Why Project Management is Important (And Tips for Success)

By Indeed Editorial Team

Updated September 26, 2022 | Published November 5, 2021

Updated September 26, 2022

Published November 5, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Related: A Day in the Life of a Project Manager

In this video, we follow Gillian, a project manager for an agency in New York, as she shows you what a day in the life of a project manager is actually like, including work hours, work environment and job duties.

Project management is a growing field and plays a vital role in ensuring projects align with a company's strategic goals. It can be a helpful process that reduces risk, saves money, resources, and improves teamwork. Understanding the principles of project management and why it's important can help you achieve business objectives, increase a team's productivity, and ensure projects stay within budgets and timelines. In this article, we highlight why project management is important, define its five phases, and share tips and examples to explain its various uses.

Related: Top 12 Project Manager Interview Questions and Answers

Why project management is important for success

Project management is an important process that organizes resources to achieve specific goals. It involves planning, organizing, and leading projects to meet numerical targets within budget requirements. Effective project management ensures all parties know their roles and responsibilities, agree on the objectives for each project stage, and work together to meet deadlines. There are typically five phases in the project management process:

  1. Initiating: The initiating phase identifies the business need, establishes its goals and objectives, and provides an initial outline. The aim is to develop a clear understanding of what needs to be done by whom, when, where, and how.

  2. Planning: This phase involves identifying specific actions required to meet objectives. During this phase, the manager must consider all appropriate areas, from project cost and staffing levels to the necessary equipment, materials, and technology.

  3. Executing: The executing phase is where the project manager carries out a project's tasks. In some cases, this may include setting up a new office or manufacturing facility or hiring staff members for key positions, and inventorying materials needed to complete a task or project.

  4. Monitoring and controlling: The monitoring phase involves tracking progress against the agreed-upon schedule, cost estimates, and defined targets. The monitoring phase also ensures the team meets all requirements throughout each project stage, including client specifications or regulatory guidelines.

  5. Closing: The closing phase involves finalizing a project's deliverables, obtaining client approvals, and ensuring the team completes all required sign-offs. The objective is to conclude all project activities formally and financial obligations outlined in the original contract or memorandum of understanding.

Related: How To Become a Project Manager (With Salary Expectations)

What are the benefits of project management?

There are numerous benefits of implementing project management. Here's how project management is important and how any project can benefit from it:

Creates a focus

Long-term projects require organization, leadership, and dedication to execute successfully. Project management relies on defining a scope for projects that follow specific deadlines for each task. With a clear scope, milestones, and deadline, companies can stay focused on the objective and complete goals successfully.

Example: You're a project manager for a software company that creates customized solutions for the hospitality industry. A hotel wants your company to create an integrated property management system that all employees can use. You hold a team meeting to define the scope. Your team gathers the requirements for the system, including guest tracking, turnover rate, and billing. With these requirements, you can determine the length of each task and milestone to develop a long-term plan. This scope helps you stay focused throughout the project.

Controls quality

Quality work ensures a positive outcome for the client, meaning the team puts all the planning, time, and resources to good use. To maximize quality, a project manager monitors the progress of each stage of the project and makes sure there are no unnecessary deviations from the plan. They also strategize and anticipate possible obstacles and develop solutions to overcome them, ensuring the final product meets all parties' expectations.

Example: Throughout the hotel management system project, you hold daily meetings and weekly individual team member sessions to measure the project's progress. You also audit the quality of the team's work by taking samples and asking employees outside of the team to evaluate the output. They can then give a fresh perspective on the quality they see and provide valuable feedback that helps you develop improvement strategies for the project.

Minimizes risks

The project management process provides a series of checkpoints to identify and manage risks during each stage, including reviewing all potential issues and putting together contingency plans for any problems. It also ensures the project team knows the business and budget requirements and any legal or regulatory concerns associated with a particular task. As a result, the project has fewer risks and is more likely to be successful.

Example: During the execution phase, you discover there may be an issue in integrating the hotel's current property management system with the new one your team is developing. To eliminate this risk, you hold a special session where you request feedback from your team and gather several ideas for a solution. After evaluating all the possibilities, you choose to implement one that poses the least risk to the rest of the project.

Related: How to Use Earned Value Formulas to Calculate Progress

Reduces costs

When a team completes a project on time and within budget, it can save the company money. Timely delivery reduces the chances of incurring extra costs from delays, and better planning also minimizes expenses by decreasing risk factors before they occur. Once a company creates successful project management phases, it can reuse the processes in future projects.

Example: You spend a portion of each day comparing the project's current cost against the budget. By reviewing this information daily, you make sure the project stays within budget. The hotel owner has also mentioned that they may be interested in creating an application for tablets for housekeepers to use. If they decide to move forward with that project, your team already has a basic template to work from later, saving costs and resources.

Encourages teamwork

Strong communication skills are vital to successful project management. Project management enables increased collaboration among team members. It further encourages people to share ideas and knowledge, which can help deliver projects on time and within budget. If something goes wrong, project managers encourage team members to work together to fix the problem.

Example: Apart from your meetings with each team member, you hold a weekly session to share ideas. During this session, each member shares new knowledge that the rest of the team may find helpful. Members also pose individual challenges so the group can find a common solution. You end the meeting by having each member highlight another member's effort or success.

Related: 22 Essential Project Management Skills

Maximizes resources

Every project has a limited number of resources, whether money, time, or human resources. Project management encourages effective resource management by allocating tasks to members of the project team and designing a schedule of deadlines and milestones. This allocation and design help everyone reach the same goal, maximize productivity, and minimize wastage.

Example: You ask the team to log their hours in a time tracking system each week, where they detail how many hours they spent on each task. The system then creates a report that you can review at the beginning of the week to determine whether the team members are spending the right time on each task and whether the project can meet the deadline.

Related: Benefits of Critical Path Analysis (With Advantages)

Encourages learning

During the closing phase of every project, the project management team usually reviews what happened and how they handled things. This review can help them identify areas for improvement which they can apply to future projects. Learning from mistakes makes the project management process more efficient over time, as the team improves work processes and reduces risk factors.

Example: You speak to the team about what went well and what could use improvement. This discussion encourages every member to share their input, helping everyone learn more about your tasks and roles on the team. It also provides an opportunity for you to identify new tools or processes you can use to improve.

Related: How To Improve Your Learning Skills

Tips for effective project management

It's essential to focus on several things to execute a project successfully. Here are a few tips to help keep your project running smoothly:

  • Create a list of jobs you want to accomplish. Prioritize the items on your list in order of importance. Take into consideration any problems that may arise and make some backup plans.

  • Keep everyone informed. Talk to every one of your team members and let them know where they fit in. Make sure you keep them updated on new developments or changes that come up during the planning stage.

  • Be flexible with your plans. Inevitably, changes often come up that the team did not anticipate. Be prepared for these situations by identifying alternate methods if problems arise during the project cycle.

  • Maintain an organized workspace. Having all your project tools, such as a task list, calendar, and contact lists, easily accessible helps keep you on track and focused. Consider using project management software to help you stay organized.

  • Build good relationships. The success of a project often depends on how well your team members work together. Developing good relationships can help you improve communication and encourage positive behaviours between team members.

  • Set clear expectations. Ensure all team members clearly understand their role on the project, what you expect of them, and the deadlines involved.

Now that we have reviewed the five phases of project management and its benefits, you can confidently answer the question, "why project management is important?".

The model shown is for illustration purposes only, and may require additional formatting to meet accepted standards.

Related articles

What is a Project Management Plan? With Tips and Examples

Explore more articles