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Why do Organizations do Projects?

This seems to be a simple question. You might say, "My organization does projects because it is in the business of doing projects." This is to an extent correct. A "temporary endeavor undertaken to provide a unique product or service" is a good definition of what is a normal business unit for many organizations that are working, for instance, in informational technology or construction. This way of organizing a company’s business allows us to manage resources reasonably and, which is more important, to keep constant focus on the client for the product, which largely increases the ability for a company to be successful.

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It is true that many organizations are either using or moving toward using a managed-by-project approach to managing company business. But even those companies whose major field of activity is manufacturing and production will face a strong need for project-oriented activities from time to time. These times occur mainly during times of change in a company. This might include a wide variety of cases, from introducing a product line to installing a new internal personnel training program. Companies need projects to be able to develop, to be flexible in answering the market, to carry out organizational structure change, to grow in size, and to conquer new markets.

All of this has given project management a new and more strategically oriented perspective. Indeed, both making a strategic decision and implementing it can be described in the framework of project management. This is a major reason why project management is becoming more widely recognized and used throughout the world.

This also has two other major consequences. The first is that many of the practices of general management, especially those related to human resources management and communications, are becoming more and more important in project management. The second is that what had initially developed as a unification of rather technically or mathematically oriented tools and techniques focused on budget and schedule control is now gaining more and more "humanitarian" features. The use of project management, first in governmental projects and then as a tool for a company’s internal change, has caused the development of new approaches and tools of more qualitative character. It is hard to develop profit forecasts for implementing new management training in a company or, worse, carrying out a major program of civil service reform. We can use figures here, but to a great extent that will mean falsification of data. Instead, project management starts by using many qualitative approaches and evaluations such as project success criteria.

We will spend some time later in this book discussing the actual process of strategic change and the application of project management tools and techniques to such projects. For now, it is important to point out that project management is slowly getting outside of the scope of a technical discipline that was developed to help choose between cost, time, and quality of a project. Project management is becoming more important strategically for the company as well as for general social and economic development.