Our aim is to understand the relationship between project management and organizational performance and Project management contributions towards the company performance. Every organization is under pressure to amend its performance to achieve sustained prosperity in today’s ecumenical emporium. It signifies being responsive to circumstances change.
By the final of the 1950s and in the first 1960s, experienced initiatives were made notably to grasp the success of organizations (Boyne). A few words are being utilized nearly as equivalent words to authoritative execution – for instance, effectiveness, last outcome, profitability, productivity, well-being, achievement, satisfaction, and hierarchical quality (Savior and Morin). The thought of organizational performance has been adopted in this research since it is suitable for the construction of company job management.
Trying to provide an interpretation of company performance is not really an easy job. Efforts made to elucidate it by explanation have not added to a satisfactory effect. Company performance has been approached in the books using different collections of characteristics or factors. It is observed that over the past 30 years project management is an efficient implementation to take care of essential activities. Project management is preferable to customary ways of management, like the practice of efficient categories in a formal hierarchical company, for managing such situations (Avots, I. 1969). Also, reality has exhibited that it’s feasible to attain a prosperous job even though management is unsuccessful and the other way around (Wit). You’ll find so many cases of duties that have been generally fruitful regardless of not being done promptly or being above the spending plan.
Why project Management is important in performance of a company
Searching for an approach to remain in front of the pack in the present focused worldwide economy, organizations are swinging to project management to reliably convey business comes about. A completely adjusted project, program, and portfolio management system envelops the whole association, directing project execution at each level and planning to convey an incentive at each progression end route. What’s more, more organizations are unmistakably observing the result from contributing time, cash and assets to fabricate authoritative project management aptitude: bring down costs, more noteworthy efficiencies, enhanced client and partner fulfillment, and more noteworthy upper hand. The financial downturn just uplifted that esteem.
An Economist Intelligence report demonstrated that 80 percent of worldwide administrators thought to have project management as a center competency helped them stay focused amid the subsidence. I and even as come officials see the flashes of a delicate recuperation, there is little uncertainty that a solid association wide sense of duty regarding project management prompts better outcomes and long-haul business esteem. “The conveyance of business results is acknowledged through the achievement of projects, and basically that is the way that project management techniques drive authoritative achievement,” says Adrian McKnight, PMP, program chief at Suncorp-Met Way Ltd., a money-related administrations firm in Brisbane, Queensland, Australia.
An overview by counseling mammoth McKinsey and Co. discovered that almost 60 percent of senior administrators said building a solid project management train is a best three needs for their organizations as they look to what’s to come.
Advantages of an organization which follow project management
Project management is an approach used by some of the organizations to achieve the success in the projects there by to get a good reputation in the market. There are many advantages for an organization if they have project plan which in turn helps the company’s performance. Some of the advantages are as follows.
Clarity of project requirements, project scope.
Before starting the project, we should have some clear picture of the overall project scope and requirements and we must ensure those requirements can be achieved or not. Requirement Challenges can be identified before the project design/development which is always better than to identify them in later stages.
Project scope is to make a detailed report on the project and the services provided by it, which contains the goals of the project, acceptance criteria, resources, project base, timelines to execute each task, project constraints and deadlines of each task in detail. Dividing the work into breakdowns will make the project easy to execute than it to work on a large component.
(Ramos Freire, E.M., Rocha Batista, R. c., & Martinez, M. R. 2016)
Better efficiency in delivering services.
Project management provides clear route to complete the project successfully without any obstacles which is used by all the managers, technical leads. As everything is already planned in the project it goes smoothly and the delivery of the tasks will have done in timely manner and customer will be satisfied with the output. Efficiency of the project is increased because the proper project management which involves requirements gathering, project planning is followed perfectly. So, we will not have any issues which decreases the performance and delays in delivery of the services. (D. Smith, M. Eastcroft, N. Mahmood, & H. Rode, 2006).
Better project Managers.
If an organization follows project management techniques, then the managers in the organization will follow them and learn how to really manage the project. And it helps the organization because as it makes the project managers more efficient and productive in their work and they will be able to communicate with the peers effectively. When they communicate with the peers, if there are any issues that can be resolved faster and make progress in the project without any delays in the delivery dates. (Ramos Freire, E.M., Rocha Batista, R. c., & Martinez, M. R. 2016)
Work breakdown Structure.
(According to the authors Ramos Freire, E.M., Rocha Batista, R. c., & Martinez, M. R. 2016)
Work breakdown structure plays one of the crucial roles in project management. When we know the requirements, project manager should identify the requirements which are possible and should breakdown the structure in to parts so that each peer will have an opportunity to work on it. For example, when we consider a big project/task it is not possible for a single person to complete it efficiently, with good quality and within specified time. So, when we divide the same task among certain members in a team it will easily completed and when we integrate that it will be a big success which overall helps in an Organizational growth. Work breakdown also involves:
Scheduling.
Before starting the project based on the resources availability and average resource development capacity the project is divided in to bits and pieces and specific estimated date is attached to each task. This helps the management team to estimate the project delivery date and estimated time frame which includes all the critical gaps and requirements in any project before its development phase. (Ramos Freire, E.M., Rocha Batista, R. c., & Martinez, M. R., 2016)
Budgeting.
Budgeting is the main aspect in any project which is going in to the development phase. Budgeting factors includes Resource coverage, Work environments, Licenses and it also involves direct and indirect costs of the project so that it becomes easier to calculate the overall profit of the project. Some organizations can make a mistake while estimating the project budget which is the ultimate failure of the project in an organization, so we should keep every cost which involves in the project. (Ramos Freire, E.M., Rocha Batista, R. c., & Martinez, M. R., 2016)
Human Resource Planning.
Here we decide which work is done by whom and we share the responsibilities of a work. And if there are any dependencies associated to our work we will plan accordingly. We establish roles to every person in the team and we decide hierarchical relationships (Ramos Freire, E.M., Rocha Batista, R.c., & Martinez, M. R. (2016))
Organizational Effectiveness and Quality Control
The Effectiveness is as important as such as the goals of an organization. Many leaders in an organization proposed many frameworks to achieve the effectiveness which the sponsor/client expects from an Organization. Effectiveness of an Organization is determined by calculating by either subunit or each individual employee performance. When we calculate as a subunit, individual and as well as our contribution to the team is also calculated.
In this way, Organization can calculate the overall effectiveness of a company and if there are any changes to be done it follows to achieve 100 percent effectiveness.
In my view, using project management it becomes easier to calculate the overall effectiveness of an Organization because as each project is scheduled, and we have dates of completion of each task we can know the performance or effectiveness of an individual by viewing the project scheduling. We should ensure that the task or project met the quality standards which are in Quality process planning. The aims which are mentioned in the scope of the project and the deadlines of every task should be evaluated whether they are meeting the scheduling dates or not. (Morrison, J., & Brown, C., 2004).
Why PMO is important and role of PMO in achieving company success
The PMO plays an important role in the communication between the project management and overall success of the company. To establish a relation between the two, a PMO has to effectively transfer the knowledge gained among other project managers. This will help in achieving their goals and succeed. We will be discussing more about how the PMO can help build the relationship among project management and company. It evaluates both the current and relevant aspects of both structuring and implementing various kinds of PMOs at different level of the organization.
The PMO has a lot of responsibilities to develop and maintain the organization standards so that the project managers can apply these standards in their projects and management practices.
Responsibilities of PMO
The most important responsibility of the PMO is create a knowledge repository and maintain it. Not only create or maintain, but a PMO should be able to transfer the knowledge among other project managers and executives in an efficient and effective manner. This will help us building the relationship between PM and organization success and lead to achieving their ultimate goals.
As one Thang Le Dinh said that Playing a central role in organizations, PMOs need efficient knowledge management (Aubry et al., 2010; Ismail et al., 2009). This means PMOs plays a vital role in the organization and need to know how to effectively manage the information they receive and convert it into knowledge. The effective knowledge management also helps in reducing the risks and eventually lead to success of an organization.
When there is too to do or achieve goals in short term, the project managers might get flustered and fail to deliver. Using the efficient use of project management and knowledge management, they can reduce rework and focus more on other priorities like project planning and monitoring, controlling etc.
Main roles of PMO
Again, Thang Le Dinh mentions so precisely and in an easy manner that, “A PMO may have one or more of the four following roles in an organization: consulting, knowledge managing, standard establishing, and implementation directing” (Desouza &Evaristo, 2006; Letavec, 2006). If we see, all these roles eventually lead to success of an organization. Let’s discuss more about a few of the roles which PMO has:
Out of the four roles the most intriguing one is the strategic planning. This is because, with proper strategic planning every organization can make better decisions, delegate the work in an efficient manner and build a secure and successful future for the organization. All these strategic planning mostly occurs at high level of management. So, as a PMO, it should be able to provide them with accurate information, help in strategic planning, controlling budgets and reporting as well.
The next role of PMO is to provide easy and efficient tools, templates, and reporting. Without easy access to these and not knowing how to make efficient use of these tools and techniques, the organization would fail to succeed in the projects. They cannot deliver on time and would result in not maintaining good relations with the customer. In this fast pace life where every project needs to be delivered faster better and cheaper, reducing the uncertainties and helping in delivering the projects in a timely manner.
Each project manager should follow a standard format and guidelines to execute a project. PMO provides a standardization and proper laid out guidelines to follow, so that all the project managers are on the same page and delivering the projects in a standardized manner.
Communication management: Here, the PMO conducts the project review meetings which consists of usually, the project managers and team members, to track the progress of the project so far. Also, the PMO maintains the relations with other stake holders like external or internal. The PMO also broadcasts information like notices, official project plan, documentation, first stage project plan, and tries to maintain and centralized communication wherever possible.
Challenges in PMO.
Though there are numerous benefits of having a PMO, there will always be some challenges to overcome at each level of hierarchy. Below the management level, the PMO can help the operation managers to delegate resources, plan and execute the project. however, above the operational level, where projects are managed, in the strategic level, we can see difficulties in strategic processes. There is no strategic planning, also we can see a lack of strategic objectives and incompetence in clear defined action plans for short- and long-term goals.
In a few projects which are huge and long-term prospects, it requires the involvement of many different departments of the organization, which demands effective communication and coordination.
As the marketplace is uncertain and dynamic, there are many projects which might need a timely week by week or bi weekly information system, but as their managers aren’t aware or informed about data, they can’t collect it and this makes it impossible for reporting and decision making processes. Many organizations face a lot of challenges in prioritizing the resources, work, budget according to the demanding needs of the market. Here, comes the PMO implementation which provide with a standard procedural method. It provides, training, orientation to support the Project Management processes in the company.
In the higher levels of management, the PMO provides proper support to group, think, make effective decisions. Analyze the situations and efficiently transfer the knowledge to several other levels of the organization.
Benefits of using PMO to achieve success.
If there is an organization which has a lot of projects in the pipeline, there are higher chances of the managers to get frazzled and lose track of their progress in the projects. Also, how we will measure the quality of the product or the deliverables is a question to think about. Here comes the concept of monitoring, audits and feedback. The PMO provides support for the PM processes by giving the feedback for a process, resource, a module etc which assess its quality.
The PMO helps gathering the feedback from the project team and medium level management and transfer it to high level management, thus keeping every department/level well informed about the track and progress of the project.
PMO establishes a relation between the vision of the project management with the vision of the organization management. This combined vision results in effective strategic planning and achieving organization success.
PMO helps in reducing overall costs, managing resources, budget, improving the communication, applying the best practices in tools and techniques.
It helps in providing efficient way of delivering the documentation with the use of diagrams, flow charts, templates, checklists etc which in turn helps in decision making.
Future aspects of PMO.
There are some intriguing updates in the fifth edition of the PMBOK guide which will embark to many new prospects of PMO. We discussed about how PMO manages the stakeholders earlier. According to the fifth edition, a tenth Knowledge Area, “Project Stakeholder Management,” has been created. This increases the focus on identifying and engaging stakeholders (Plante, Louis La, 2013), which will further help in developing public relations with stakeholders globally.
There are additional four planning processes that have been added to the knowledge area to reinforce the planning process more effectively and efficiently.
Implementation of PM methodologies in the success of a company
Project management is one of the oldest and most respected accomplishments of the humankind. This is evident by the success of builders of the ancient pyramids of Egypt, craftsmen of the great wall of China, the architects of the ancient cities among other wonders of the world. A project makes up more than fifty percent of the work and as a result, deemed the success vehicle for most of the companies. A project becomes successful when the stakeholders express their mutual satisfaction according to a set of pre-defined objectives of the project.
A study by Rozenes (2011), found that the conventional approach to project management did not offer enough conditions for the project success. This was perhaps caused by the increased complexity of the projects, environment shocks, advancement in information technology and widely dispersed project participants. To absorb these challenges, projects managers devised a system of principles, frameworks, processes, and standards for managing a project known as project management methodologies.
Project management methodology (PMM) consists of guidelines, tools, techniques, processes required to deliver successful projects. It establishes a common ground for all projects within the organization. Selecting the right project management methodology is vital since it defines either the success or the failure of the project (Kerzner & Kerzner, 2017). When deciding on the best PMM’s to use in a project, it is important to consider the complexity or simplicity of the project, risks, constraints and prior experience of using PMM’s. Environmental factors also impact the effectiveness of PMM’s. Some of the environmental factors include stakeholders, organization culture, commitment and support from the management and pressure to reduce costs. There exist different methodologies which depend on the type of project under consideration. Some PPM’s define principles like Agile while others define processes like Scrum and Six Sigma (Nicholas & Steyn, 2017). Discussed below are some of the project management methodologies.
Agile is not a PMM’s as such but a set of principles designed for projects such as software development. Projects in agile are consists of a series of activities conceived, executed and adapted according to the demands rather than a pre-planned process. The difference between Agile and other methodologies is that other methodologies assume that factors impacting the project are predictable while Agile focuses on adaptability to changing environments. Agile methodologies are used in dynamic environments such as software developments (Pećanac, et al., 2014).
Scrum is a framework that proposes a set of principles to improve the delivery of an ongoing complex project. Scrum emphasizes small, cross-functional teams made up of up to nine people who work on items that have been pre-defined. It is only applicable to a team dedicated entirely to the project. Waterfall methodology is the simplest methodology used by project managers to plan a project. Activities flow down just like a waterfall in the sequential order. The project team must finish one step before proceeding to the next level. Waterfall system is used mostly in the construction and software development industries (Rozenes, 2011).
Critical path method is one of the oldest project management methodology. It was established over half a century ago to highlight the challenges faced by teams when they failed to begin tasks before completing others. Project managers make a string of activities that depend on each other to form the critical path. Project managers concentrate on the essential tasks on the critical path which prevents frustrating bottlenecks and delays. Six Sigma is a data-driven project management methodology that uses proven tools and techniques aimed at helping businesses implementing process improvements. It main objective is to eliminate waste, reduce defects while lowering production costs thus improving customer satisfaction (Wells, 2012).
Regardless of skills or experience, budget discrepancy is a common occurrence in project management. While is not possible to eliminate it entirely, identifying it early helps reduce the impact and its occurrence on the future projects. Project management methodologies assists project managers in reducing and controlling projects costs using the following methods. First, they ensure the entire scope of the project is captured in the work breakdown structure statements. Second, they identify, determine and list the cost categories to be used in the organization. Lastly, they monitor project costs in real time to ensure they stay aligned with the project budget (Rozenes, 2011). Cost control is vital to the success of a project and ultimate success of the company.
Nearly all projects come with mounds of paperwork and endless meetings. The paperwork may result into human errors which would affect the project implementation process immensely. The paperwork also robs the project team its invaluable time which would have been used to perform other tasks. With project management methodology, the project manager does not have to use “go around the room” staff meeting to establish how everyone is doing. Instead he receives the data on project deliverables and progress reports from team members on weekly basis which helps in monitoring the progress of project implementation (Wells, 2012).
Project management methodology such as project management institute have developed best practices used in project management. Different organizations define best practices differently; some define best practices as a consistent way of doing things while others view it as simply the way project management uses the same templates. Best practices allow an organization to align its project with its strategic goals. It also ensures there is effective management of project resources. Best practices assist the organization to make the right decisions on the type of projects to be pursued at any given moment (Pećanac, et al., 2014).
PMM’s assists the organization to eliminate duplication of efforts. The project is first broken down into different manageable tasks. Since the tasks are clearly defined, the possibility of team members working on the same task is reduced to zero. Accidental duplication of tasks wastes a significant amount of money and time which are vital to the success of the project and the company at large (Nicholas & Steyn, 2017). Project management methodology gets rid of duplicating tasks by having tasks specifically outline and assigned.
Guidance on risk management is an important aspect of project management since different stakeholders have a different tolerance for risks. A client tolerance for risk could be much greater than the company’s risk tolerance. Also, according to the project’s requirements, a project could accept more or less risk than what is typically allowed by the organization procedures. Project management methodology creates an understanding of the potential risks. It also raises an early warning when the risk is imminent and offers guidance on how to deal with the risk event (Kerzner & Kerzner, 2017). The risk guidance provided by PMM’s helps the organization in predicting project risks which improve the success of the company.
Project management methodology such as Agile, Scrum and Six Sigma provides a framework for stakeholder’s analysis. By performing an analysis, the project manager and team members can clearly define the needs of the stakeholders, be it investors, customers, and the company’s management. While some stakeholders want to know everything about the project, others want less information to avoid surprises. PMM’s offers excellent communication features by ensuring there is a common language between team members, project managers, and the management. With PMM, there are improved customer relations during project execution which in one way or the other contributes to the success of the company.
A project is made up of teams, from the project sponsor, manager to team members. Finding the right people for the job, managing their output and keeping them on the schedule is an essential role of project management. A project is made up of two types of team members, functional and process team. The functional team concentrates on the technical part of the project they include engineering manager or software development manager while process team focuses on process parts such as estimating, planning and scheduling. It is the role of the project manager to equip his team with the relevant skills and expertise required to handle the project (Nicholas & Steyn, 2017). PMM’s provides guidelines on how to staff the project with the right skills, at the right place and at the right time. With the right time, everything else falls in its place thus achieving the project objectives which results in the success of the company.
Project management methodologies play an essential role in the success of companies. However, there are various success factors associated with project methodologies that need to be considered before selecting and implementing a PMM. The maximum value of project management methodology is realized when PMM’s supports the project managers of the organization to make the right decisions promptly using an efficient and effective combination of processes, techniques, tools and knowledge areas that give the highest likelihood of project success.
Project Management and Measurable Results
Actualizing project management over the association makes a vital esteem chain that gives organizations an edge on their competitor’s, especially in high-chance areas and markets.
Having the capacity to convey projects on time and inside spending plan regularly decides if an organization will land the following position or whether its new item hits the market. 90% of worldwide senior officials positioned project management strategies as either basic or to some degree critical to their capacity to convey fruitful projects and stay focused, as per the Economist Intelligence Unit review. (Babbie, E. 1989)
A solid project management teach conveys remarkable incentive to the business, since when there is an interest for an item, we are the ones who convey it, says David Buisson, PMP, program supervisor at Headland Project Management Ltd., which is as of now dealing with the Terminal 3 redevelopment project for BAA Airports at Heathrow Airport in London, England. “We are a key piece of the business, and we stick to similar tenets, meticulousness and business objectives as whatever is left of the association. (Babbie, E. 1989)
Conclusion
The aim of this study is to understand the relationship between an organization and project management. The results produced by an organization which follow project management are satisfactory and we can clearly see the results in the market. Organizational performance can be examined in many ways like success percentage of the projects in the market, how the project is managed. Project management is the approach which we use to achieve performance of an organization.
We explained how the project management process is, advantages of project management in organization, Analysis is done in real time environment, Success factors which are responsible for calculating performance and hoe team performance is developed when using project management.
Here by we conclude the performance of an organization improves depends on project management.