impact on the success of the project.
  • Quantification is a quantitative analysis of the probability of occurrence and impact of the consequences of risks on the project.
  • Risk response planning – identify procedures and methods to mitigate the negative effects of risk events and take advantage of possible benefits.
  • Risk monitoring and control – risk monitoring, identification of remaining risks, implementation of the project risk management plan and assessment of the effectiveness of actions to minimize risks.
  • A risk matrix can be used to assess risks


When executing projects, it is rare that you can do without external resources. The procurement of goods and services from external suppliers can affect the implementation of the entire project and the question of the timeliness of such deliveries can be critical.

The number of subcontractors should be determined by the specific competencies required for the implementation of the project.


To implement projects, you need people, and those who have the necessary skills and competencies. If you don't have a note, it's pointless to launch a project.

This issue can be partially solved with the help of training, in addition, it is possible to attract personnel from the outside.

But the availability of personnel is not enough, it is necessary that he is still interested in the project. Such interest does not arise by itself and it must be instilled.

Often, project managers sin and ask for a lot of reports, the preparation of which can take a lot of time. To assess the state of the project, it is not necessary to make reports, you can ask the project manager two questions: "how much time do you devote to the project" and "How interested are you in the project?".


Stakeholders are individuals and groups of people involved in a project for whom the results of the project are important, or on whom the project has an impact.

A stakeholder analysis matrix can be used to identify stakeholders and determine their impact on the project.

Where is
This area covers the external aspects of the project that have an impact on it.

Project-oriented organization

Most companies have a hierachical, functional structure that is ideal for running current activities.

However, if we are talking about a large or important project, then it usually covers the organization as a whole and the line between departments is blurred.

In this case, it is necessary to create a corporate project management office.

A project office is a temporary structure created in a company to perform specific functions related to the development and implementation of a new idea, most often an investment project. It includes the necessary specialists (managers and technical personnel), provide the required technical and software tools.

You can read more about the project management office on Wikipedia.

How to Become a Project-Centric Organization

This path is not easy and consists of 7 steps:

  • Develop a standard set of terms and definitions related to project activities;
  • Develop general guidance for projects based on the project template;
  • Develop training for project curators;
  • Develop training for project leaders;
  • Choose the most qualified and enthusiastic people who will become representatives of projects;
  • Entrust them with the most relevant and/or strategic projects;
  • Apply constant conditions to make the organization project-oriented.

Golden rules for evaluating the capabilities of the project:

  • Abandon ideas that are not yet ripe for launch;
  • Senior executives must devote at least 20% to the project they oversee;
  • Projects should have a clear goal that complies with smart principles, with a clear deadline;
  • To implement the best projects, you need to allocate the best employees and they need to allocate enough time to work on the project;

It is necessary to constantly remember the quality of the final product or solution.

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