Entrepreneur Insight

Supercharge Your Business with Project Management

Project management principles can increase efficiency for businesses of all sizes.

Before starting work on a big project, it’s always important to have a detailed plan of action in place. That’s true for everything from planning a wedding to mapping out a home improvement project.

And it’s especially important in the business world.

While not a new concept in the corporate world, project management as an academic discipline is mostly known for its application in the world of construction and general contractors. Now, a growing number of small businesses are buying into the concept of project management as a way to increase efficiency, build stronger ties with clients and set the table for winning future work assignments and contracts.

“Most Fortune 500 companies are already using project management because they know the benefit that comes from it,” said Larry Adeyemi, founder and president of Green Project Solutions Group LLC in Seattle. “Medium-sized and small businesses are also taking advantage of project management now. They’re tools and technology that deliver.”

Help to small businesses

Take as an example the area of community transit, said Lily Keeffe, a project director with the Small Business Transportation Resource Center in Everett, Wash. Keeffe’s group, which is affiliated with the U.S. Department of Transportation, helps local communities with developing public transit projects, by providing both technical assistance and financial help.

When Keeffe learned about an upcoming seminar on project management, hosted by East West Bank and sponsored by Economic Alliance Snohomish County in Everett, Wash., a light went off, she said.

“It inspired me, as a project director, that maybe I should take a more in-depth look at project management,” Keeffe said, adding that it could help inform not only how she approaches her own planning, but also how she advises her clients on planning.

“A lot of small businesses take on more projects that they can handle, just to try to survive,” Keeffe said. “Most of the time, they fail, because they don’t know how to manage all of these projects. But they need to have the mindset of project management, so they know exactly how to be more efficient and work smarter.”

Planning from start to finish

Project management is, in essence, the science of the management of how a project is planned and executed, from start to finish, Adeyemi said. It includes an initial phase of self-reflection, such as deciding what is the primary strength of your organization that sets it apart from its competitors.

Later, project management creates a system for eliminating waste and inefficiencies in the execution of a project. The end result is higher profits for your company, and greater satisfaction on the part of the client, Adeyemi said.

It’s true that many of the principles resemble the work process used by construction firms and general contractors, Adeyemi said. For example, project management suggests breaking up a project into various segments, in the same way that a construction firm might conduct a feasibility study first, followed by a basic design and engineering plan, then moving to the procurement phase before actually putting the first shovel in the ground.

But project management “can be used in any industry. It’s a well-tested methodology that has templates that can be tailored and tweaked,” he said.

Financing available

It is possible for a small business to obtain financing to assist in the implementation of a project management system, said Kimberly Rice, a relationship manager with East West Bank in the Seattle area. Proceeds from a credit line, or a loan guaranteed by the U.S. Small Business Administration, can be used for a variety of areas, such as hiring executives or buying software.

“We can look at it on a case-by-case basis,” Rice said. “The borrower can use the funds as they see fit.”

A number of studies have produced figures that bear out the argument that project management works and has become an essential ingredient for many managers. Organizations that use formal project, program and portfolio management techniques waste 13 times less money than organizations that don’t, according to the Project Management Institute, a Philadelphia trade association for professional project managers.

“Projects, even those identified as an organization’s strategic initiatives, are failing, which results in wasted money, resources and time,” said Mark Langley, chief executive of the Project Management Institute. “Organizations must take another look at project management as the strategic competency that drives success.”

A top priority

In another study, conducted by the consulting firm McKinsey & Co., about 60 percent of senior executives contacted in a survey said that building a strong project-management division in their companies was one of their top three priorities.

Companies that use project management as an official policy frequently hire an executive to be in charge of all project-management issues, Adeyemi said. This executive should report to either the chief financial officer or the chief executive officer, he said.

“The CEO or CFO will be very supportive of project management if this person can demonstrate that they can save money and beat their competitors out there,” Adeyemi said. “If the person reports directly to the CFO or CEO, the rest of the organization will begin to pay attention.”

Got questions? Attend the East West Bank workshop on project management in Seattle on August 25th.