Project Management Basics: Everything You Need to Know

Updated October 31, 2019

Project management is one of the key aspects of business.

Every change, addition, or business venture that your company or organization goes through requires many, if not all, aspects of project management. Whether your business deals with one project at a time or a whole multitude of goals to achieve, the core tenets of project management remain the same.

Project management is both an art and a science. You can expect to go with your gut as often as you go by the numbers to accomplish your goals.

Hopefully by the end of this guide you’ll have a better understanding of these basic points and when you can expect to go by the numbers or use your judgement when leading your teams to success.

Here are the project management basics you should know:

  • Project management allows a team to follow and execute a detailed plan within a specific time period.
  • Project managers are responsible for team organization, time management, developing reports and more.
  • Your organization could utilize project management software in place of, or in addition to, a project manager.

Overview: What is project management?

Project management is just one segment of an entire company’s operation. It’s a system governed by a detailed plan and executed by a team for the purposes of achieving a goal, whatever that goal might be.

In many ways, project management is just like a car engine. There is a sequence of events, carried out by many moving parts, that must all happen within a specific timeframe in order for the engine to run properly.

Without the correct mixture of fuel, air, and spark, or the correct timing of these three key elements, the engine won’t fire. A project is very similar. Without the correct personnel, scope, money, and resources, a project will never succeed. Project managers ensure that all of these factors are handled, accounted for, and used when they are needed.

Project management is used in all sorts of industries, each with their own unique styles and methods for completing tasks and achieving goals.

When it comes to project management, there is no one-size-fits-all approach to achieving these goals, especially when considering the unique needs of different businesses.

What are project managers responsible for?

Project managers aren’t shadowy figures behind curtains pulling all of a project’s levers in an Oz-like fashion. Instead, project managers are leaders.

They are the coordinators of a project management plan, ensuring that key players and resources are utilized to their full potential in order to accomplish a goal in the optimal amount of time.

These are the key responsibilities of a project manager:

1. Team organization

Project managers ensure that they have the right people for the job and that they utilize team members where and when they are most needed.

They develop plans that steer everyone towards task completion and achieving a goal, and they motivate the team to realize their potential.

2. Time management

The inherent problem with bringing people together to accomplish a goal is the fact that everyone works at their own pace. The job of the project manager is to set realistic deadlines and clearly communicate those deadlines to the team.

On top of setting those deadlines, a good project manager will know when to shift resources when certain tasks are at risk of falling behind.

3. Monitor project progress

The initial project outline developed by the project manager gives the team a roadmap for success, but that doesn’t mean there won’t be any roadblocks. This is where project managers will step in and take corrective measures to ensure the project is delivered on time and on budget.

4. Develop and manage reports

The best project managers know that post-project reports are crucial, not only for ensuring all project requirements are delivered, but also for improving future methods and plans.

5. Project budgets and cost estimates

While it’s important to deliver a project that meets expectations and is on time, if you exceed your budget, your project might as well be considered a failure. A project manager should know how to prepare, manage, and ensure budgets don’t exceed their estimates.

How to develop your own project management plan

Building a project management plan requires you to consider many moving parts before you even begin writing out your first draft.

Luckily, I’ve put together five project management steps to get you on your way to building the perfect project management plan that will keep you on track and please your clients or stakeholders.

Step 1: Set up a meeting with the project stakeholders

The first step toward building a project management plan is to set up an opportunity for some face time with the stakeholders. Project stakeholders are those who are impacted by the results of your project, therefore they are the ones you will report back to about any developments and progress.

During this meeting, you will discuss:

  • The "why" for the project
  • Project goals
  • Project budget
  • Scope of the project
  • List of deliverables
  • The schedule

This is also a chance for you to discuss any potential pain points or roadblocks you may encounter with this project. This way, initial expectations are set before you begin.

Step 2: Set goals and define project success

Now that you understand what the stakeholders are looking for, it’s time to list out those needs and set goals around them. These goals have to be attainable and measurable using key performance indicators (KPIs) that will allow you to assess the successes and shortcomings of your project.

These KPIs can include:

  • Time spent: The amount of time spent by each individual team member on the project.
  • On-time completion: The rate at which project tasks were completed by the given deadline.
  • Planned hours vs. time spent: The amount of time spent on tasks, as well as on the overall project versus the estimated time to complete it.
  • Number of schedule adjustments: How many times your team had to shift deadlines.
  • Cost performance index: A comparison of the budgeted cost of work already done versus the actual amount already spent.
  • Budget line items: Detailed list of individual expenditures.
  • Return on investment (ROI): Measuring the value of a project against its overall cost.

Using these KPIs, along with many others, you can set measurable goals that will even help you determine the effectiveness of future projects.

Step 3: Define project roles and responsibilities

You’ve spoken to stakeholders and defined your goals, so now it’s time to assemble your dream team to help execute this project:

  • Project Manager: Who will build, execute, and manage the project?
  • Project Sponsor(s): Who will own and fund the project? They will have review and approval responsibilities for all project tasks and goals.
  • Project Team: Who will execute the project tasks? In most cases, they will not have review and approval responsibilities.
  • Industry Experts: Who will help develop the project scope and set the requirements for the project?
  • Risk Analysts: Who will assess the risks and challenges associated with taking on this project?

This is not a comprehensive list of all potential project roles. No two projects are exactly the same, and all have different needs, so feel free to create and add new roles as you see fit. Once you’ve put together your team, it’s time to start hammering out the remaining project details.

Step 4: Develop a project schedule and cost estimates

Once you’ve established your deliverables, your goals, and your team, it’s time to put together the real meat of your project plan: the schedule and the budget.

You can accomplish this through a seven-step process:

  1. Identify the tasks you will have to complete, as well as their dependencies.
  2. Determine the resources needed to complete each task.
  3. Estimate the time needed to complete each task and dependency.
  4. Develop a critical path for completion of the project using tasks and their dependencies.
  5. Develop an estimate for the cost of each task, including materials and hourly rates for those involved.
  6. Put together a schedule that includes the tasks and all of their time estimates.
  7. Establish an initial project budget.

Step 5: Present your plan to the stakeholders

Once you’ve gathered everything you need in your project plan, be sure to go back to the stakeholders to lay out the process to them. If at any point corrections need to be made, this is no big deal.

Just make a note of the potential changes, reassess your project plan, then come back with your adjustments for approval from your stakeholders. There will likely be multiple instances where your project management plan will require alterations and additions.

Do you need a project management software?

Every project needs a project manager, but does every project need software? Below I lay out the reasons why you might or might not need to adopt project management software into your strategy.

When project management software makes sense

Sometimes, everything else about your team makes sense. You have your strategy down and you’re about to move forward with a project. Now all you need is a tool to help you streamline your project management process and iron out the organizational kinks.

Here are four reasons why using project management software makes sense.

  • Improving project communication: If your team is struggling with speaking up about task needs, completion times, and pitfalls, then project management software (especially collaboratively focused software) can help you organize and incentivize your team’s communication.
  • Bringing multiple teams together: While it is possible to manage multiple teams without a dedicated project management tool, it’s far easier to make sense of all the chaos if you have one.
  • Managing project budgets: Not all projects have budgetary needs, but if they do, it’s best to address them in the same place you create the rest of your project reports. Project management software helps you keep your budgets close at hand along with the rest of your resources and data.
  • Require specific project data: When it comes to large and expensive projects, you can’t leave anything to educated guesses. Project management software is perfect for your team when everything has to be documented and accounted for.

When you should pass on software

Sometimes, project management software is exactly what you need and other times, it’s just another unnecessary expense. Here are four reasons why project management software might not be the solution you are looking for.

  • You’re lacking strategy: If your team is lacking a project execution strategy, no project management software will save you. Instead, your new tool will only serve as a conduit for you to spew out your disorganized mess, which helps no one.
  • You’re a one-person team: If you’re riding solo on a project, software won’t hurt, but it also won’t necessarily help you either. This is especially true if you’re operating on a small budget as it is. Opt for simpler tools like mobile to-do lists, calendars, and reminders.
  • You’re on a tight schedule: Let’s be honest, it takes time to learn a new project management software and onboard a team. If you’re on a tight schedule and you aren’t already using a project management tool, it’s probably best to wait until you have some off time to try a few out.
  • You’re on a tight budget: Let me clarify this one: You should pass on a paid project management software if you’re on a tight budget. There are free project management tools out there and you don’t always need to pay for an expensive platform.

Need help picking the right software?

Now that you understand the basics of project management, how to put together a project management plan, and when you will need software to bring it all together, why not let us help you find the right tool for you?

I’ve reviewed some of the best project management software platforms currently on the market, including:

Whether you’re new to project management software or need help deciding between choices, like Asana vs. Basecamp, The Blueprint will help you choose the right tool for you and your team.

The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned. Click here for more information.