A Guide for Project Management Including How to Estimate Budget

Project management team
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The Project Management Institute (PMI) defines project management as "meeting project requirement through the application of knowledge, skills, tools, and techniques to project activities. This is accomplished through the use of initiating, planning, executing, controlling, and closing a project."

Although this definition may seem complex, project management principals are actually rooted in common sense and practicality.

Whether you want to provide project management to your clients or your goal is to become a project manager, consider the fundamentals of project management step-by-step. Before you begin, determine if the service you are about to offer (or the assignment you're taking on) is truly a project.

General Management Versus Project Management

How do you decide if something is or is not a project? To break this down, separate the two different areas of management into functional (or general) management and project management.

Functional or general management is the continuous operation of a task. One example would be if you own a technology company and have a client for which you provide backup support and you continuously manage their yearly account by backing up their servers and provide them with a weekly activity report. If you do this for five years and have a renewable contract with the client, your work is continuous and therefore general or functional.

If, however, your client wants to implement a new content management system and they have one year to develop the new system and ask you to lead its development, your client has engaged you in a project.

Similarly, if you work with human resources and your job is to manage the department budget and supervise junior associates, then you have a functional job because it’s a continuous job that does not have a defined finish.

On the other hand, if you have the same HR job and the director of your department asks you to implement a new recruiting program (and provides you with a deadline and budget) and makes you the project manager, then this is a project because it has a start and end date and the task happens only one time. 

Visualizing Your Project Into Three Parts

Now that you understand the gist of what constitutes a project, you can take a closer look at project management. Using the recruiting program as an example, now that you know there's a need for a project, the next step is outlining the scope, time, and budget needed.

Project management is the planning, organizing, and controlling of the scope, budget, and time of the recruiting program project. To help visualize the project, draw a simple pyramid.  Each line of the pyramid represents one of the three main parts of a project (i.e., scope, time and budget). The empty space in the middle of the pyramid is the quality of the product delivered. The pyramid is an important tool to keep in mind as you plan your project because as your three main parts grow or shrink, the quality of the product is affected.

The Scope of the Project

Defining the scope is often the most difficult and complex part of project management.

Details of a project are generally unknown at the beginning, so estimating what activities and tasks are needed in order to execute the project take thoughtfulness. The scope consists of all the various activities and tasks that will be undertaken in order to produce the end product you'll deliver. Defining the project scope will help you determine the time and budget you’ll need in order to finish the project. A good way to begin is to simply write down what you think is needed to complete the task. Next, consult with others to gain a comprehensive view of all activities involved.

The Time of the Project

Once you’ve established an initial scope, you can begin to assign a time to each activity and task, and additionally, to look at the projects bigger picture. Ask yourself which activities will happen at the same time and which will happen sequentially.

Also, pay close attention to how many people will review the project activities because this will affect the time it will take to complete a step. It's surprising how long a simple task can take when three people need to review it. After calculating the time it'll take to complete the cumulative activities and tasks, you're ready to create a project schedule for the project team to follow.

The Project Budget

At this point, you’ve established the what (scope) and the length (time) of a project, Now it’s time to determine the budget. Much like calculating the amount of time for a project, you'll often have to consult others, including department leads to determine an accurate budget. A budget consists of multiple considerations including the use of people and materials involved in the activities undertaken and for how long they (i.e., the people) will be needed and the materials used.  

Communication Is Key

Often times a client (or boss) wants a project completed within a pre-determined time and budget without considering the scope of the project. The problem with this is that almost always, the scope of the project can't reasonably be completed given the time and budget constraints. Consequently, part of project management is negotiating the terms of the project's scope with a client or boss. Throughout the negotiation process, as well as the entire length of the project, good clear communication is the single most important skill you’ll need. The more clearly you communicate challenges along the way, the happier your client or boss will be.