The Ultimate Guide to Business Project Management
Managing business—or internal—projects can be just as challenging as managing external projects. Unfortunately, since internal projects do not generate revenue, organizations may be tempted to forego or neglect systems that facilitate good management of business projects.
However, that is an oversight that can lead to misappropriated resources, budget overruns, delayed timelines, and even failed projects.
In this article, we’ll review the core principles, key phases, and common methodologies associated with business project management and share some tips to help you get started.
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What is Business Project Management?
Business project management is the set of work processes that organizations follow for planning, executing, and managing internal projects. To understand what’s involved in business project management, let’s consider each of these processes by phase:
- In the planning phase, project managers review the proposed project scope to align project goals with organizational goals. They also establish key performance indicators (KPIs) or other metrics to evaluate project performance.
- During the execution phase, project managers work with the project team to complete deliverables and monitor project progress.
Business Project Management vs. General Project Management
General project management involves planning, executing, and monitoring a set of activities required to meet stated customer goals.
Business project management is a subset of project management that applies to internal projects. These are projects that an organization undertakes in the service of strategic objectives or to improve operations. Business projects are non-revenue generating, and the target “customers” are internal stakeholders, rather than external clients.
The table below highlights the key differences between business project management and general project management:
Why Business Project Management Matters
Even though business projects do not generate revenue for an organization, effective project management of these efforts is still in a company’s best interests.
Applying consistent project management methodologies for business projects can help an organization to select and prioritize those projects that will have the biggest impact on improving organizational efficiency. Spending the time to document project scope and skills required for project completion can also help prevent scope creep and improve resource allocation.
Implementing business project management also ensures that you have consistent processes in place to report on project milestones, support real-time decision making, and monitor potential risks that could interfere with project success.
Benefits of Business Project Management
Business project management offers multiple benefits when it comes to managing projects:
- Aligning Projects with Business Goals: This approach establishes a strong project selection process that documents project goals and scope to ensure project objectives align with organizational objectives.
- Improving Efficiency and Productivity: This process standardizes ways of working to reduce bottlenecks and optimize team performance.
- Managing Risks and Uncertainty: By gathering stronger data during project execution, it becomes easier to monitor and respond to emerging risks across your project portfolio.
- Greater Business Agility: Real-time data collection promotes informed decision-making about when to adjust resource allocation and/or task prioritization during execution.
- Enhancing Collaboration and Communication: This method offers an established set of communication protocols that reduce confusion about when and how to communicate across stakeholder groups.
Core Principles of Business Project Management
Business project management typically adheres to a set of core principles. Keeping these principles in mind will help you to more effectively implement business project management processes within your organization:
1. Goal-Oriented Planning
Planning a business project effectively requires you to align stakeholders on desired project goals and document those goals in a project charter. If you fail to gain consensus on the reason you’re doing the project, the project will likely be put aside at some point in favor of other business priorities.
2. Resource Management and Optimization
Resource optimization is particularly important for non-revenue-generating projects, as cost control is a major focus of business project management. Aim to staff projects with cost-effective resources that have the right skills to deliver project outcomes.
3. Performance Measurement and KPIs
To hold your organization accountable for meeting project objectives, you’ll need to establish formal success criteria and ways to evaluate progress using KPIs.
4. Continuous Improvement and Adaptability
Optimizing project workflows reduces expenditures and boosts the value that you are delivering to stakeholders. Use the data you are collecting during the monitoring and controlling phase to continuously refine your project management processes in light of changing circumstances.
Key Phases of Business Project Management
Effective project management ensures that work flows smoothly throughout the project life cycle. Below are the key phases to consider when it comes to business project management:
1. Initiation
In this stage, you’ll evaluate whether the project is worth pursuing. This might require developing a business case and/or a feasibility study to determine whether the project is expected to generate a return on investment.
2. Planning
If leadership decides to pursue the project, then the project enters the planning phase. At this stage, you’ll define the project requirements, use a work breakdown structure to break down project goals into discrete tasks, create a detailed project schedule, and establish a process for risk management. The major deliverable coming out of this phase is the project management plan.
3. Execution
The focus of the execution phase is task management. You’ll assign work, rally team members around a common goal, and collaborate with them to complete the deliverables you identified during the planning phase.
4. Monitoring & Controlling
Monitoring and controlling go hand in hand with execution. As the team is completing project activities, the project manager assesses KPIs and reports progress to key stakeholders.
5. Closure & Evaluation
During project closeout, the project team wraps up any outstanding deliverables. The project manager holds a retrospective to collect feedback on project performance and documents lessons learned to apply to future projects.
How to Get Started With Business Project Management
Implementing a business project management system for the first time may seem overwhelming. To help you get started, here is a simple set of steps you can follow:
1. Define Clear Objectives and KPIs
Failure to align on project objectives or to define what project success looks like poses one of the greatest risks to project success. Work with stakeholders at the outset of a project to clearly define your intended goals and how you’ll measure progress throughout the entire project.
2. Build a Skilled Project Management Team
Teamwork makes the dream work! As you review the deliverables required for project completion, consider how many people with what skill sets you’ll need to achieve project outcomes. Selecting team members with the know-how needed to meet project requirements greatly simplifies project execution.
3. Select the Right Tools & Technology
Don’t overlook the importance of project management tools as a key resource requirement for your project. Implementing project management software, for example, can help you build a project roadmap, visualize the project timeline, and support automation of the software development process.
4. Establish Effective Communication Channels
One of your key duties as a project manager is to foster collaboration across stakeholders. Define and agree upon approved communication channels, including when to use what channel, and socialize these collaboration tools so there is consistency across the team.
5. Monitor Progress & Adjust Strategies
As your project progresses, assess the remaining budget and timeline against outstanding activities, and make any necessary adjustments to keep your project on track.
Business Project Management Frameworks & Methodologies
Just like with general project management, you can implement a business project management system using various project management methodologies. Examples of these frameworks and methodologies include:
- Waterfall: Collects requirements upfront that are unlikely to change. Waterfall projects move linearly through distinct phases of work to deliver a well-scoped end product.
- Agile: Emphasizes incremental product delivery throughout the project life cycle. On agile projects, the project team responds to requirements that may change rapidly based on changes in business value and/or ongoing stakeholder feedback.
- Scrum: A form of agile project management that organizes work into defined time periods, or sprints, to maximize value delivery based on stated priorities.
- Lean Six Sigma: A form of agile project management that focuses on efficiency and waste reduction by streamlining and simplifying processes to maximize customer value.
Choosing the Right Methodology
Existing organizational processes and/or stakeholder preferences may dictate which methodology you end up using on your project.
But, if the choice rests with you as the project manager, you’ll want to consider factors such as project size, complexity, quality standards, desired speed of execution, as well as stakeholder engagement, to help inform which methodology is right for you.
Measuring Success in Business Project Management
Project managers can assess the health of their business project management system by analyzing the KPIs they established during the project planning phase.
Here are some examples of KPIs, both quantitative and qualitative, that you might consider for your business projects:
- Budget adherence: Controlling costs is especially critical for non-revenue generating projects. This metric assesses whether your project is at risk for exceeding its budget.
- Return on investment (ROI): The business case for your project likely required you to demonstrate whether the organization would recoup its initial investment. This metric compares project costs with realized or forecasted benefits.
- Time to completion: This metric assesses whether your project is on track for completion within stated timeframes.
- Customer satisfaction: This metric surveys internal stakeholders to determine whether they are satisfied with project outcomes.
Remember that successful project management demands an iterative approach. Review your metrics for utility throughout the project life cycle and make adjustments, as necessary, to collect more useful project data.
Furthermore, don’t wait until the end of your project to conduct retrospectives on potential areas for improvement. If you are practicing agile project management, build in time for collecting lessons learned at the end of each sprint.
Tools for Business Project Management
Project management software aids businesses in successful project management. For example, you can use project management tools to break down complex projects into manageable tasks, organize the backlog of work remaining, and create visuals, such as Kanban boards, Gantt charts, and dashboards, to report on project progress.
For more information, check out our list of the best project management software for business:
Business Project Management Best Practices
Here are some best practices for implementing a business project management system:
- Standardize processes and workflows: Establishing consistent processes and workflows across business projects simplifies execution and makes it easier to assess project health across your portfolio.
- Use work management software: Using project management software lets you set up automation for common project workflows to streamline cross-functional execution. You can also configure alerts to notify you of potential schedule or budget risks before they are realized.
- Set clear goals and priorities: During the initiation phase, document project goals and ensure that these goals map to organizational priorities. Once you’ve reached consensus across your stakeholders, further distinguish what is in and out of scope to support successful project execution.
- Monitor and adjust continuously: Particularly when it comes to business projects, your focus should be on continuous improvement to help you reduce expenditures for non-revenue-generating projects. Track and report on project progress and work with your team to find ways to optimize execution.
- Document and implement lessons learned: The knowledge you gain from operating a project is only useful if you take the time to incorporate lessons learned into future projects. Build time into the project initiation and project planning phases to review and apply lessons learned when it comes to project selection and work management.
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