definition of methodology in project management

Project Management Methodology: Definition, Types, Examples

What is a project management methodology ? How can it be defined? In simple terms, it is a must-have to avoid failure and reduce risks because it is one of the critical success factors as well as the core competency of the management team. It is the straightforward way to guide the team through the development and execution of the phases, processes and tasks throughout the project management life-cycle.

What is a Methodology? The Definition in Project Management

The term “ project management methodology ” was first defined in the early 1960s when various business organizations began to look for effective ways that could simplify the realization of business benefits and organize the work into a structured and unique entity (which was called “ project ” later on). Communication and collaboration were the key criteria for establishing productive work relationships between the teams and departments within one and the same organization.

Since that time, the term has been changed and modified many times, new definitions have been created, new elements and functions have been added. Today we consider a project management methodology as a set of broad principles and rules to manage a specific project that has a definite beginning and end. Below is the current definition of methodology .

Project Management Methodology is a strictly defined combination of logically related practices, methods and processes that determine how best to plan, develop, control and deliver a project throughout the continuous implementation process until successful completion and termination. It is a scientifically-proven, systematic and disciplined approach to project design, execution and completion.

The purpose of project methodology is to allow for controlling the entire management process through effective decision making and problem solving, while ensuring the success of specific processes, approaches, techniques, methods and technologies.

Typically, a project management methodology provides a skeleton for describing every step in depth, so that the project manager or program manager will know what to do in order to deliver and implement the work according to the schedule, budget and client specification.

Referring to the above mentioned definition, an appropriately chosen project management methodology paves the way for gaining the following achievements:

• The needs of stakeholders are defined
• A common “language” is established and understood by the team, so they know what’s expected of them
• Cost estimates are complete, accurate and credible
• Every task is done using a common methodological approach
• Most conflicts are spotted and resolved early
• Expected deliverables are produced and handed over
• Lessons are learned and solutions are quickly implemented

Methodology in Project Management Framework

Project management (the acronym “PM”) provides the framework of planning, doing and delivering projects of any kind, size, nature and type. PM framework focuses on the realization of desired change in line with a chosen methodological approach. Actually, change is the core aspect that should be managed. PM framework identifies and defines how to best manage change. And methodology serves as the “way” to systematically realize change in terms of time, cost and quality.

Managing projects means describing and performing the activities required to meet the specific objectives of making change.

For example, writing a book is a kind of project in which the objective is to write a book. This objective can be fulfilled by a series of activities, including defining the topic, collecting material, creating a draft, typing, proofreading, others. So in terms of project management, the author needs to define and then complete all the necessary activities in order to write a book (which means make change).

Here’s a simplified example of how a project methodology can be presented in the management hierarchical structure:

PM Framework precedes Methodology which in turn precedes Lifecycle Stages and determines the project management Processes, Tasks and Activities

Project Management Methodology Types

In project management there are a variety of approaches and methods that can be employed in managing different kinds of project. All the types of project methodology can be conditionally divided into traditional and modern approaches.

Traditional Approach

A traditional approach involves a series of consecutive stages in the project management process. It is a step-by-step sequence to design, develop and deliver a product or service. It entails achieving the succession in the implementation process and provides the benefits of milestone-based planning and team building. In IT and software development, this methodology type is called “ Waterfall ” – one portion of work follows after another in linear sequence.

The following stages are included the traditional project management methodology:

• Initiation (requirements specification)
• Planning and design
• Execution (construction and coding)
• Control and integration
• Validation (testing and debugging)
• Closure (installation and maintenance)

Modern Approaches

Modern methodologies do not focus on linear processes but they provide an alternative look at project management. Some of the methods are best for IT and software development, while others can be implemented in production, process improvement, product engineering, and so on. Modern PM approaches use different models of the management process.

Project Management Methodology Examples

It is the matter of a project’s type, size and nature to select the right methodology. Here are the most popular PM methodologies:

PMBOK® Guide

Although A Guide to the Project Management Body of Knowledge IS NOT a PM methodology in its “ pure state “, many people regard it as the methodological approach to planning, executing, controlling and terminating various projects. Meanwhile, the PMBOK® Guide is a broad inventory of best practices and ideas on planning and implementing projects. Please note that it is just a guide but not a project management methodology.

PRojects IN Controlled Environments 2 ( PRINCE2 ) presents a suite of process-driven methods and documentation-oriented approaches that allow driving various projects in the private sector. It was developed the UK Government, and today this great example of project management methodology is used both in the UK and internationally.

Critical path method (CPM) explores the most important or critical tasks of a project by defining possible activity sequences and estimating the longest duration of each sequence. It helps figure out how long it will take to complete the work and what tasks will compose the scope.

Lean PM methodology intends to maximize customer value and minimize resource waste. Lean project management lets organizations create higher value for their customers with fewer resources. This approach achieves perfection in customer satisfaction and value generation through implementing an optimized process flow that eliminates waste in products, services, transportation, inventories, etc.

The method of Six Sigma was originally developed by Motorola to improve its production processes by eliminating defects (defined as “non-conformity of a product or service to its specifications”). Today Six Sigma is one of the most popular and worldwide trusted examples of project management methodology for ensuring the accuracy and speed of a process’s implementation through eliminating or minimizing waste.

Critical Chain Project Management (CCPM) is the way to plan, implement and review various kinds of work in single- and multi-project environments. This management methodology uses Theory of Constraints (TOC) and the concept of buffers to establish improved task durations and manage resource-dependent tasks and activities.

SCRUM is an example of Agile PM methodology that involves teams in producing a software product in 30-day “ sprints ” and monthly “ scrum sessions “. In a SCRUM-driven project, the deliverables are broken down into 30-day intervals. This methodology example is specific and applicable mainly to collaborative, 100%-dedicated teams, with no heavily constrained time and materials budget.

Project Management for Students

Project management for students is a vital part of the education and training process. Students can easily get a project management degree, but it does not mean that it comes as easy as taking the homework. Students need to take into account some important aspects if they want to manage a project properly.

For instance, choosing the best admission essay writing service is of great importance because if for some reason the student cannot deliver a high-quality essay in time, he will most likely fail the course or even worse he will be expelled from the college or university.

Students should prepare well for the project or the essay. They need to research on the topic beforehand, keep track of what is going on, write on time and work within the deadline.

This will allow them to catch up with their fellow students, focusing only on what they have to do and not worrying about what other people are doing.

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• Project Management Methodologies

Project Management Methodologies: Definition and Examples

Project management is a complex business process that involves planning and allocating resources, executing tasks, and achieving a predefined goal. The constantly changing project management field is fluid; it varies depending on the methodology, industry, or project manager themselves. 

From HR to IT, sales, and marketing, teams across businesses and industries consistently rely on project management methodologies to forge and deliver outstanding results. Yet, the project management methodology landscape can seem vast and overwhelming, especially if you are new in this position.

As a project manager, you must decide which project management methodology ensures the most efficient use of your team’s resources, skills, and time. Finding the proper project management methodology is not rocket science. 

Reading our guide and learning more about project management methodologies brings you closer to becoming a successful project manager.

TABLE OF CONTENT

• Definition of Project Management Methodology
• Critical Path Method
• Critical Chain Project Management
• How to choose the proper Project Management methodology
• Bottom line

I. The definition of Project Management Methodology

A project management methodology combines principles, techniques, practices, and tools and ensures you plan, execute, monitor, and complete a project. 

As projects differ depending on their goals, teams, KPIs, and operating methods, several approaches to managing them properly exist.   

While a methodology can be excellent for a team, it can become a nightmare for another. 

When a traditional project management methodology became obsolete and hindering rather than helping, teams needed to adapt and develop new methods to address their concerns. Soon, other teams and industries started implementing and adapting these new methods. 

This ever-evolving process has led to a wide range of various project management methodologies to choose from. 

Project managers must learn about project management methodologies to identify the one that tailors their teams' needs and ensures the project's successful implementation. 

II. Top Project Management Methodologies

While numerous approaches exist, the following ten project management technologies are the most well-known.

1.    Waterfall methodology - the traditional approach

What is it?

The Waterfall methodology emphasizes a straightforward project progression from beginning to end. 

The project is well-defined and split into several dependent stages of execution. The outcomes of each phase “cascade” on the following one, like water falling on the rocks. When using this methodology, you must complete a step before moving on to the next one. 

Once the team chooses the Waterfall methodology, it must define the actions based on the methodology sequences:

• Requirements
• Implementation
• Verification & Testing
• Deployment & Maintenance

When to use it?

The Waterfall method is excellent for large projects, with little to no variations and a clearly defined and solid goal. This approach is highly efficient in manufacturing and construction projects.

Who should use it?

Due to its sequential and detail-oriented nature, the Waterfall methodology works for large projects involving multiple clients and stakeholders, predictable costs, and fixed milestones. This linear approach promotes collaboration, improves communication, and helps teams focus on the tasks.  

2.    Agile - one of the most commonly used frameworks

The Agile project management methodology is a set of principles that focus on speed, agility, collaboration, and flexibility. It was developed in response to growing discontent with the rigidity and limitations of the traditional waterfall approach. 

In our dynamic business environment, teams and companies must quickly adapt to changes, customers, and technologies. The Agile design emphasizes collaboration, encourages feedback, and allows teams to incorporate changes to the work in progress instead of waiting until the end to review and implement the amends. 

The lifecycle of Agile methodology consists of five stages:

• Development

The main advantage of the Agile methodology is its adaptability, which makes it the perfect choice for teams in the software development industry. Working in short sprints (2-3 weeks) allows employees to revise, recalibrate, and improve their projects while they are ongoing.  

Due to its versatility, the Agile methodology is highly effective for teams working on projects where some details are unknown from the onset or might evolve during project development. It is also valuable when working on projects involving regular customer feedback. When time-to-market is crucial, the Agile methodology enables teams to deliver excellent outcomes quickly.

3.    Scrum - the most used type of Agile methodology

Scrum methodology is more of an Agile framework than a methodology in itself. It encompasses the Agile principles and implements them in small teams (no more than ten employees), working on short sprints (usually one week). 

The project team holds daily Scrum meetings led by a Scrum master (not the same person as the project manager). After each sprint, the team reviews their progress in a “retrospective meeting” and makes any necessary adjustments.

Here are the main steps that make the Scrum methodology effective:

• Sprint planning
• Daily Scrum
• Sprint review
• Sprint retrospective.

While it is used extensively by teams and organizations across all industries, the Scrum framework is highly effective for projects with variable outputs, unknown solutions, frequent and faster product delivery, and regular interactions with clients or end-users. 

The term scrub comes from rugby and refers to the players gathered on the field during the match to make strategic decisions to win the game. In the business environment, this method is more prevalent within small software development and engineering teams.

4.    Kanban - the visual overview of the project execution

The Kanban project management methodology is a physical or digital representation of the Agile principles. 

This Agile framework allows teams to visualize their progress in real-time, improve workflow, reduce waste of time and material, and maximize efficiency. 

Kanban combines two Japanese words: kan - meaning sign, and ban - meaning board. The signboard was developed by an engineer working for Toyota in the late 1940s. 

A comprehensive Kanban board has the following key components:

• Work-in-progress (WIP) limits

For many years, Kanban was very popular in the automotive industry. Due to its efficiency, IT managers and software development teams embrace this methodology. 

The ability to change throughout the project makes Kanban particularly efficient for businesses with a continuous and constant flow, such as marketing and publishing.  

The Kanban methodology works best for stand-alone teams working on projects without too many tasks or resource dependencies. 

The Kanban framework is used at a large scale by teams who adopt Lean and Agile as the boards ensure the visibility and transparency necessary to secure business agility.  

5.    Lean - deliver more value with fewer resources

The Lean project methodology emphasizes continuous improvement of the company’s workforce, resources, and efforts to optimize customer value while reducing waste of time and energy. 

We know that lean in the food industry refers to poultry and fish: healthier meats with less fat. In business and project management , Lean refers to a method that removes faults and defects during every phase, which keeps the project healthier. 

Like Kaban, the Lean methodology comes from a Japanese engineer who created the Toyota Production System (TPS). TPS inspired John Krafcik, who introduced the Lean approach to project management.

Each principle of the Lean methodology aims to reduce waste while staying within the project scope and reaching customer satisfaction:

• Define value
• Map the value stream
• Develop a continuous flow
• Create a pull system
• Enable continuous improvement.

The Lean approach is highly effective for small teams working on software development and manufacturing products within a short time frame. This framework also helps growing businesses refine their processes and resources to produce high-quality outcomes with minimum waste.

Initially used in manufacturing physical products, the Lean methodology is widely adopted for process improvement in all sectors, from retail, healthcare, and education to software development, services, logistics, construction, and maintenance. 

6.    Scrumban - the hybrid project management methodology

The Scrumban methodology extracts the best features of Scrum and Kanban frameworks and combines them into a hybrid project management approach.

Originally designed as a transition phase from Scrum to Kanban, the Scrumban methodology has evolved into a mature and flexible framework.

The main benefit of this new method is that it incorporates the work-in-progress limits (from Kanban) into the projects’ sprints (from Scrum). The result is a flexible method that ensures flow continuity while incorporating project planning and revising. It allows teams to manage projects of any size. 

The Scrumban process consists of the following steps:

• Create the Scrumban board
• Establish the work-in-progress limits
• Prioritize the project and tasks
• Set and hold daily meetings

The Scrumban method ensures a consistent flow when working on long-term or ongoing projects with no set deadline. 

Scrumban is perfect for teams that prefer to split large projects into smaller parts using simple yet effective visual representations. 

7.    PRINCE2 - Projects In Controlled Environments methodology

The PRINCE2 project management framework, as its name states it (Projects In Controlled Environments), focuses on organization and control throughout every project stage. This linear and process-based methodology starts with an elaborate project plan and definition of each phase.  

This method emerged in 1989 from the UK’s government methodology: the Project Resource Organization Management Planning Technique (PROMPT).

Initially used for managing IT projects, PRINCE became popular among teams working on any project. So, in 1996, PRINCE2 was launched. 

PRINCE2 has seven steps guiding a team from initiation to project closure, as follows:

• Starting up the project
• Initiating a project
• Controlling 
• Managing product delivery
• Managing stage boundaries
• Closing the project

The PRINCE2 methodology is best fitted for large projects involving many stakeholders.

Due to its simple yet clear-structured process, PRINCE2 is an excellent method for teams new to managing projects. 

8.    Six Sigma - more a philosophy than a methodology

The Six Sigma approach is used for quality management and helps companies identify the root causes of complex issues. 

The Six Sigma project management methodology is a quality improvement framework that helps enterprises enhance their performance while reducing the rate of errors arising from process variations.  

Motorola first used the Six Sigma methodology in 1986, and General Motors later embraced it. The methodology consists of five data-driven stages (DMAIC).

The Six Sigma methodology is highly efficient for projects involving complex processes with many variables.

Six Sigma is best suited for large enterprises with over 100 employees operating across all industries.

9.    Critical Path Method - the amplest step-by-step project plan

The Critical Path Method (CPM) represents a project management methodology that allows teams to identify, analyze, plan, and schedule tasks crucial for project closure. 

The Critical Path Method is a roadmap that helps teams visualize the critical steps toward the end goal. It occurred in the late 1950s as a solution to reduce costs resulting from inefficient scheduling.  

There are six CPM steps:

• Identify each activity
• Define the activity sequence
• Create the Critical Path Analysis Chart
• Estimate completion time for each activity
• Define the Critical Path
• Update the Critical Path

The Critical Path Method is an excellent tool for teams managing complex projects with numerous dependencies. 

The Critical Path Method is best suited for small and mid-sized teams.

10.    Critical Chain Project Management - a more detailed CPM

The Critical Chain Project Management methodology focuses on project success while emphasizing the efficient use of resources (people and materials). 

The Critical Chain Project Management framework uses a structure similar to the Critical Path Method. In addition, CCPM includes time requirements for completing each task. This feature allows project managers to track activities and see which tasks exceed their allotted time. 

Here are the key steps to follow when using the CCPM methodology:

• Identify the Critical path
• Determine the amount of resources necessary to create the critical chain
• Create and insert buffers
• Establish a detailed project model
• Keep team members focused and eliminate multitasking
• Track the project

The CCPM methodology solves the efficiency problems of large and complex projects.

Due to its detailed structure, the Critical Chain Project Management framework is excellent for all types of teams.

III. How to choose the proper Project Management methodology

Any team that works on a project basis and yearns for success should master the art of planning, managing, and completing projects. Choosing the suitable project management methodology is crucial for keeping your team members focused and motivated to achieve consistent results throughout the project.

Before deciding which methodology to implement in your organization, you must carefully consider the following factors:

The project’s needs

Collect data about the resources required to complete the project. Knowing the project's needs initially helps determine which project management methodology meets your specifications best. Gather information about the following:

• Team structure
• Project complexity and objectives
• Customer details
• Flexibility
• Constraints
• Roles of team members and collaboration
• Stakeholders .

The project’s key variables

Once you learn the permissions and limits of the project, you can determine which variables impact your project. By doing so, you can establish your priorities and and choose the project management technique that fits them best.

Create a comparison chart

Identify the most relevant project management methodologies that fit within your resources and variables. Craft a list of pros and cons, compare the methods to the project, and make a data-driven decision.

Assess the risks and rewards

The following phase of choosing the best project management methodology is to estimate the possible risks and success rates for each approach. You should implement the method with the highest success rates and minimum risks.

IV. Bottom line

In the current fast-paced business environment, it is critical to bring different teams and departments to work together towards the same goal: a thriving company. 

By understanding the purpose of project management and learning the principles of project management methodologies, you are closer to choosing the best framework for your team. 

There is no one-size-fits-all project management methodology. While a method may work for a team or company, it may be a nightmare for others. Thus, you must first assess the risks, challenges, weaknesses, and strengths and then select the best methodology (or a hybrid approach). 

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• Project management |
• Project management methodologies: 12 po ...

Project management methodologies: 12 popular frameworks

Project management is an ever-evolving field that requires a number of approaches to be successful. Learning the most popular project management methodologies can help you become an industry expert. 

In order to be the best possible project manager , learn about each of these 12 frameworks to find the one that best fits your team’s needs. 

12 project management frameworks

What it is: The Agile project management methodology is one of the most common project management processes. But the reality is that Agile isn’t technically a methodology. Instead, it’s best defined as a project management principle. 

The basis of an Agile approach is:

Collaborative

Fast and effective

Iterative and data-backed

Values individuals over processes

When it comes to putting the Agile manifesto in place, teams often choose specific methodologies to use alongside Agile. These could include Scrum, Kanban, extreme programming, crystal, or even Scrumban . That's because connecting Agile methodology with a more detailed approach produces a well-rounded project management philosophy and a tangible plan for delivering great work. 

Who should use it: The Agile framework can be used for just about any team. This is because the principle behind it is rather universal. The real trick is deciding which methodology to use with it.

2. Waterfall

What it is: The waterfall model is also a very popular framework. But unlike Agile, waterfall is an actual methodology that is rather straightforward. The waterfall methodology , also known as software development life cycle (SDLC), is a linear process in which work cascades down (similar to a waterfall) and is organized in sequential order. 

To achieve this approach, each work task is connected by a dependency. This means each task must be completed before the next task can be started. Not only does this ensure that work stays on track, but it also fosters clear communication throughout the process. 

While viewed as a traditional approach by some modern organizations, this method is good for creating a predictable and thoroughly planned-out project plan . 

Who should use it: Since the waterfall project management methodology is so detailed, it’s great for working on large projects with multiple different stakeholders. This is because there are clear steps throughout the project and dependencies that help track the work needed to reach goals. 

What it is: The Scrum methodology involves short “sprints” that are used to create a project cycle. These cycles span one to two weeks at a time and are organized with teams of 10 or less. This is different from the waterfall approach where individual tasks are broken down into dependencies.

Scum is unique for a variety of reasons, one being the use of a Scrum master. Or, in other words, a project manager that leads daily Scrum meetings, demos, sprints, and sprint retrospectives after each sprint is completed. These meetings aim to connect project stakeholders and ensure tasks are completed on time. 

While Scrum is technically a project management methodology in its own right, it’s most commonly associated with an Agile framework. This is because they share similar principles, such as collaboration and valuing individuals over processes. 

Who should use it: Teams that use an Agile approach should use, or at least try, the Scrum methodology as well. Since sprints are divided into small teams, this approach can work for both small and large teams. 

What it is: The Kanban methodology represents project backlogs using visual elements, specifically boards. This approach is used by Agile teams to better visualize workflows and project progress while decreasing the likelihood of bottlenecks. It’s also usually in the form of a software tool that allows you to change and drag boards seamlessly within projects, though it’s not a requirement. 

Since this method doesn’t have a defined process like others, many teams use it differently. The main concept to keep in mind is that Kanban aims to focus on the most important project tasks, keeping the overall framework simple.

Who should use it: Kanban boards are great for teams of all sizes and specifically remote-first teams. This is because the visual capabilities of Kanban boards help team members stay on track no matter where they are. 

5. Scrumban

What it is: As you may have guessed, Scrumban is a methodology that draws inspiration from both Scrum and Kanban frameworks. Some think of this as a hybrid approach that incorporates the best of each. 

Scrumban uses a similar sprint cycle as Scrum but allows individual tasks to be pulled into the plan like Kanban. This allows the most important work to be completed and keeps project plans simple. Scrumban also uses Scrum meetings to enhance collaboration and keep goals top of mind. 

Who should use it: If you like the idea of breaking down a project into smaller tasks, but likewise want to keep it visually simple, Scrumban might be for you. It’s the perfect intersection of simplicity and clarity.  

What it is: PRINCE2 , otherwise known as PR ojects IN C ontrolled E nvironments, uses the overarching waterfall methodology to define stages within a project. It was initially created by the UK government for IT projects and still primarily suits large IT initiatives over the traditional product or market-focused projects. 

There are seven main principles of PRINCE2, which include:

Starting a project

Directing a project

Initiating a project

Controlling a project

Managing product delivery

Managing a stage boundary

Closing a project

These seven principles create a thorough project process and make for an effective enterprise project methodology altogether. It aims to define roles and back management. Not only that, but PRINCE2 can be used to streamline a ton of individual project management tasks, like controlling a stage, managing product delivery, and initiating and closing a project. 

Who should use it: Due to the particular nature of the PRINCE2 project management methodology, it’s best suited for large enterprise projects with a number of project stakeholders . Using it for small projects may create a longer and more complicated process than necessary. 

7. Six Sigma

What it is: Unlike the other PM methodologies, Six Sigma is used for quality management and is frequently described as a philosophy rather than a traditional methodology. It is often paired with either a lean methodology or Agile framework, otherwise known as lean Six Sigma and Agile Six Sigma. 

The main purpose of Six Sigma is to continuously improve processes and eliminate defects. This is achieved through continuous improvements by field experts to sustain, define, and control processes. 

To take this method one step further, you can use a Six Sigma DMAIC process, which creates a phased approach. These phases include:

Define: Create a project scope , business case , and initial stand-up meeting.

Measure: Collect data that helps inform improvement needs.

Analyze: Identify the root causes of problems. 

Improve: Solve the root causes found.

Control: Work to sustain the solutions for future projects. 

Who should use it: Six Sigma is best for large organizations, usually those with a few hundred employees or more. This is when the need to eliminate project waste starts to have a larger impact on your organization. 

8. Critical path method (CPM)

What it is: The critical path method works to identify and schedule critical tasks within a project. This includes creating task dependencies, tracking project goals and progress, prioritizing deliverables , and managing due dates—all of which are similar to a work breakdown structure .

The objective of this methodology is to properly manage successful projects at scale so that milestones and deliverables are mapped correctly. 

Who should use it: The critical path method is best for small and mid-size projects and teams. This is because large projects require many deliverables with multiple stakeholders and the CPM isn’t built to manage complex projects. 

9. Critical chain project management (CCPM)

What it is: The critical chain project management framework is closely related to the critical path methodology but is even more detailed, making it one of the most comprehensive options. 

Along with implementing a work breakdown structure like CPM, CCPM includes specific time requirements for each task. This helps take task tracking one step further, making it clear when tasks are going over their allotted time. It also uses resource leveling which aims to resolve large workloads by distributing work across available resources. 

Not only do these help both productivity and efficiency, but they also help connect the work needed to be completed with project goals. Many project management tools even have visual elements to better visualize these goals, creating an organized road map for team members. 

Who should use it: CCPM is a great method for both small and large teams, but it mostly helps solve project efficiency problems . It can also be a great way to report work in progress to leadership. 

What it is: The lean project management methodology aims to cut waste and create a simple framework for project needs. This ultimately means doing more with less in order to maximize efficiency and teamwork. 

While reducing waste originally referred to a physical product (which dates back to the method used by Henry Ford and later by Toyota and Motorola), it now refers to wasteful practices. There are three Ms that represent this:

Muda (wastefulness): Practices that consume resources but don’t add value  

Mura (unevenness): Occurs through overproduction and leaves behind waste 

Muri (overburden): Occurs when there is too much strain on resources  

As a project manager, your job is to prevent the three Ms in order to better execute projects and streamline processes. This is similar to the approach of rational unified process (RUP), which also aims to reduce waste. The difference is that RUP aims to reduce development costs instead of wasteful practices. 

Who should use it: Since lean is all about reducing waste, it’s best suited for teams struggling with efficiency issues. While this will have a greater impact on large organizations, it can be helpful for project teams of all sizes. 

11. Project management institute’s PMBOK® Guide

What it is: While the PMI’s Project Management Body of Knowledge is associated as a project management methodology, it’s more closely related to a set of best practices that take into account various development processes. 

This framework focuses on implementing the five project management phases , all of which help easily manage a project from start to finish in a structured phase approach. The five phases include:

Project initiation

Project planning

Project executing

Project performance

Project closure

While this is a good foundation to keep in mind, the PMBOK® Guide isn’t necessarily as specific as other approaches. This means you’ll need to decide which tasks to complete in each phase. 

Who should use it: The PMBOK® Guide can be used on its own for small teams on standard projects, though it’s a good idea to pair it with a more detailed methodology (like CPM) for large teams handling complex projects. 

12. Extreme programming (XP)

What it is: As the name suggests, extreme programming is used for fast-paced projects with tight deadlines. The approach works by creating short development cycles with many releases. This makes for quick turnaround times and increased productivity . 

Extreme programming has a few core values, which include simplicity, communication, feedback, respect, and courage. It also includes a specific set of XP rules which includes all phases from planning to testing. 

Who should use it: Extreme programming can be used for individual projects with tight deadlines, most commonly with small to midsize teams. Since XP is a fast-paced method, it should be used lightly in order to prevent burnout . 

Choosing the right project management methodology for your team

There is no one-size-fits-all approach when it comes to project management methodologies. Each one offers unique principles to take a development project from an initial plan to final execution. 

The main aspects to keep in mind are the size of your team and how your team prefers to work. Here are some additional tips to consider:

Your industry : Consider if you’re in an industry that changes frequently. For example, a technology company would be an industry that is ever-evolving. This will affect project consistency and should be paired with either a flexible or stagnant methodology. 

Your project focus : Consider the objectives of your projects . Do you value people over efficiency? This will help pair you with a methodology that matches a similar objective. 

The complexity of projects : Are your projects on the more complex side, or are they usually straightforward? Some methods aren’t as good as others at organizing complex tasks, such a CCPM.

The specialization of roles : Consider how niche the roles within your team are. Can multiple team members alternate the same type of work, or do you need a method that focuses on specialization?

Your organization’s size : The size of your organization and team should be weighed heavily when deciding on a methodology. Methods like Kanban are universal for team size, while options like CPM are better suited for small teams. 

Whether your team members prefer a visual process like Kanban or a more traditional project management approach like the waterfall method, there’s an option for every type of team. To take a project management methodology one step further, consider a work management tool to better track and execute development projects. 

Methods to manage your projects mindfully

With the right project management methodology in place, you’ll be able to take your projects to new levels of efficiency and implement processes that are right for your team, your organization, and yourself.

Related resources

Critical path method: How to use CPM for project management

15 project management interview questions, answers, and tips

Unmanaged business goals don’t work. Here’s what does.

How Asana uses work management to drive product development

Want to create or adapt books like this? Learn more about how Pressbooks supports open publishing practices.

1 Project management methodologies: overview and definitions

Learning Outcomes

• Assess what constitutes project management methodologies.
• Determine the importance of methodologies in project management.
• Contextualise the various types of methodologies.

What exactly are methodologies in project management?

Methodologies for project management are a series of distinct processes that have been developed to offer assistance to project managers and team members. There are various definitions of a project management methodology but they all have the same grounding: it is a set of procedures, concepts, and regulations for managing a project to a successful end.

We would like to define it as: a collection of guiding principles and procedures for managing a project .

Project management methodologies describe the way we operate and communicate while managing projects. Methodologies are collections of guiding ideas and procedures that can be used to plan, manage, and execute projects. These methods of managing work are focused entirely on determining the most effective way to begin, plan, and carry out tasks. However, as a project manager, remember that your choice of approach for managing projects will impact how work is prioritised and how it is carried out.

When it comes to project management, using these methodologies serves 2 purposes: first, it expedites the completion of the duties associated with the project, and second, it provides solutions for dealing with problems as they appear. In addressing these two main purposes, the methodologies also guide the team through the entire project and provide them with steps to take and goals to work towards, while aiming to achieve the successful completion of the project.

Why use a project management methodology?

One of the most important objectives of a methodology is to standardise, structure, and organise the many methods within which the work is performed. This helps us to integrate all initiatives in the same way while offering us the capacity to reproduce successful components of the project. Well-adopted methodologies will also help us to learn from our previous errors, and ultimately lead us into a process of continuous improvement. Therefore, using a methodology can be a very helpful tool for developing project efficiency.

• Using a methodology in project management offers the opportunity for project managers to:
• better organise project life cycles
• adopt specific tools that allow for a precise time and cost estimation
• oversee and mitigate risks associated with the project
• improve the cost-benefit analysis of the project resources in a pragmatic way
• develop the team capabilities and competencies

In terms of resources, a methodology may help to speed up the learning curve of the project team, as it provides a well-established framework and structure for executing the project. When it is used in complex projects, methodologies can be adjusted and updated to be more in line with the individual working style of the team members as well as the strategic direction of the organisation. If a project manager selects a methodology that is acceptable and standardised, it is quite possible to improve the work performance while simultaneously lowering the need for extra resources to accommodate any changes triggered by the complexities of the project.

There is no doubt that the project team benefits from having access to a set of standards – a methodology that assists them to initiate and manage specific projects to a successful closure. Consequently, an effective methodology should have clear and transparent definitions, guidelines, and sample processes for the numerous project management activities that must be accomplished to execute successful projects. A project management methodology establishes a common basis for all the organisation’s activities. But most importantly, it establishes the grounds for success.

Project management methodologies offer the perfect planning framework to support the project throughout its life cycle. However, before attempting to implement a certain methodology style, it is necessary to have a thorough understanding of its benefits. Different project types require different management approaches. As a project manager, if you do not have a complete understanding of the benefits, you will be unable to maximise these effectively. Every methodology can be thought of as a reference framework, some of which are better suited to specific circumstances than others. Having the right methodology is critical. The right methodology adoption and implementation will assist project managers to lower or mitigate potential risks, prevent unnecessary duplication of tasks and activities, and eventually boost the overall outcome of the project. A methodology is a form of control mechanism that will enable and potentially ensure that the project closure is reached in the most efficient and effective way. Organisations that use a methodology in a disciplined, well-managed, and consistent manner will gain a competitive advantage and achieve consistent project success.

Figure 1. Project management methodologies support areas, by Carmen Reaiche and Samantha Papavasiliou, licensed under CC BY (Attribution) 4.0

Some of the benefits of having a project management methodology are shown above in Figure 1. But there are five significant advantages to using a project management methodology that we would like to focus on.

Advantage 1: Communication flow

When the project team members adhere to the same method, the communication channels and inclusive language become standardised. Because organisations often have many projects going at once, communication might become quite challenging. Having clear communication channels enables interaction and integration between various projects managers, allows team members and stakeholders to integrate their views, and helps sponsors to make decisions that are consistently sound and based on accessible information. Organisations should prioritise communication as an important goal and having a good methodology can support this goal.

Advantage 2: Control management

When project managers implement and run the right methodology, they are better equipped to monitor how the project and their management initiatives are progressing. A methodology provides a control system that enables project managers to monitor what is working well and what isn’t and determine whether objectives are meeting their maximum potential.

Methodologies are control management systems. When applied correctly, these systems act as governance tools that can guarantee that everything that is going on in the project life cycle can be easily identified, and that governance decisions are transparent and on time. In fact, project governance and monitoring make up a considerable portion of the components that comprise a project management methodology. They pave the way for project activities to progress in a manner that is not only organised but also easy to comprehend and communicate.

Advantage 3: Global competence

Tendering can be a complex process and in the globalised arena in which we live today it can be especially challenging for businesses to win contractual projects. The tendering process asks an organisation to respond to a formal request for the supply of goods, services and/or projects. Adhering to a consistent process can help an organisation win external contracts. In project management, there are a lot of bids that demand the use of specific methodologies. For example, in the engineering field there are many bids that list PRINCE2 as a prerequisite. In the public sector, tendering will require the application of Agile tools. Even if your role as project manager doesn’t require you to be involved in tendering or to participate in the bidding process of a contractual project, adopting a methodology (of any kind) is an essential component of good project management. It serves as a safeguard against everything that could possibly go wrong with projects and helps us to get back on track.

Advantage 4: Providing support during uncertain times

Methodologies can also assist project managers with overcoming the unknowns and uncertainties that are an inherent part of project management. With the support of procedures such as end-of-phase and gate reviews, it is possible for projects to transition from one stage to the next in a controlled and effective way. Without the proper control tools and methodology, many project managers would find it difficult to manage a project and access the information they need.

According to the literature (see, for example, Betts and Landsley 1995; Charvat 2003; Bondarenko 2017), the methodology capability of assisting with organising and structuring information is one of the main reasons why methodologies are important, particularly to project managers new to the trade. They provide supportive mechanisms that ensure that a project manager sticks to all the set protocols, follows the relevant processes, and obtains the required authorisations when required. These mechanisms are particularly useful and relevant in the face of uncertain events, ensuring that project managers do all the required tasks at the appropriate times. If project managers don’t have access to a set structure or guide, or lack instructions that might assist them, then they may be forced to access more management support to avoid managing their projects to failure.

Advantage 5: Mapping processes to success

Project managers with any level of expertise may benefit from methodologies that display a degree of flexibility as they provide the required level of support to aid efficiency and facilitate the project manager’s work. Methodologies can be very regimented, which means that they do not provide a great deal of room for deviations. To some project managers, this could be a disadvantage as it can restrict creativity. However, a well-structured methodology is more likely to guarantee successful project completion. Distinctions between the steps of the process can enable users to divide tasks more quickly and minimise errors that would otherwise be impossible to manage. Because of a methodology’s rigidity, project managers are required to pay meticulous attention to each stage, which in turn results in an automatically improved, controlled approach to the final outcome of the project.

Disadvantages

From a practitioner’s perspective we could extend the list of advantages presented above; however, it is also important to highlight some of the disadvantages that are prevalent when a project management methodology is adopted. The advantages of having a methodology are very encouraging, but there is some research that suggests that methodologies provide no value to projects (see, for example, Bondarenko et al. 2018; Perrin 2018). The lack of value is seen in scenarios where project managers are experts in the field of the project, have extensive expertise in managing complex large projects, and have a clear understanding of the organisation’s strategy. Methodologies have been proven to be effective in situations where they replace and/or complement project managers who lack the necessary expertise and skills, and this has generated a misconception that it is the only value they bring to projects. However, we should acknowledge that, when it comes to mid-level, experienced project managers who have an average amount of experience and accountability, there is also a point in the middle of managing a project, where the benefits of using a methodology begin to diminish.

Another disadvantage that we have seen is the disconnection that sometimes exists between what project managers believe to be of value for the project and what the organisation believes to be beneficial on a strategic level. Therefore, it is critical to establish a good communication system between all stakeholders and have everyone on the same level of understanding when implementing a methodology.

Methods aren’t flawless, but they do offer a lot of benefits to the individual project manager as well as the organisation. There are many different routes that can be taken to successfully implement a methodology and complete a project. The best and most popular approaches, strategies, and frameworks are always evolving so we cannot suggest a single example for you to adopt. Behind any successfully completed project is a plethora of different strategies, methodologies, and procedures. In fact, you will most likely have the opportunity to make use of more than one of them during your project management career.

In this book, we will discuss some of the key methodologies, as well as specific components of these methodologies, that you may apply in practice in order to successfully deliver projects to completion. Table 1 lists some of these key project management methodologies and provides a brief explanation of the techniques that will be covered in the next modules.

Table 1. Project management methodologies groups, by Carmen Reaiche and Samantha Papavasiliou, licensed under CC BY (Attribution) 4.0

In sum, the various methodologies, strategies, and frameworks available to project managers are also useful to others. Figure 2 below shows a few guidelines for adopting a new methodology, but keep in mind that there is no one-size-fits-all framework. As discussed earlier, the whole team working on the project will benefit from these as they will need a tool to help them gain a solid grasp of the project objectives and maximise the project’s and organisation’s resources. The right methodology will help the team achieve these. Irrespective of the methodology option you select, the processes embedded under each methodology will ensure that the rest of the project requirements and procedures are carried out without a glitch. Keep in mind that there is no such thing as a standard organisation strategy, typical project or team members – each of these are unique to the environment in which they and the project operates and resides. Therefore, each methodology must be understood and applied accordingly. Keep in mind that it is also possible that you will not find success using a methodology or an approach that has been successful for someone else. Because of this, we highly recommend that you try multiple methodologies and forecast in which way you might use these effectively for each of your unique projects.

Figure 2. A project management methodology roadmap adoption, by Carmen Reaiche and Samantha Papavasiliou, licensed under CC BY (Attribution) 4.0

Test your knowledge

Key Takeaways

• As a project manager, aim to establish a productive culture for project management which will enable you and your team to employ a project management methodology in an efficient manner.
• Enhance the abilities of your project team members and provide them with a comprehensive understanding as well as a stable basis so that they may effectively manage their projects.
• A methodology should facilitate the clarification of goals and the scope of the project by integrating the organisation’s strategy and best practices of all project management group processes.

Betts M and Lansley P (1995) ‘ International Journal of Project Management : a review of the first ten years’, International Journal of Project Management , 13(4):207–217.

Bondarenko S (2017) ‘Synergetic management as a management technology of enterprise innovative development’, Journal of Applied Management and Investments , 6(4): 223–230.

Bondarenko S, Lagodienko V, Sedikova I and Kalaman O (2018) ‘Application of project analysis software in project management in the pre-investment phase’, Journal of Mechanical Engineering and Technology , 9(13):676–684.

Charvat J (2003) Project management methodologies: selecting, implementing and supporting methodologies and processes for projects , John Wiley & Sons.

Perrin JM (2018) ‘The best-laid plans of mice and men often go awry: the disadvantages of project management’,  Project Management in the Library Workplace  ( Advances in Library Administration and Organization, Vol. 38 ), Emerald Publishing Limited, Bingley, 71–88.

Management Methods for Complex Projects Copyright © 2022 by Carmen Reaiche and Samantha Papavasiliou is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

• Project Management Metrics
• Project Portfolio Management
• Proof of Concept Templates
• Punch List Templates
• Requirements Traceability Matrix
• Resource Scheduling
• Roles and Responsibilities Template
• Stakeholder Mapping
• Team Charter
• What is Project Baseline
• Work Log Templates
• Workback Schedule
• Workload Management
• Work Breakdown Structures
• Agile Team Structure
• Cross-Functional Flowcharts
• Creating Project Charters
• Guide to Team Communication
• How to Prioritize Tasks
• Mastering RAID Logs
• Overcoming Analysis Paralysis
• Understanding RACI Model
• Eisenhower Matrix Guide
• Guide to Multi Project Management
• Procure-to-Pay Best Practices
• Procurement Management Plan Template to Boost Project Success
• Project Execution and Change Management
• Project Plan and Schedule Templates
• Resource Planning Templates for Smooth Project Execution
• Risk Management and Quality Management Plan Templates
• Risk Management in Software Engineering
• Stage Gate Process
• Stakeholder Management Planning
• Understanding the S-Curve
• Visualizing Your To-Do List
• 30-60-90 Day Plan
• Work Plan Template
• Weekly Planner Template
• Task Analysis Examples
• Cross-Functional Flowcharts for Planning
• Inventory Management Tecniques
• Inventory Templates
• Six Sigma DMAIC Method
• Visual Process Improvement
• Value Stream Mapping
• Creating a Workflow
• Fibonacci Scale Template
• Supply Chain Diagram
• Kaizen Method
• Procurement Process Flow Chart
• UML Activity Diagrams
• Class Diagrams & their Relationships
• Visualize flowcharts for software
• Wire-Frame Benefits
• Applications of UML
• Selecting UML Diagrams
• Create Sequence Diagrams Online
• Activity Diagram Tool
• Archimate Tool
• Class Diagram Tool
• Graphic Organizers
• Social Work Assessment Tools
• Using KWL Charts to Boost Learning
• Editable Timeline Templates
• Guides & Best Practices
• Kinship Diagram Guide
• Graphic Organizers for Teachers & Students
• Visual Documentation Techniques
• Visual Tool for Visual Documentation
• Visualizing a Dichotomous Key
• 5 W's Chart
• Circular Flow Diagram Maker
• Cladogram Maker
• Comic Strip Maker
• Course Design Template
• AI Buyer Persona
• AI Data Visualization
• AI Diagrams
• AI Project Management
• AI SWOT Analysis
• Best AI Templates
• Brainstorming AI
• Pros & Cons of AI
• AI for Business Strategy
• Using AI for Business Plan
• AI for HR Teams
• BPMN Symbols
• BPMN vs UML
• Business Process Analysis
• Business Process Modeling
• Capacity Planning Guide
• Case Management Process
• How to Avoid Bottlenecks in Processes
• Innovation Management Process
• Project vs Process
• Solve Customer Problems
• Streamline Purchase Order Process
• What is BPMN
• Approval Process
• Employee Exit Process
• Iterative Process
• Process Documentation
• Process Improvement Ideas
• Risk Assessment Process
• Tiger Teams
• Work Instruction Templates
• Workflow Vs. Process
• Process Mapping
• Business Process Reengineering
• Meddic Sales Process
• SIPOC Diagram
• What is Business Process Management
• Process Mapping Software
• Business Analysis Tool
• Business Capability Map
• Decision Making Tools and Techniques
• Operating Model Canvas
• Mobile App Planning
• Product Development Guide
• Product Roadmap
• Timeline Diagrams
• Visualize User Flow
• Sequence Diagrams
• Flowchart Maker
• Online Class Diagram Tool
• Organizational Chart Maker
• Mind Map Maker
• Retro Software
• Agile Project Charter
• Critical Path Software
• Brainstorming Guide
• Brainstorming Tools
• Visual Tools for Brainstorming
• Brainstorming Content Ideas
• Brainstorming in Business
• Brainstorming Questions
• Brainstorming Rules
• Brainstorming Techniques
• Brainstorming Workshop
• Design Thinking and Brainstorming
• Divergent vs Convergent Thinking
• Group Brainstorming Strategies
• Group Creativity
• How to Make Virtual Brainstorming Fun and Effective
• Ideation Techniques
• Improving Brainstorming
• Marketing Brainstorming
• Rapid Brainstorming
• Reverse Brainstorming Challenges
• Reverse vs. Traditional Brainstorming
• What Comes After Brainstorming
• Spider Diagram Guide
• 5 Whys Template
• Assumption Grid Template
• Brainstorming Templates
• Brainwriting Template
• Innovation Techniques
• 50 Business Diagrams
• Business Model Canvas
• Change Control Process
• Change Management Process
• NOISE Analysis
• Profit & Loss Templates
• Scenario Planning
• Winning Brand Strategy
• Work Management Systems
• Developing Action Plans
• How to Write a Memo
• Improve Productivity & Efficiency
• Mastering Task Batching
• Monthly Budget Templates
• Top Down Vs. Bottom Up
• Weekly Schedule Templates
• Kaizen Principles
• Opportunity Mapping
• Strategic-Goals
• Strategy Mapping
• T Chart Guide
• Business Continuity Plan
• Developing Your MVP
• Incident Management
• Needs Assessment Process
• Product Development From Ideation to Launch
• Visualizing Competitive Landscape
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• Graphic Organizer Creator
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• Bowman's Strategy Clock Template
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• Retrospective Guide
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• Business Plan Presentation
• Post-Mortem Meetings
• Team Building Activities
• WBS Templates
• Online Whiteboard Tool
• Communications Plan Template
• Idea Board Online
• Meeting Minutes Template
• Genograms in Social Work Practice
• How to Conduct a Genogram Interview
• How to Make a Genogram
• Genogram Questions
• Genograms in Client Counseling
• Understanding Ecomaps
• Visual Research Data Analysis Methods
• House of Quality Template
• Customer Problem Statement Template
• Competitive Analysis Template
• Creating Operations Manual
• Knowledge Base
• Folder Structure Diagram
• Online Checklist Maker
• Lean Canvas Template
• Instructional Design Examples
• Genogram Maker
• Work From Home Guide
• Strategic Planning
• Employee Engagement Action Plan
• Huddle Board
• One-on-One Meeting Template
• Story Map Graphic Organizers
• Introduction to Your Workspace
• Managing Workspaces and Folders
• Adding Text
• Collaborative Content Management
• Creating and Editing Tables
• Adding Notes
• Introduction to Diagramming
• Using Shapes
• Using Freehand Tool
• Adding Images to the Canvas
• Accessing the Contextual Toolbar
• Using Connectors
• Working with Tables
• Working with Templates
• Working with Frames
• Using Notes
• Access Controls
• Exporting a Workspace
• Real-Time Collaboration
• Notifications
• Meet Creately VIZ
• Unleashing the Power of Collaborative Brainstorming
• Uncovering the potential of Retros for all teams
• Collaborative Apps in Microsoft Teams
• Hiring a Great Fit for Your Team
• Project Management Made Easy
• Cross-Corporate Information Radiators
• Creately 4.0 - Product Walkthrough
• What's New

Project Management Methodologies and Frameworks Every Project Manager Should Know

You might find yourself drowning in information, tools, and processes as a project manager. To stay afloat and thrive, you must choose the right project management methodologies and frameworks that suit your team and project needs.

Many different project management methodologies are available and deciding which one is right for you can be challenging. This article provides an overview of the most popular frameworks to get you started.

What is a Project Management Methodology?

A project management methodology is a set of principles, processes, guidelines, and tools that help to plan, manage, and control a project. The methodology helps to ensure that a project is on schedule, within budget, and that the project goals are met.

A project team or an organization uses a management framework to execute a project. The information generated is usually documented and shared with others. Recording the information is essential as it will help others understand the project requirements and responsibilities.

While most project management methodologies take a standardized approach, some are for specific purposes, i.e., manufacturing or software development.

Project Management Framework vs. Methodology

The terms framework and methodology are often used interchangeably in project management. However, there is a slight yet distinguishable difference between the two approaches.

A framework provides more flexibility and freedom. You can adopt new rules and change or remove existing ones as necessary. As such, a framework provides the structure and direction needed for a project without being too rigid or detailed.

On the other hand, a methodology is a set of principles and processes that guides the management of a project. It is a formal approach that is strictly defined and generally adheres to a strict code complete with steps and rules.

Another way to understand the two approaches is that most of the time, methodologies are for implementing ideas and values, while a framework provides a step-by-step guide to attain that idea or manage that project.

Project Life Cycle Processes

A project management framework includes the whole project management life cycle, which will guide you from the beginning to the end. In a project management life cycle , there are five steps:

• Initiation : The beginning stage of the project, where the main focus is to narrow down the required key components to kickstart the project. Teams get together to research, brainstorm and conduct analysis and stakeholder mapping/interviews to gather information.
• Planning : Here, the teams and members working on the project are identified along with activities, milestones, risks, management structure, and success benchmarks.
• Execution : During this stage, the project kickstarts and is implemented.
• Management/Monitoring : At each milestone, the progress will be monitored, documented, and reported. Key progress and outputs will be shared with stakeholders as well.
• Review/Closing : This stage marks the end of the project. Project leaders and team members will review and analyze how the project progressed and setbacks to identify future improvements. Updates or replacements will be scheduled if necessary before wrapping up.

5 Key Project Management Methodologies and Frameworks

1. waterfall framework.

The Waterfall Framework is a linear approach that first gathers stakeholder and customer requirements before creating a sequential project plan to address the identified requirements. Consisting of five main stages, each stage is completed before progressing to the next–similar to a cascading waterfall.

The main stages of the waterfall framework are:

• Requirements : needs and requirements of the business/project are identified, analyzed, and documented.
• Design : possible solutions are explored before a detailed plan is made to achieve the goals.
• Implementation : the project plan and activities are set in motion along with progress measurements.
• Verification/Control : the product is reviewed, and the project plan is compared with the performance to address issues.
• Maintenance/Closure : the end result is shared with clients for feedback and final fixes. Approval is obtained before the project is closed.
• As project and client requirements are identified and agreed in the very first stage, it sets clear client expectations that are easier to plan.
• Extensive documentation ensures that each activity and task is well documented and that no knowledge is lost.
• The project schedule is laid out at the beginning stages. As such, project costs, deadlines, and other resources can be estimated accurately.
• Easier to measure and understand as you progress through each milestone one after the other.

Disadvantages

• Identifying all client/customer requirements at the very beginning is difficult.
• Changes to the product at the end stages are costly and difficult if the customer is unsatisfied.
• Lack of flexibility due to the linear nature of the framework, which provides minimal room for change and adaptation in case of unexpected events.

2. Lean Methodology

Lean methodology originated in the 1950s in Toyota and currently focuses on eliminating waste, maximizing value, and improving efficiencies. Many organizations have opted to adopt the Lean Framework as it can be applied to any business, regardless of size, to achieve objectives in a sustainable manner.

The two main guiding concepts in Lean are respect for people and continuous improvement. Accordingly, necessary training and tools are provided, constant improvement is encouraged, and management takes on a more active role in understanding and meeting the needs of employees to initiate better work performance.

Besides the above two concepts, lean has five core principles that support the methodology:

• Value : customer defines the value of the product offered.
• Value stream : a clear and in-depth understanding of the product’s life cycle from research to development. Each step of the value chain is analyzed to identify waste areas and improvements.
• Flow : every process should be in sync with one another, and the value stream should flow seamlessly.
• Pull : ensures that products are made only when required, leading to shorter delivery cycles and increased flexibility.
• Perfection : always strive for perfection by uncovering quality or waste issues and applying strict measures to address inefficiencies.
• The quality of products is high due to the constant attention to value.
• Reduced costs and increased profits as Lean focuses on providing value and minimizing waste.
• Improved customer relations as the focus is to deliver what the customer requires.
• Regular communications among employees, stakeholders and management pave the way for better decision-making.
• Emphasis on constant improvement leads to continuous learning opportunities.
• Organizations may focus too much on Lean principles that they lose sight of the bigger picture leading to a lack of strategy.
• If there are bottlenecks or resource issues, delivery can be delayed leading to unsatisfied customers.

3. Agile Methodology

Agile is often used in the software industry, though it has spilled into others recently due to its adaptability. It is an iterative approach that promotes collaboration among team members, emphasizing adaptive planning and early delivery of functional products. In an Agile project, development work is carried out in short-term periods called sprints, and the management focuses on continuous improvement throughout the project’s life cycle.

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Popular frameowkrs such as Scrum and Kanban stem from Agile, which acts as an umbrella term that encompasses several different frameworks. To learn more about Scrum and Kanban, check out The Ultimate Beginner’s Guide to Scrum and How to Better Manage Your Projects with Kanban Boards .

The Agile Manifesto highlights four core principles that are the building blocks of any agile approach. They are:

• Individuals and interactions over processes and tools
• Working software over comprehensive documentation
• Customer collaboration over contract negotiation
• Responding to change over following a plan
• Agile promotes smaller teams, making it easier to keep up the pace and quickly adapt to necessary changes, leading to faster response times and ample flexibility.
• Faster turnaround times due to the ability to quickly detect and provide solutions to issues.
• Low wastage and costs as tasks are always up-to-date with constant feedback and follow-ups, allowing developers to experiment and test ideas.
• Agile is practiced by many and has a considerable following. Therefore, you can always reach out for help and share knowledge with others if you run into trouble.
• Difficult to measure the progress as it is estimated across several cycles, which may take time.
• Documentation is not given prominence, leading to misunderstandings and difficulty for newer members to be up-to-date.
• At times, there is no clear end date; therefore, the overall project may seem to go on forever. This can also lead to scope changes beyond what was initially agreed (scope creep).
• Due to the short cycle times, the design thinking process may be stinted, leading to a lack of cohesion and fragmentation.
• Teams may tend to avoid key features that may take too long to deliver.
• The need for constant communication can take a toll on team members who have to spend extra energy and time.

4. Critical Chain Project Management Framework

Critical Chain Project Management (CCPM) is a project management framework that helps the planning and managing of projects by monitoring the resources required to execute the project tasks. The framework helps project managers to deliver projects in a cost-effective and timely manner.

Buffers are safety margins that ensure all tasks are completed within schedule. CCPM identifies strategic points in the project and inserts buffers to ensure that project milestones are met on time, regardless of constraints or uncertainties. There are several types of buffers used in CCPM.

• Project buffers : this is positioned between the completion date of the project and the last task allowing team members to catch up on any outstanding tasks or delays.
• Feeding buffers : this is positioned between the non-critical chain and the critical chain to prevent delays.
• Resource buffers : resources that are kept aside in case of extra support in terms of resources are required.
• Team members tend to be more efficient and pace themselves rather than working more as the deadline approaches.
• Work is scheduled around resource availability, thereby optimizing resource utilization.
• The insertion of various buffers to address issues on time.
• The minimum time required to finish the project is taken into consideration.
• Major planning packages do not often support the framework.
• If the team does not understand the endpoint, many losses and setbacks could occur.

5. PRINCE2 Framework

PRINCE stands for “PRojects IN Controlled Environments” and is a process-based framework focused on organization and control. The framework started as PRINCE with a particular focus on the IT industry before expanding into others.

PRINCE2 details what each step of the project should look like, deliverables, roles, and responsibilities, and also structure each stage of the project with no loose ends at the point of completion.

• PRINCE2 is a good beginner framework to start project management as it has a defined process with clear steps.
• Due to the detailed and step-by-step guide provided, PRINCE2 is relatively easy to understand and follow. Furthermore, the ability to divide the project into manageable stages is helpful in managing the project.
• PRINCE2 is flexible in nature and can be easily adapted to suit different projects.
• Roles and responsibilities are clearly defined, which improves accountability.
• Lessons learned can be tracked and updated for future reference and improvements.
• PRINCE2 is not ideal for projects in fast-changing environments (i.e., technology-driven) due to the extensive documentation required.
• Requires the buy-in of the senior management for success.
• Requires experience to be managed and delivered successfully.

Key Steps to Follow when Selecting a Methodology or Framework

1. assess the project in terms of size and scope.

Size and scope play a significant role when selecting a suitable project methodology or framework. Some projects may be small, requiring a team of no more than 3-4 people and a short period. In contrast, others would be large, with multiple teams working together for several years.

Larger projects with several cross-functional teams and extended time frames would benefit from adaptive project management frameworks such as agile. In comparison, smaller projects that are less complex would do well with methodologies such as waterfall.

2. Look into the available project management methodologies and frameworks

Once the project scope and size are determined, look into the available methodologies and frameworks. Compare notes, and weigh the pros and cons as to which one would suit your requirements the best while minimizing risks.

3. Obtaining the acceptance and buy-in of your team

Reach out to your team to see their reaction and input. Make sure you listen to their viewpoints and present your side accordingly to obtain their buy-in. Otherwise, conflicts and challenges may hinder the project’s smooth progress.

4. Confirm the selection

Before starting the project, re-confirm the feasibility of your selection by comparing and assessing the success rate of projects delivered using the same framework.

5. Obtain feedback and conduct self-assessments

As the project progresses, ask for feedback from your colleagues regarding the processes followed. Furthermore, make sure to conduct self-assessments to see if the methodology or framework is proceeding according to your expectations and whether it allows you to manage your team successfully.

Tools and Techniques for Project Management Methodologies and Frameworks

There are several tools and techniques relevant to project management methodologies and frameworks. While some specific tools and techniques are similar across multiple frameworks, there are some that may differ. Below are a few commonly used tools and techniques.

Work Breakdown Structure (WBS)

Work breakdown structures can be used to break down the larger deliverables of your project into manageable smaller tasks. This is a productivity technique that uses a step-by-step approach to project management.

Gantt Chart

Gantt charts are ideal for tracking tasks' start and end dates and milestones. It helps teams to plan their work and jobs to meet deadlines and allocate resources accordingly.

SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. For each project, the SWOT identifies the internal (Strengths and Weaknesses) and external (Opportunities and Threats) drivers affecting your ability to meet the goal. For example, suppose your organization is well known for its expertise in customer service. In that case, improving customer service will be a competitive advantage and a meaningful driver for meeting your goals.

RACI Matrix

RACI stands for responsible, accountable, consulted, and informed. RACI matrix is used to describe the roles and responsibilities of team members in a project.

Stakeholder Map

The stakeholder map is a tool to help you understand who your stakeholders are and their needs. Using this tool, you can map stakeholders according to their importance and potential impact on the project.

Decision Tree

A decision tree is used for effective decision-making and predicting potential outcomes when multiple courses of action exist. It allows the team to explore options and outcomes to understand the risks and rewards associated with each possible course of action.

Creately for Project Management

Creately has many tools to make your journey effortless and successful regardless of the type of project methodology or framework you decide to follow.

• Powerful documentation capabilities include doc blocks and attachments and image attachments to create reports and presentations.
• Built-in project management tools including Kanban boards, timelines, multi-role workflows, visual prioritization tools to enable any kind of workflow.
• Whiteboard and freehand drawing capabilities to brainstorm and discuss with colleagues and peers.
• Multiple templates and shapes to prepare project plans and schedules, Gantt charts, roadmaps, and other formats necessary for project management documentation and tracking.
• Multiple access and role levels to manage, share, edit and review, along with multiplayer editing capabilities to collaborate in real-time.
• Comment on anything, with context. Full comment threads and discussions for async collaboration.
• Data, note, and task panels to house information, assign roles and responsibilities, feed in information, and track the progress of activities.
• Integration with other platforms with 2-way syncing to manage data efficiently.
• Spotlight and presentation mode to conduct interactive and dynamic presentations right on the canvas.

Start your project management journey with Creately today!

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

More Related Articles

Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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12 Project Management Methodologies: Types, Tools, Techniques, And How to Choose

Written By : Bakkah

27 Feb 2024

Table of Content

Definition of Project Management Methodologies:

Types of project management methodologies, project management methodologies tools , project management methodologies techniques, how to choose a project management methodology, explore bakkah's leading courses to boost your skills in project management and business analysis:, popular articles.

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Project management methodologies are systematic frameworks and guidelines utilized by organizations to efficiently plan, execute, and complete projects. They offer structured approaches to project management, ensuring adherence to timelines, budgets, and objectives. These methodologies encompass diverse principles, practices, and tools designed to facilitate effective communication and coordination among project-implementing teams. 

Project management methodologies vary in their approach, with some emphasizing flexibility and adaptability (e.g., Agile) while others focus on sequential and structured processes (e.g., Waterfall). The appropriate methodology must be selected according to the type of project and its unique circumstances. The goal is to enhance project efficiency, minimize risks, and deliver high-quality results, ultimately contributing to achieving the specified goals and objectives of the project.

Project management methodologies refer to the systematic frameworks, processes, and guidelines organizations follow to plan, execute, monitor, and complete projects. These methodologies provide a structured approach to managing projects, ensuring they are completed on time, within budget, and meet the specified goals and objectives.

Project management methodologies encompass diverse principles, practices, and tools designed to facilitate effective communication and coordination among project-implementing teams.

They can vary in their approach, with some methodologies emphasizing flexibility and adaptability (e.g., Agile), while others focus on sequential and structured processes (e.g., Waterfall). The appropriate methodology must be selected according to the type of project and its unique circumstances.

The goal of Project Management Methodologies is to enhance project efficiency, minimize risks, and deliver high-quality results, ultimately contributing to achieving the specified goals and objectives of the project.

Various tools support their implementation, enhancing collaboration and communication, while diverse techniques facilitate effective project planning, execution, and control.

There are diverse project management methodologies, each with different principles, processes, and approaches. Here are some common types:

1. Waterfall Methodology

Waterfall project management is a traditional approach to project management where tasks are completed sequentially and linearly. 

The methodology is called "waterfall" because progress is seen as flowing steadily downwards through phases, like a waterfall. Each phase must be completed before moving on to the next one, and changes to the project are generally not allowed once a phase is closed.

Here are the main phases in the waterfall project management methodology:

• Requirements: Define project scope, objectives, and deliverables.
• Design: Create a detailed plan for how the solution meets requirements.
• Implementation (or Construction): Include coding or construction of the project.
• Testing: Ensure the project meets specified requirements through various testing phases.
• Deployment (or Implementation): Implement the project in the production environment after the success of testing.
• Maintenance and Support: Address issues and user concerns and make updates as needed.

The waterfall methodology is best suited for projects where the requirements are well-understood and unlikely to change significantly during the development process.

It is often used in industries like construction and manufacturing. However, one of its main drawbacks is its inflexibility to adapt to changes once the project has started, as it does not easily accommodate changes in requirements.

2. Agile Methodology

Agile methodology is an iterative and flexible approach to project management that focuses on collaboration, adaptability, and customer satisfaction.

Unlike the linear nature of the waterfall model, agile divides a project into small increments with minimal planning and delivers functional pieces of the project in short time frames, known as iterations or sprints.

Primary principles and practices of agile include:

• Projects are divided into small manageable iterations, delivering potentially shippable product increments.
• Collaboration and communication between team members, stakeholders, and customers are crucial for quick adaptation to changes and alignment with goals.
• Continuous customer feedback allows for adjustments based on changing requirements.
• Agile is flexible and adaptable to changes in requirements or priorities at any stage.
• Continuous delivery aims for a potentially shippable product at the end of each iteration, allowing for early and regular value delivery to the customer.
• Prioritization and timeboxing based on value and importance ensure focus and urgency in delivering value.
• Agile encourages self-organizing, cross-functional team formation that collectively possess the necessary skills to deliver a complete product.

Popular agile frameworks include Scrum, Kanban, and Extreme Programming (XP), each with specific practices and roles. 

Agile is widely used in software development and various industries for its adaptability and customer-centric approach.

3. Scrum Framework

Scrum is one of the most widely used agile frameworks for managing complex software development projects. It provides a structured yet flexible approach to product development.

Key elements of the Scrum framework include:

• Roles: Include Product Owner, Scrum Master, and Development Team.
• Artifacts: Comprise the Product Backlog, Sprint Backlog, and Increment.
• Events: Include Sprint Planning, Daily Stand-up, Sprint Review, and Sprint Retrospective.

Scrum's iterative and incremental approach, along with its emphasis on collaboration and adaptability, makes it particularly effective for projects where requirements may change or evolve during development.

4. Kanban Methodology

Kanban is a project management methodology that visualizes workflow using boards, cards, and columns. It also limits tasks that are in progress simultaneously to prevent overloading the team and ensure a steady flow of work.

Emphasizing continuous improvement, Kanban employs feedback loops and a pull system, adapting work based on demand. Service Level Agreements (SLAs) are often used in Kanban to define the expected time frames.

Known for flexibility and adaptability, Kanban suits various industries like architecture, construction, marketing, education, software development, design, and law. Kanban fosters collaboration and shared responsibility and allows incremental process improvements based on specific needs and context.

5. Lean Project Management

Lean Project Management (LPM) is an approach to project management that draws inspiration from Lean principles. The Lean philosophy focuses on minimizing waste, optimizing efficiency, and continuously improving processes.

Lean principles are applied to enhance project delivery, reduce unnecessary activities, and deliver value more effectively. 

Principal aspects of Lean Project Management methodology include eliminating waste, using value stream mapping, continuous improvement (Kaizen), customer focus, pull scheduling, visual management, batch size reduction, flexible planning, and cross-functional team use. LPM is suitable for industries like manufacturing, construction, and software development.

Its focus on efficiency and customer value makes it a valuable approach for organizations seeking to optimize their project delivery processes.

6. PRINCE2 (Projects IN Controlled Environments)

PRINCE2 (Projects IN Controlled Environments) is a widely adopted project management methodology developed by the UK government. It provides a structured and process-driven approach to project management, emphasizing flexibility and adaptability.

PRINCE2 divides projects into manageable stages, with defined roles and responsibilities, ensuring organized and controlled project execution.

The methodology consists of seven processes:

• Starting Up a Project (SU): Ensures project prerequisites are in place.
• Initiating a Project (IP): Defines project scope, objectives, and plans.
• Directing a Project (DP): Provides senior management with chief controls.
• Controlling a Stage (CS): Manages day-to-day project activities.
• Managing Product Delivery (MP): Ensures efficient product work.
• Managing a Stage Boundary (SB): Focuses on transitioning between stages.
• Closing a Project (CP): Formally closes the project and ties up loose ends.

PRINCE2 is known for its focus on continuous improvement and adaptability, making it a valuable tool for delivering successful projects within time, cost, and quality constraints.

Boost your career with Bakkah’s PRINCE2 courses:

• PRINCE2® Training Course Online
• PRINCE2® Agile Foundation & Practitioner Online Course and Certification

7. Critical Path Method (CPM)

Critical Path Method (CPM) is a project management technique that identifies the critical path of activities, potential risks, team roles, and the sequence of tasks determining the shortest project duration. Key steps:

• Task Breakdown: Identify and sequence project tasks. 
• Duration Estimation: Assign time estimates to tasks.
• Network Diagram: Create a visual representation of task dependencies.
• Critical Path Identification: Find the path critical for project completion.
• Float/Slack Calculation: Determine non-critical task flexibility.
• Resource Allocation: Efficiently allocate resources.
• Monitoring and Control: Monitor progress continuously, update schedules, and take corrective actions., update schedules, and take corrective actions.

CPM is an essential tool for effective project planning and control. It aids in prioritizing critical tasks, managing time constraints, and optimizing project schedules. CMP can be used in several projects, such as engineering, manufacturing, construction, and science.

8. Six Sigma ( Continuous Improvement Methodology)

Six Sigma is a data-driven project management methodology focused on improving process efficiency continuously and reducing defects or errors. Developed by Motorola in the 1980s, Six Sigma seeks to minimize variations and achieve higher levels of quality in processes. It is often applied in manufacturing and process improvement projects. Here is a concise overview of the Six Sigma project management methodology:

• Define (D): Clearly articulate the problem, project goals, scope, and customer requirements.
• Measure (M): Establish metrics, collect data, and measure baseline performance.
• Analyze (A): Use statistical tools to identify root causes of defects or inefficiencies.
• Improve (I): Develop and implement solutions, testing and refining as needed.
• Control (C): Establish measures to sustain improvements and prevent recurrence of defects or issues.

The Six Sigma methodology is often represented by the acronym DMAIC (Define, Measure, Analyze, Improve, Control). Additionally, for more complex or considerable process changes, there is another phase known as DMADV (Define, Measure, Analyze, Design, Verify).

Bakkah provides certification levels such as Six Sigma Green Belt and Six Sigma Black Belt are available for individuals to demonstrate proficiency in applying Six Sigma principles and methodologies. Organizations implementing Six Sigma often experience enhanced efficiency, reduced defects, and improved customer satisfaction.

9. RAD (Rapid Application Development)

Rapid Application Development (RAD) is a project development methodology that prioritizes quick iterations and prototypes over extensive planning.

It involves user participation throughout the process, parallel development of system components, and a flexible, adaptive approach. Prototyping is a key feature, allowing for continuous refinement based on user feedback. RAD aims to deliver a functional product rapidly, focusing on time and cost efficiency.

Popular RAD tools include Microsoft Visual Basic, PowerBuilder, and OutSystems. The methodology suits projects with changing requirements but may not be ideal for highly structured endeavors.

10. Incremental and Iterative Methodologies

Incremental development involves dividing the project into small increments, each delivering a part of the final product's functionality linearly. User feedback is integrated after each increment, providing ongoing adaptability and the ability to identify and correct issues early. This approach enables early delivery and reduced project risk.

On the other hand, iterative development goes through cycles or iterations, refining the entire system with each iteration. It is highly flexible and accommodates changing requirements throughout the development process.

11. Hybrid Methodologies

Hybrid methodologies in project development involve blending elements from different traditional and agile approaches to create a flexible and tailored solution. That allows teams to adapt practices based on the project's unique requirements, leveraging both structured planning and iterative development. 

In a hybrid methodology, the most appropriate elements from each methodology are identified and combined harmoniously. Examples include combining Waterfall and Scrum or integrating lean principles with agile practices.

The goal is to manage risks effectively, enhance flexibility, and address the project-specific needs. Effective communication is crucial to mitigate potential challenges introduced by diverse practices integration.

12. Extreme Programming (XP)

XP is an Agile methodology that emphasizes collaboration, adaptability, and delivering high-quality software through practices such as continuous testing and frequent releases.

Extreme Programming methodology is one of the famous methodologies for managing and developing software and other technical projects. It is based on diverse principles and practices, focusing on increasing software quality and improving team productivity.

A team needs to follow this method if the project is fast-paced or subject to regular change and thus has a dynamic rather than static nature.

The Extreme methodology also aims to achieve productive cooperation between team members and increase the quality of the final product and its flexibility in the face of changes.

Here are the main principles and practices of Extreme Programming:

• XP is built on a set of core values, including communication, simplicity, feedback, and courage.
• Developers work in pairs, one writing code and the other reviewing it in real time. That promotes collaboration, knowledge sharing, and code quality.
• Developers write tests before writing the actual code. That ensures that the code meets specifications and facilitates maintenance and updates.
• Code is integrated frequently to identify and address integration issues early in the development process.
• XP improves code design regularly without changing its functionality.
• XP keeps the design as simple as possible, making it easier to understand, modify, and maintain.
• Frequent and direct interaction with the customer allows for quick adjustments to changing requirements and priorities.
• XP emphasizes continuous improvement through regular reflection on the development process and changes in implementation to enhance efficiency and quality.

Bakkah provides a variety of accredited project management Courses for all professional certificates in project management, risk management, and others.

In brief, choosing the most suitable project management methodology depends on factors such as project size, complexity, industry, and organizational culture. Project managers often customize or combine methodologies to best fit the unique requirements of their projects.

Project management methodologies are often supported and implemented using various tools to enhance efficiency, collaboration, and communication throughout the project lifecycle. Here are some commonly used tools associated with project management methodologies:

1. Project Management Software

Tools like Microsoft Project, Asana, Jira, Trello, and Monday.com provide features for project planning, scheduling, task assignment, and progress tracking.

2. Version Control Systems

Git, SVN (Subversion), and Mercurial help manage changes to source code and documentation, ensuring version control and collaboration in software development projects.

3. Communication and Collaboration Tools

Slack, Microsoft Teams, and Discord facilitate real-time communication, file sharing, and collaboration among team members, supporting Agile and remote work environments.

4. Gantt Charts

Tools like GanttPRO and SmartDraw help create visual representations of project timelines, tasks, and dependencies, commonly used in Waterfall and traditional project management methodologies.

5. Kanban Boards

Trello, KanbanFlow, and LeanKit enable teams to visualize work and optimize workflow, particularly in Agile and Lean methodologies.

6. Scrum Tools

Jira, VersionOne, and Targetprocess support the Scrum framework with features for sprint planning, backlog management, and burndown charts.

7. Resource Management Tools

Workfront, Mavenlink, and TeamGantt assist in resource allocation, workload tracking, and managing team capacity in project management.

8. Risk Management Tools

RiskWatch, RiskyProject, and ProjectManager.com help identify, assess, and manage risks throughout the project lifecycle.

9. Collaborative Document Management

Tools like SharePoint, Google Workspace, and Dropbox Business enable teams to collaborate on documents, share project-related files, and ensure version control.

10. Continuous Integration and Deployment (CI/CD) Tools

Jenkins, Travis CI, and GitLab CI/CD automate integration code changes process and deploying software, commonly used in Agile and DevOps methodologies.

11. Time Tracking and Timesheet Tools

Harvest, Toggl, and Clockify assist in tracking project-related activities, allowing for accurate time management and resource allocation.

12. Customer Relationship Management (CRM) Tools

Salesforce, HubSpot, and Zoho CRM support customer-centric projects. That helps teams manage client interactions, feedback, and requirements.

Project managers and teams should carefully select tools that align with their chosen methodologies and project requirements. Integrating these tools can significantly improve project management efficiency and contribute to successful project outcomes.

Project management methodologies involve various techniques to plan, execute, and control projects effectively. Here are some commonly used techniques associated with project management methodologies:

1. Work Breakdown Structure (WBS)

Break a project into smaller, manageable tasks and create a hierarchical structure to define clearly the scope and deliverables.

2. PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method)

Techniques for scheduling and managing tasks by identifying critical paths and dependencies and estimating project duration.

2. SWOT Analysis

Evaluate the project's Strengths, Weaknesses, Opportunities, and Threats to make informed decisions and develop effective strategies.

3. Risk Management

Identify, assess, mitigate, and monitor risks throughout the project lifecycle to minimize potential negative impacts.

4. Stakeholder Analysis

Identify and analyze stakeholders to understand their interests, influence, and expectations and ensure effective communication and engagement.

5. PERT Charts (Program Evaluation and Review Technique)

Graphical representations of project tasks and their dependencies, helping visualize the project schedule and critical path.

6. Scrum Meetings

Daily Standups, Sprint Planning, Sprint Review, and Sprint Retrospective are regular Scrum meetings that facilitate communication and collaboration in Agile projects.

7. Earned Value Management (EVM)

Analyze project performance by measuring the planned value, earned value, and actual cost to assess progress and forecast future performance.

8. Quality Management

Implement techniques such as quality audits, inspections, and control charts to ensure project deliverables meet predefined quality standards.

9. Mind Mapping

Visualize project ideas, requirements, and tasks using mind maps to stimulate creative thinking and organize information in a structured way.

10. Critical Chain Method

Identify and manage resource dependencies to optimize project schedules and improve overall performance.

11. Prototyping

Creating a working model or prototype of a product or system to gather feedback early in the development process is common in Agile and iterative methodologies.

12. Benchmarking

Compare project performance metrics and processes against industry standards or best practices to identify areas for improvement.

13. Dependency Mapping

Identify and visualize dependencies between different tasks or project activities to understand their interrelationships and potential impacts.

14. Agile Estimation Techniques

Use techniques like Planning Poker, Relative Sizing, and Story Points to estimate the effort required for Agile project tasks.

15. Change Management

Implement strategies and techniques to manage and communicate changes effectively, ensuring minimal disruptions to project progress.

16. Communication Plans

Developing plans outlines how project information will be communicated to stakeholders, ensuring clear and consistent communication.

These techniques are often applied based on the specific requirements, characteristics, and principles of the chosen project management methodology. Project managers may tailor and combine these techniques to suit the needs of their projects.

Choosing a suitable project management methodology is crucial for the success of a project. The decision should be based on the project's characteristics, team dynamics, organizational culture, and the nature of the work to be performed. Here is a step-by-step guide on how to choose a project management methodology:

1. Understand Project Requirements

Clearly define the project scope, objectives, and deliverables. Consider the size, complexity, and nature of the project work.

2. Assess Team Skills and Experience

Evaluate the skills and experience of the project team. Consider their familiarity with different methodologies and their adaptability to new approaches.

3. Consider Project Flexibility

Assess the level of flexibility required throughout the project. Some projects may benefit from a more adaptive and iterative approach, while others may require a more structured and sequential process.

4. Examine Project Constraints

Identify any constraints such as budget limitations, time constraints, regulatory requirements, or client preferences that may influence the choice of methodology.

5. Evaluate Organizational Culture

Consider the existing organizational culture and whether it aligns with the principles of certain project management methodologies. Some organizations may prefer traditional, plan-driven approaches, while others may be more receptive to Agile or iterative methods.

6. Define Stakeholder Involvement

Determine the level of involvement and collaboration required from project stakeholders. Some methodologies, like Agile, emphasize continuous stakeholder engagement and feedback.

7. Analyze Project Risks

Evaluate the potential risks associated with the project. Some methodologies, such as Agile, are well-suited for projects with high uncertainty and evolving requirements.

8. Review Industry Standards

Consider industry standards and best practices. Certain industries or project types may have specific guidelines or regulations that align with particular methodologies.

9. Explore Hybrid Approaches

Assess the possibility of combining elements from different methodologies to create a hybrid approach tailored to the project's specific needs.

10. Pilot or Prototype

If feasible, consider running a pilot or prototype using a small-scale version of the project to test how well a methodology fits the team and project requirements.

11. Consult with Stakeholders

Seek input from key stakeholders, including team members, clients, and sponsors. Understand their preferences, expectations, and concerns regarding project management approaches.

12. Training and Transition Plan

Evaluate the readiness of the team to adopt a new methodology. Plan for necessary training and establish a transition plan to smoothly implement the chosen methodology.

13. Continuous Improvement

Be open to evaluating and adjusting the chosen methodology throughout the project. Continuous improvement is essential to address evolving project needs and improve overall project management processes.

Elevate your project management skills with Bakkah Learning's expert-led courses. From PMP to Prince2, Six Sigma to Agile, we offer tailored programs to suit your career goals. With interactive learning, flexible access, and certification preparation, we're your partner for professional growth. Start your journey to mastery today with Bakkah Learning!

Here are some Project Management Courses :

• Certified Associate in Project Management CAPM Course
• PMI-ACP® certification
• PgMP certification
• PMI Scheduling Professional - PMI-SP certification

Risk Management Courses And Certifications:

• Risk Management Professional - PMI-RMP Course
• MoR Certification and course

PRINCE2 Courses

• PRINCE2 Certification
• PRINCE2 Agile.

Project Management Tools:

• Primavera P6 Course
• MSP Course - Managing Successful Programmes
• Microsoft Project training course  

Portfolio Management

• P3O Foundation certification
• Management of Portfolios MoP
• The Portfolio Management Professional – PfMP certificate
• Lean Six Sigma Yellow Belt Course
• Lean Six Sigma Green Belt Course
• Lean Six Sigma Black Belt Course

Ultimately, the choice of a project management methodology should be a thoughtful and informed decision that aligns with the unique characteristics of the project and the organization. Regularly reassess the chosen methodology to ensure its continued effectiveness and make adjustments as needed.

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What is Project Management Methodologies?

Methodologies contain guiding processes for those who are doing project management . The true definition is that methodologies are not tool specific, however in today's software-reliant world the reality is that the methodology and the organization's project management software tool are often heavily intertwined.

Why Project Management Methodologies?

Project management plays a crucial role in accomplishing goals and following through with plans and expectations. However, getting your team organized around a project is often easier said than done. Following a project management methodology can help you organize your project into a structured, streamlined process. It makes team collaboration more efficient and projects become better organized.

But not every project management methodology will work for every type of projects. In order to recognize which method will work best for your project, you need to be familiar with these common project methodologies and their differences.

Introduction of Project Management Methodologies

While there are dozens of project management methods available, an appropriate project management methods can help you team to manage your project much more efficiently. A business can vary according to type, size, industry, and many other factors. Rather than looking for a methodology that is best, businesses should learn these methodologies, how they are used, and how they can be applied.

Let's go through the widely used methods below briefly:

Agile Methodologies were originating resulted from the use of the waterfall model were seen as bureaucratic, inflexible, slow, and inconsistent with the ways that software developers actually perform effective work. Agile method is people-focused and commnuication-oriented, flexible (ready to adapt to expected change at any time), speedy (encourage rapid and iterative development of the product in small releases), lean (focuses on shortening timeframe and cost and on improved quality), responsive (reacts appropriately to expected and unexpected changes), and learning (focuses on improvement during and after product development)

Agile processes generally encourages frequent inspection and adaptation, a leadership philosophy that encourages teamwork, self-organization and accountability, a set of engineering best practices intended to allow for rapid delivery of high-quality software, and a business approach that aligns development with customer needs and company goals. The Agile method tries to provide rapid, continuous delivery of product to the customer. Whereas traditional methodologies such as the Waterfall method or other linear processes require detailed upfront requirements defined in the initial stage of a project.

Waterfall methodology is the one that is the most used across all industries, and it is very common in software development and construction. The waterfall model is a sequential (non-iterative) design process, used in software development processes, in which progress is seen as flowing steadily downwards (like a waterfall) through the phases of conception, initiation, analysis, design, construction, testing, production/implementation and maintenance. There are many versions of the waterfall method, but the original one included these high-level phases:

• Requirements specification
• Construction (coding)
• Integration
• Testing and debugging (Validation)
• Installation
• Maintenance

Adaptive project management does exactly what the title suggests: it adapts. With adaptive project management the scope of a given project can vary. While the time needed to complete the project and the cost of the project are constants, the project scope can be adjusted as it is being executed. Businesses commonly do this to get maximum value out of each project, such as when new ideas or opportunities are unlocked during the development of a project.

Scrum is an agile framework for completing complex projects. Scrum originally was formalized for software development projects, but it works well for any complex, innovative scope of work. The possibilities are endless. The Scrum framework is deceptively simple.

The Scrum tries to deal with the fact that the requirements are likely to change quickly or are not completely known at the start of the project. The low-level requirements are only defined at the time when they are going to be really implemented. In Scrum, changes and optimizations of product, requirements and processes are an integral part of the whole engineering cycle. Thus, scrum development process is a type of agile methodology that focuses around short sprints cycle and monthly scrum sessions where project deliverables are broken down into 2 to 4 weeks intervals.

Scrum is applicable only in certain types of environments - mainly those with co-located, 100% dedicated team members (not easily working well with multiple projects), with dedicate support for the project team members.

RAD (rapid applications development)

Rapid application development (RAD) describes a method of software development which heavily emphasizes rapid prototyping and iterative delivery. It was born out of frustration with the waterfall approach which often resulted in products that had already out of date by the time they were actually released. RAD is a type of incremental model, which the components or functions are developed in parallel as mini projects. The developments are time boxed, delivered and then assembled into a working prototype. This can quickly give the customer something to see and use and to provide feedback regarding the delivery and their requirements.

PMBOK ® is not exactly a methodology but rather a broad collection of good practices for project management, which has been rapidly grown and spread around the world, and is now seen globally as a recognized and strategic competency, a career path and a subject for training and education. PMBOK is short for Project Management Body of Knowledge. The PMBOK framework consists of five process groups, ten knowledge areas and 47 project management processes. The knowledge areas group the PM processes by project management content.

The PMBOK is the broadest and most widely used standard reference of industry best practices for PM. It sets out good practices and guidelines that are applicable to a wide range of industries and markets and cross multiple departments, from IT to production. Different industries can leverage different aspects of the PMBOK to suit their specific needs.

Process groups

The five process groups are:

• Initiating: processes performed to define a new project or a new phase of an existing project by obtaining authorization to start the project or phase.
• Planning: Those processes required to establish the scope of the project, refine the objectives, and define the course of action required to attain the objectives that the project was undertaken to achieve.
• Executing: Those processes performed to complete the work defined in the project management plan to satisfy the project specifications
• Monitoring and Controlling: Those processes required to track, review, and regulate the progress and performance of the project; identify any areas in which changes to the plan are required; and initiate the corresponding changes.
• Closing: Those processes performed to finalize all activities across all Process Groups to formally close the project or phase.

Knowledge areas

The ten knowledge areas, each of which contains some or all of the project management processes, are:

• Project Integration Management : the processes and activities needed to identify, define, combine, unify, and coordinate the various processes and project management activities within the project management process groups.
• Project Scope management : the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully.
• Project Time Management : the processes required to manage the timely completion of the project.
• Project Cost Management : the processes involved in planning, estimating, budgeting, financing, funding, managing, and controlling costs so that the project can be completed within the approved budget.
• Project Quality Management : the processes and activities of the performing organization that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs for which it was undertaken.
• Project Human Resource Management : the processes that organize, manage, and lead the project team.
• Project Communications Management : the processes that are required to ensure timely and appropriate planning, collection, creation, distribution, storage, retrieval, management, control, monitoring, and the ultimate disposition of project information.
• Project Risk Management : the processes of conducting risk management planning, identification, analysis, response planning, and controlling risk on a project.
• Project Procurement Management : the processes necessary to purchase or acquire products, services, or results needed from outside the project team. Processes in this area include Procurement Planning, Solicitation Planning, Solicitation, Source Selection, Contract Administration, and Contract Closeout.
• Project Stakeholder Management : the processes required to identify all people or organizations impacted by the project, analyzing stakeholder expectations and impact on the project, and developing appropriate management strategies for effectively engaging stakeholders in project decisions and execution.

Each of the ten knowledge areas contains the processes that need to be accomplished within its discipline in order to achieve effective project management. Each of these processes also falls into one of the five process groups, creating a matrix structure such that every process can be related to one knowledge area and one process group.

PRINCE2 (an acronym for PR ojects IN C ontrolled E nvironments) is a de facto process-based method for effective project management. It is both a methodology and a de facto standard used extensively by the UK Government and is widely recognized and used in the private sector, both in the UK and internationally. It provides consistency of process, approach and language which can therefore be applied to pretty much any type of project. PRINCE2 is a principles-driven project management methodology, which is based on seven principles, seven themes and seven processes.

The seven principles are:

• Continued Business Justification
• Learn from Experience
• Defined Roles and Responsibilities
• Manage by Stages
• Manage by Exception
• Focus on Products
• Tailor to Suit the Project Environment

The seven themes are:

• Business case
• Organization

PRINCE2 is not a "waterfall" methodology or a "silver bullet" solution or a 'one size fits all' solution; it is a project management framework that can readily be tailored to any size or type of project. Thus, it is both a perfect off the shelf method for complex projects, and as well as a great basis for tailoring to less complex project environments.

In Kanban , project progress is displayed on a board. Notes (also called stickers) are very common in this regard which moves from left to right generally. They are categorized as tasks in progress, recently completed and in queue. Kanban makes it easy to visualize what work is being going on and what's next. Kanban methodology works best for a small team. Also individuals consider the use of personal Kanban boards as effective use of methodology.

Six Sigma is a disciplined, data-driven product and process-improvement methodology that was originally developed by Motorola. The idea was to improve processes by eliminating defects, which are defined as "nonconformity of a product or service to its specifications." Those of us in project management generally do not think of it as a project management methodology.

The process steps go by the acronym DMAIC, which stands for Define, Measure, Analyze, Improve, Control, and when it is done to Synergize through the organization.

DMAIC is part of the Six Sigma methodology, but it also is often used as a stand-alone method. DMAIC (an abbreviation for Define, Measure, Analyze, Improve and Control) refers to a data-driven improvement cycle used for improving, optimizing and stabilizing business processes and designs. It and can be used as the framework for improvement projects outside of Six Sigma.

The framework is described briefly here:

• Define - who are the customers and what are their needs. Define the project purpose and scope. Define the current process and what customer wants from it.
• Measure - how is the process performing and how is it measured. Gather data on how well the current process performs in meeting customer needs
• Analyze - what are the most important causes of problems. Identify root causes of performance gaps and confirm with data.
• Improve- how do we remove the causes of problems? Plan, test, and implement solutions that eliminate root causes (use data to evaluate both the solutions and plans used to carry them out).
• Control - how can we maintain the improvements? Maintain the gains by standardizing work methods or processes. Anticipate future improvements and preserve the lessons from this effort.

Adaptive versus predictive

The two most popular project management solutions being implemented today are adaptive and predictive. Adaptive is widely known as agile, and predictive is also referred to as the waterfall or traditional methodology.

To avoid the limitations of the waterfall approach, agile method targets to be a flexible and iterative project management technique for dealing with rapidly change of customer requirements. One the other hand, the waterfall project management methodology details planning and upfront requirement before a project starts rolling. Steps and dependencies are explicitly mapped, and the project moves on to the next phase only when the previous one has already been completed. This solution works well for projects with defined tasks and sequences, and when you know exactly what the final deliverable should be.

Adaptive or predictive?

Based on these rough guidelines, you can see that both agile and waterfall have their uses, so that saying agile is better than waterfall - or the other way around, for that matter - is completely inaccurate. It all boils down to understanding which approach better jives with the needs of your project and the team you're working with.

Choose the right project management methodology

Since all projects vary and have differing requirements, there can be no project management method that is "best" and which applies to all businesses. Thus, project Management Methodologies are definitely not one-size-fits all, even within the same company, project type or industry. In one situation a specific methodology may work best, and in others it may be more suitable to have another one, or even a hybrid methodology. The same methodology is unlikely to work in the same organization on all projects. We can consider some of these factors for determining which methodology might be right for you:

• Organizational goals
• Core values
• Project constraints
• Project stakeholders
• Project size
• Cost of the project
• Ability to take risks
• Need for flexibility

Project management methodology is an essential for today's businesses. By adopting an appropriate method for your project, you can transform the way your project team communicates, works on tasks, and accomplishes project milestones on time and within budget.

Getting organized with Visual Paradigm

Whether you fully adopt one project management method of the above, or need to customize a particular method for fitting your specific need, using Visual Paradigm's Just-in-Time PMBOK process , will significantly increase your team's productivity and efficiency.

Businesses that utilize a project management method described above are far more likely to be successful with Visual Paradigm. Visual Paradigm enable your team work collaboratively and manage, assign and delegate tasks, share files, other resources automatically, and much more. Plus, Visual Paradigm is flexible enough to be customized by adding or removing works or deliverables from any project management methods in just-in-time and just-enough manner!

Visual Paradigm Process Maps

In Visual Paradigm, we provide the following method templates and the new templates will expect to be introduced in the coming few releases.

• With project selection phase, best fit for PMO
• With four levels of complexity
• TOGAF step-by-step guide-through process
• TOGAF customizable Just-in-Time Process Map
• PMBOK Customizable just-in-time Process Map
• Business Motivation Model (BMM) for Strategic Planning

What is Visual Paradigm Just-in-Time Process?

One-size-fits-all solution is not always applicable for nowadays complex and fast changing world. Process like Rational unified process (RUP) is considered to be heavy weight and lack agility to deal with dynamic situations and thus, not suitable for agile team development. The upfront requirements elicitation doesn't anticipate changes and might result in a lot wastes in time, effort and cost in the initial development stage.

Visual Paradigm's Just-in-Time (JIT) Process Map allows developers to define and configure process in just-in-time and just-enough manner to cope with the fast changing business environment, minimizing wastes for the entire process. You can customize a process like PMBOK, PRINCE2 or even invent your own process for your enterprise in an agile way.

Visual Paradigm provides you with a huge collection of templates and forms, with inline instructions and samples for you to create custom processes that fit your specific needs. Besides, there are some out-of-the box Work Items for you to add into your processes. These Work Items ranging from basic analysis and summary table, to a series of steps to create meaningful study on various aspects for enterprise architecture, project management, or ITSM activities such as meeting templates, review logs and etc.

Ready-to-use Just-in-Time Templates

In Visual Paradigm, a set of ready-to-use JIT process templates are included for project management and enterprise architecture. For project management templates, there are 4 different levels of complexity for different types of projects to adopt with. In addition, a PMBOK-like project management process template together with the forms and instructions are also provided. In terms of enterprise architecture, a TOGAF ADM project template is incorporated with ArchiMate for the diagram models in the deliverables. You can adopt these templates straight way, or customize the process a bit by adding your own forms and etc. to fit your specific project needs.

Just-In-time Process Map

Just-in-Time Process Map allows you to design a wide variety of development and management processes, such as, TOGAF ADM, PMBOK , PRINCE2 and many more. In addition, you can use it to model many different aspects of process activities ranging from event and task management (member view, project view, or deliverable view), to product development or agile process management by configuring the column headers as phases, members, projects, deliverables and etc. For instance, you can present process like PMBOK by having development phases as columns and knowledge areas as rows.

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Project Management Basics: Definitions, Methods and Tools

Welcome to project management 101. Project management can seem like a daunting discipline, but once you get a grasp of the fundamentals and combine that with some intuition, you’ll be on your way to leading successful projects, no matter your situation.

Maybe you’ve been unexpectedly assigned to lead a project and a big promotion is on the line, or maybe you’re a team member who wants to better understand their role in the project. Regardless, we’re going to give you a brief overview of the major details involved in project management for actionable information.

If you need more help with project management, check out all of our resources and project management tools for reaching your full potential. ProjectManager is powerful project management software that can be used by both experienced and beginner project managers and team members to manage projects. Get started for free today.

The first project management basic is the definition of a project, which allows us to understand what project management is and why it’s so important for any type of organization.

What Is a Project?

A project is a sequence of tasks that lead toward a singular goal. Projects have boundaries, such as the time, people and resources needed to complete the project. These all depend on what results you want to achieve and when you want to achieve them.

Those results are your outcome, which produces deliverables. They’re anything that’s produced or provided because of the project. Deliverables can be both the result of the project itself, but also the results of the process of the project, such as the project plan , reports or other documents. Projects are made up of deadlines. Each task and phase of the project has a due date, which means your project has a schedule.

Budgets are also part of a project. You need money to pay for the resources to meet the demands of the project within the time allotted. Typical resources include the workforce, work supplies and equipment. A project budget outlines these expenditures. Now that we’ve determined what a project is, we can define project management as a discipline.

What Is Project Management?

Project management is a discipline that consists in using project management methodologies, tools and techniques to manage the project life cycle, which is a set of stages that are common to every project. While there are several project management roles within a project team, the project manager is usually in charge of overseeing the process of planning, executing and monitoring projects from start to finish.

Let’s review four foundational project management concepts that shape the project management discipline: the project life cycle, the triple constraint of project management, the project management knowledge areas and some of the different project management methodologies you can use as a project manager.

Project Life Cycle

The project life cycle describes the five phases all projects go through. Here’s a quick overview of each.

• Initiation: Here’s where you set out the project scope , the goals, the organization of the project, its business case, its constraints, who the stakeholders are, what the risks are, the project controls, the reporting framework, etc.
• Planning: This is where you build the roadmap to take you from point A to Point B, which means creating a schedule of the tasks, deadlines and resources needed to complete everything on time.
• Execution:  The project begins and the project plan is put into action.
• Monitoring & Controlling: To ensure the project is proceeding as planned, you need to set up mechanisms for monitoring progress. If the project isn’t proceeding as planned, work to control and resolve issues before they become problems.
• Closing: Projects are temporary endeavors, so they eventually come to an end and need to be formally closed . But it’s not as simple as producing deliverables; there’s paperwork to sign off on, resources to reallocate and other loose ends to tie up.

The Triple Constraint

Regardless of the method you use to manage a project, understanding the triple constraint is key. All projects are carried out with certain constraints. These are cost, time and scope. That is, projects must come in within budget, be delivered on time and meet the agreed-upon scope.

If you think of the triple constraint as a triangle , then if you’re managing the cost, time and scope, the triangle is quality. So, if you’re managing the cost, time and scope of the project, then you’re going to meet the customer’s quality requirements.

But the triple constraint is more than that; it’s like the ballast on a ship and keeps the project balanced no matter how rough the waters get. For example, if you need more money, then you’re going to have to adjust the time or scope of the project. Accordingly, if you’re short on time, then the budget or scope will have to change.

If you keep the triple constraint in mind while managing your project, along with the project phases and management tools, then you have the means to make the necessary adjustments that can keep the project on track. It’s the formula for success.

Project Management Knowledge Areas

Project management knowledge areas can be simply defined as categories that describe the different types of work that are done by project managers and team members to complete projects successfully. Project managers should be very knowledgeable in each of these 10 project management knowledge areas so they can guide teams through the project life cycle and make sure the triple constraint is well balanced.

• Project integration management
• Project scope management
• Project time management
• Project cost management
• Project quality management
• Project human resource management
• Project communications management
• Project risk management
• Project procurement management
• Project stakeholder management

If you’re interested in this topic, you can check out our project management knowledge areas blog for more information on these key principles of project management.

Project Management Methodologies

There are many ways to structure a project’s process, and project managers are experts in one or more of them. The most traditional is called waterfall, which follows a linear approach to managing a project, breaking down the project into a very structured sequence.

A different approach that is gaining popularity is called Agile , which comes from software development. It’s a process that works in small phases or cycles called “sprints,” and lends itself to small teams. Like its name, the process embraces change and is flexible and is continuously changing direction according to client feedback.

Why Is Project Management Important?

Every business, non-profit or any other type of organization needs to execute projects, which makes project management important for any organization.

Effective project management not only means that your team will deliver projects on time and under budget but also brings other organization-wide benefits such as increased productivity, reduced costs, better leadership and motivated employees.

In a nutshell, project management helps organizations become more efficient through planning and monitoring of tasks, goals and team performance.

What Is a Project Manager?

A project manager is the person in charge of the project. That much is clear, but that might be too simple of an explanation. The project manager leads the project through every phase. That means they’re responsible for first selling the project to stakeholders, then planning and defining the scope of the project.

What Does a Project Manager Do?

Project managers figure out all the tasks necessary to achieve the project goals, then they sequence those tasks into a schedule. Those tasks and schedules are then given the resources needed to achieve the project’s objectives. That means assembling a team, getting the tools and supplies they need and securing a site and the necessary resources.

The project manager is also the person who creates the project budget in order to pay for those resources. They’re responsible for managing all the documentation and then archiving those documents at the end of the project. They also manage risk and monitor project progress to make sure people are working unobstructed and within the schedule and budget.

So essentially, anything project related is under the purview of the project manager. They are the leaders of the project and manage the teams that are executing the project plan. However, they’re not the boss. The project manager has sold the idea of the project to a sponsor or stakeholder, and they report to them on the project’s progress.

Therefore, a project manager is a very well-organized person, one who is goal-oriented and passionate about the process. A project manager must work well under pressure, provide leadership and know how to motivate people to do their best. Beyond people skills, communication skills are paramount. And they must know the methods and techniques that help deliver projects successfully.

Project Management Tools

As you may have noticed, projects can be complicated. You plan, schedule and monitor to make sure all elements of the project are running smoothly. The more tools in hand, the more manageable the project and your tasks.  Project management software  can contain all the tools needed to help project managers and team members with every aspect of their projects.

When project management software is cloud-based, data and collaboration can happen in real-time, which provides a more accurate picture of the project and helps in decision-making. Plus, project management software often contains many of the major tools for managing projects, like those discussed below.

Project dashboards gather metrics from all parts of the project. Those numbers are then displayed in easy-to-read charts and graphs, giving a manager or a team member a live look at project progress and data. Dashboards can also assist in reporting. Running a project means reporting to the project’s sponsors on the progress of the project. Graphs and charts can be filtered to deliver just the data you need for targeted reports.

Gantt Charts

Online Gantt charts are great tools for planning because they display your task list graphically over a timeline. Each task has a deadline, which creates a line marking the start and finish of that task. Tasks can then be linked, if dependent.

Ideally, you can share the Gantt with your team and track their progress as they update their statuses. With some Gantt charts, the bar between the start and finish dates will fill in as the team works on their tasks, and if you need to change the schedule, you can simply drag and drop the bar to reflect the new due date.

Task Management Tools

There are task management tools that allow you to create to-do lists for yourself and assign tasks to team members. These tasks can sometimes have notes, files, links and images attached that relate to the task, and team members can dialogue and collaborate at the task level. You can also automate email notifications to know when a task is completed and to remind people of impending deadlines.

Timesheets and Workload Tools

In terms of managing the people working on the project, which can be a project by itself, there are timesheets . These are online documents that make it easy for each employee to track and record their hours worked, and they can be filed to the manager when complete for sign-off.

When it comes to managing the workload, resource allocation tools allow you to see at a glance if you’ve allocated your resources properly across the project so that everyone is working and the workload is balanced. In some cases, you can run reports from your workload management software, too.

Project Management Templates

We offer dozens of free project management templates to help you save time and streamline your projects. Here are some essential project management documents you can download for free.

Project Plan Template

A project plan is a document that explains everything about your project from how it’s scheduled to how it’ll be executed and completed. This free project plan template will help you get started with your projects.

Project Budget Template

Every project needs resources such as people, materials and equipment. These resources cost money, so you’ll need to estimate all your project costs to create a project budget. This free template is ideal for beginner project managers.

Project Timeline Template

It’s important to create a project timeline that maps out how project work will be carried out, including start and end dates for all your tasks. This free project timeline template helps you do so.

What Is Project Management Software?

Project management software does the heavy lifting to allow managers to easily plan, schedule and track projects in a much faster and more efficient manner than traditional methods such as drafting project schedules by hand.

Project management software can be defined as a type of software that incorporates the project management tools mentioned above, along with other features such as timesheets, real time team-collaboration or unlimited file storage, so that project managers and teams can keep track of projects in one central platform.

However, not all project management software works in the same way. There are many options on the market and while some are easy to use, they might not provide all the planning, scheduling and tracking tools that you need.

How ProjectManager Helps With Project Management

ProjectManager is online project management software that helps you manage every aspect of your projects. It’s equipped with all the project management tools any project manager would need, regardless of your expertise level. Project management software like ProjectManager is what makes managing a project manageable.

Store Documents

All the paperwork generated during the project initiation phase can be saved to ProjectManager. This way, you can collect everything in one place, making it easy to find what you need. Don’t worry about uploading large files and images, ProjectManager has unlimited file storage.

Plan & Schedule Work

When you plan your project, ProjectManager does the heavy lifting. An online Gantt chart helps you schedule by mapping all your tasks across a project timeline. Now you can link dependencies, set milestones and even start assigning team members.

Monitor Progress

As teams execute their tasks, they can use ProjectManager’s tools to monitor and control their progress. Resource management features make sure that no one team member is carrying the entire load and their workload is balanced. Plus, our real-time dashboard can track progress, cost, health and more.

Of course, there’s more to project management than the information in this project management 101 article. It gets deep, and it’s constantly evolving. However, there’s one constant in the eye of the hurricane that’s managing a project: tools.  ProjectManager is online project management software with real-time dashboards, online Gantt charts and features to manage workload, resources, schedules and every aspect of your project. See how it can help you succeed by taking this free 30-day trial today!

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Waterfall Methodology: A Comprehensive Guide

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If you've been in project management for a while, you must’ve encountered the Waterfall methodology. It's an old-school software development method from the 1970s.

In a Waterfall process, you must complete each project phase before moving to the next. It's pretty rigid and linear. The method relies heavily on all the requirements and thinking done before you begin.

Don't worry if you haven't heard of it. Let’s break the Waterfall method down and see how it works.

What is the Waterfall methodology?

Waterfall methodology is a well-established project management workflow . Like a waterfall, each process phase cascades downward sequentially through five stages (requirements, design, implementation, verification, and maintenance).

The methodology comes from computer scientist Winston Royce’s 1970 research paper on software development. Although Royce never named this model “waterfall”, he gets credit for creating a linear, rigorous project management system.  

Unlike other methods, such as the Agile methodology, Waterfall doesn't allow flexibility. You must finish one phase before beginning the next. Your team can’t move forward until they resolve any problems. Moreover, as our introduction to project management guide outlines, your team can’t address bugs or technical debt if it’s already moved on to the next project phase.

What are the stages of the Waterfall methodology?

Five phases comprise the Waterfall methodology: requirements, design, implementation, verification, and maintenance. Let's break down the five specific phases of Waterfall development and understand why it’s critical to complete each phase before progressing to the next.

Requirements

The requirements phase states what the system should do. At this stage, you determine the project's scope, from business obligations to user needs. This gives you a 30,000-foot overview of the entire project. The requirements should specify:

• resources required for the project.
• what each team member will work on and at what stage.
• a timeline for the entire project, outlining how long each stage will take. 
• details on each stage of the process. 

But these requirements " may range from very abstract to a detailed mathematical specification ,” writes Steven Zeil , professor of computer science at Old Dominion University. That’s because requirements might not outline an exact implementation, and that’s something development addresses in later stages. 

After gathering all the requirements, it's time to move on to the design stage. Here, designers develop solutions that meet the requirements. In this stage, designers:

• create schedules and project milestones.
• determine the exact deliverables.  
• create designs and/or blueprints for deliverables. 

Deliverables could include software or they could consist of a physical product. For instance, designers determine the system architecture and use cases for software. For a physical product, they figure out its exact specifications for production. 

Implementation

Once the design is finalized and approved, it's time to implement it. Design hands off their specifications to developers to build.

To accomplish this, developers:

• create an implementation plan.
• collect any data or research needed for the build.
• assign specific tasks and allocate resources among the team. 

Here is where you might even find out that parts of the design that can't be implemented. If it's a huge issue, you must step back and re-enter the design phase.

Verification

After the developers code the design, it’s time for quality assurance. It’s important to test for all use cases to ensure a good user experience. That's because you don't want to release a buggy product to customers.

• writes test cases.
• documents any bugs and errors to be fixed.
• tests one aspect at a time.
• determines which QA metrics to track.
• covers a variety of use case scenarios and environments.

Maintenance

After the product release, devs might have to squash bugs. Customers let your support staff know of any issues that come up. Then, it's up to the team to address those requests and release newer versions of your product.

As you can see, each stage depends on the one that comes before it. It doesn't allow for much error between or within phases.

For example, if a stakeholder wants to add a requirement when you're in the verification phase, you'll have to re-examine the entirety of your project. That could mean tossing the whole thing out and starting over.

Benefits of Waterfall methodology

The benefits of Waterfall methodology have made it a lasting workflow for projects that rely on a fixed outcome. A 2020 survey found that 56% of project professionals had used traditional, or Waterfall, models in the previous year.

A few benefits of Waterfall planning include:

• Clear project structure : Waterfall leaves little room for confusion because of rigorous planning. There is a clear end goal in sight that you're working toward.
• Set costs : The rigorous planning ensures that the time and cost of the project are known upfront.
• Easier tracking : Assessing progress is faster because there is less cross-functional work. You can even manage the entirety of the project in a Gantt chart, which you can find in Jira Software.
• A replicable process : If a project succeeds, you can use the process again for another project with similar requirements.
• Comprehensive project documentation : The Waterfall methodology provides you with a blueprint and a historical project record so you can have a comprehensive overview of a project.
• Improved risk management : The abundance of upfront planning reduces risk. It allows developers to catch design problems before writing any code.
• Enhanced responsibility and accountability : Teams take responsibility within each process phase. Each phase has a clear set of goals, milestones, and timelines.
• More precise execution for a non-expert workforce : Waterfall allows less-experienced team members to plug into the process.
• Fewer delays because of additional requirements : Since your team knows the needs upfront, there isn't a chance for additional asks from stakeholders or customers.

Limitations of Waterfall methodology

Waterfall isn't without its limitations, which is why many product teams opt for an Agile methodology.

The Waterfall method works wonders for predictable projects but falls apart on a project with many variables and unknowns. Let's look at some other limitations of Waterfall planning:

• Longer delivery times : The delivery of the final product could take longer than usual because of the inflexible step-by-step process, unlike in an iterative process like Agile or Lean.
• Limited flexibility for innovation : Any unexpected occurrence can spell doom for a project with this model. One issue could move the project two steps back.
• Limited opportunities for client feedback : Once the requirement phase is complete, the project is out of the hands of the client.
• Tons of feature requests : Because clients have little say during the project's execution, there can be a lot of change requests after launch, such as addition of new features to the existing code. This can create further maintenance issues and prolong the launch.
• Deadline creep : If there's a significant issue in one phase, everything grinds to a halt. Nothing can move forward until the team addresses the problem. It may even require you to go back to a previous phase to address the issue.

Below is an illustration of a project using the waterfall approach. As you can see, the project is segmented into rigid blocks of time. This rigidity fosters an environment that encourages developers, product managers, and stakeholders to request the maximum amount of time allotted in each time block, since there may be no opportunity to iterate in the future.

How is the Waterfall method different from Agile project management?

Agile project management and the Waterfall methodology have the same end goal: crystal clear project execution. While Waterfall planning isolates teams into phases, Agile allows for cross-functional work across multiple phases of a project. Instead of rigid steps, teams work in a cycle of planning, executing, and evaluating, iterating as they go. 

The " Agile Manifesto " explains the benefits of Agile over the Waterfall model:

• Individuals and interactions over processes and tools
• Working software over comprehensive documentation
• Customer collaboration over contract negotiation
• Responding to change by following a plan

If you're looking for tools that support Agile project management and serve the same end goal as Waterfall, consider Jira Software . It’s best suited for Agile projects, and helps you: 

• Track work : With Gantt charts , advanced roadmaps , timelines, and various other tools, you can easily track your progress throughout the project.
• Align your team : Tracking allows you to seamlessly plan across business teams, keeping everyone aligned on the same goals.
• Manage projects and workflows : With Jira Software, you can access project management templates that you can use for your Agile workflows .
• Plan at every stage : Jira Product Discovery , another product by Atlassian, offers product roadmaps for planning and prioritizing product features at every stage, from discovery to delivery.

Atlassian's Agile tools support the product development lifecycle. There are even Agile metrics for tracking purposes. Jira Work Management lets you drive forward the Agile process. It uses intake forms to track work being done by internal teams and offers a repeatable process for requests.

These Jira products integrate natively within the app, unifying teams so they can work faster.

Use Agile methodology for project management

Waterfall methodology has a long history in project management, but it's often not the right choice for modern software developers. Agile methodology offers greater flexibility.

Here’s why most teams prefer an Agile process:

• Adaptability to changes : If something arises, your team will be better able to adjust on the fly. Waterfall’s rigidity makes it difficult to deal with any roadblocks.
• Continuous feedback loop : Continuous improvement requires a feedback loop. With Agile, you can gather feedback from stakeholders during the process and iterate accordingly. 
• Stronger communication : Teams work collaboratively in an Agile process. Waterfall is a series of handoffs between different teams, which hinders effective communication. 

Here is where a project management tool such as Jira Software comes in handy for an Agile methodology. You can also use a project management template for your Agile projects. Your team can plan, collaborate, deliver, and report on projects in one tool. That keeps everyone aligned throughout any project and streamlines project management.

Waterfall methodology: Frequently asked questions

Who is best suited for waterfall methodology.

The Waterfall methodology works best for project managers working on projects that include:

• Less complex objectives : Projects that don't have complicated requirements are best suited for Waterfall.
• Predictable outcomes : Waterfall works best for those projects that are replicable and proven.
• Reduced likelihood of project scope creep : A project where clients aren't likely to come up with last-minute requirements is suitable for Waterfall.

Agile methodology is perfect for nimble teams with an iterative mindset, such as: 

• Cross-functional teams : A team of people with different skill sets that allows them to work on various aspects of a project. These are collaborative types who are flexible.
• Self-organizing teams : Autonomous teams that don't need a lot of handholding. They embrace ambiguity in a project and are great problem solvers. This mindset also gives them more ownership over outcomes.
• Startups and small businesses : These benefit from the mindset of " move fast and break things ". So they can fail fast, learn, and improve.

Finally, Agile works well for customer-centric projects where their input allows you to iterate.

What factors should I consider before implementing a project management approach?

When deciding on the proper methodology to implement in project management, there are four main factors to consider: project complexity, organizational goals, team expertise, and stakeholder involvement.

Let’s break each one down: 

• Project complexity : Waterfall can help break down larger, more complex projects into smaller sets of expectations and goals. But its rigidity doesn’t deal well with unknowns or changes. Agile is better for complex projects that have a lot of variables. 
• Organizational goals : What does your organization want to achieve? Is it looking to innovate or keep the status quo? An Agile approach is best if your organization wants to break down silos. Teams will work more collaboratively with more autonomy.
• Team expertise : Agile is an excellent way to go if your team is cross-functional and can work across skill sets. If your team members rely heavily on a singular skill set, Waterfall may be better. 
• Stakeholder involvement : If your stakeholders are going to be more hands-on, Agile will help you best because it allows for continuous feedback and iteration. 

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IT Project Management: Definition, Methodology, & Examples

IT Project Management (Image by Forbes)

IT project management is a vital discipline that directs the successful execution of technology projects.

Essentially, it is the practice of planning, executing and monitoring technology projects to achieve specific goals within time and budget constraints. 

The purpose of project management in IT is to offer a structured yet flexible framework that leads technology projects to triumph.

This demands technical expertise, strategic planning, and robust teamwork to ensure timely delivery, cost-effectiveness, and adherence to the desired standards.

The following article explores the fundamental principles and practices vital for successfully executing IT projects, providing valuable insights and tactics for newcomers and experienced professionals. 

Fundamentals of IT Project Management

Time is pressing in the fast-paced technology industry, where IT project management is critical.

The discipline of IT project management guides technology projects from inception to completion, navigating the rapid technological advancements and intense demand for innovation that characterize the landscape.

An IT project management requires a reliable blend of technical expertise and mastery of communication, risk management, and strategic planning to succeed in this dynamic environment. 

This combination is advantageous and critical in keeping up with the ever-evolving technological advancements.

Team Dynamics and Collaboration

Team dynamics and collaboration have a significant impact on project outcomes. 

A cohesive IT team includes skilled individuals and fosters an environment where diverse talents and perspectives drive innovation and problem-solving. 

Building a cohesive IT team involves promoting a culture of open communication and mutual respect. 

Moreover, maintaining a positive team culture is also critical to sustained collaboration. 

This can be accomplished by acknowledging and commemorating accomplishments, assisting during difficulties, and ensuring a healthy work-life balance. 

Tools and Technologies for IT Project Management

Project managers encounter various challenges, such as maintaining team cohesion, ensuring timely communication, and keeping track of multiple tasks and deadlines. 

This is why the role of tools and technology cannot be overstated. 

Tools and technologies provide a centralized platform to organize tasks, timelines, and resources, streamlining the process. 

There are various tools and technologies available for IT project management. 

Integrating these tools results in a streamlined, more efficient management process. 

Teams can collaborate seamlessly, meet deadlines with greater accuracy, and achieve project goals more effectively. 

Agile and Waterfall Methodologies

Agile and waterfall project management methodologies serve different purposes in IT. 

The selection between those methodologies should depend on the specific needs and nature of the project. 

Agile provides flexibility and responsiveness to accommodate changing requirements, making it a good fit for projects that require continuous adaptation. 

The Agile methodology centers around iterative development, breaking the project into smaller units rather than simultaneously delivering it. 

For businesses, agile methodology means delivering products that align better with current market demands and meet client expectations. 

In contrast, waterfall methodology offers a structured, predictable approach that works best for projects with precise, unchanging requirements. 

The primary advantage of the waterfall is its straightforward, structured approach. It is most effective for projects with clearly defined objectives and consistent requirements. 

Waterfall methodology provides increased predictability in terms of both project timelines and budgets for businesses. 

Budgeting and Resource Allocation

Budgeting and resource allocation in IT project management require balancing financial constraints with project needs. 

Effective strategies involve careful planning, ongoing monitoring, and flexible resource management. 

Estimating costs for resources, labor, and expenses is critical to budgeting in IT projects. 

Effective budgeting tackles the issue of delivering projects within financial constraints while upholding quality. 

Resource allocation in IT project management entails assigning suitable resources, such as team members, equipment, and technology, to the appropriate tasks. 

Implementing both practices guarantees the efficient utilization of resources, keeping the project on track financially and operationally. 

A few strategies can be employed to optimize resource utilization while adhering to financial constraints:

• Prioritize tasks
• Regular monitoring
• Flexible resourcing
• Leverage technology

Monitoring and Evaluation in IT Projects

Continuous monitoring and evaluation are essential to ensure that IT projects stay aligned with their objectives and are completed successfully. 

Monitoring and evaluating IT projects ensures they remain aligned with their goals and efficiently executed. 

Tools such as project management software, regular team meetings, performance metrics and feedback loops can help MSPs and businesses keep projects on track, identify problems early and ensure successful outcomes . 

Monitoring requires continuous observation of the project’s progress to ensure it adheres to the planned schedule, budget, and scope. 

Meanwhile, evaluation systematically assesses the project’s progress at different stages. It enables a comprehensive understanding of whether the project is attaining its objectives and delivering the anticipated value. 

Example of IT Project Management

Let’s consider an IT project management example, specifically the development and implementation of a customized software solution for a business client. 

This project involves various activities, including but not limited to initial needs assessment, planning, software design, development, testing, and deployment. 

The IT project manager initiates the project by conducting a comprehensive needs analysis to comprehend the client’s specific requirements fully. 

The value lies in ensuring the project aligns perfectly with the client’s business objectives and IT strategy. 

After defining the project scope, the IT project manager supervises the design and development phase, which involves coordinating a team of developers, designers, and other technical professionals to create the software. 

The IT project manager implements monitoring and evaluation processes during the development phase. 

After development, the project manager oversees testing and deployment to ensure the software meets all requirements and functions adequately in the client’s operational environment. 

Post-Implementation Review and Continuous Improvement

Post-implementation review and continuous improvement are essential to ensure IT projects’ long-term success and quality. 

The Post-Implementation Review (PIR) and Continuous Improvement are integral components of IT project management, especially for Managed Service Providers (MSPs) and businesses focusing on delivering top-notch IT services. 

PIR is conducted after the completion of an IT project to improve the quality of the project. 

The main objective of PIR is to assess whether the project has achieved its goals and extract valuable lessons learned from the evaluation process. 

The significance of PIR lies in its ability to provide insights that can enhance the outcome of future projects. 

At the same time, continuous improvement is about constantly looking for ways to improve project management processes and results. It means applying what is learned from PIR to future projects. 

For MSPs and businesses, this entails creating a culture that actively seeks and utilizes feedback to drive improvements. 

MSPs and businesses can bolster their project management practices by conducting comprehensive PIRs and adopting a continuous improvement mindset. 

This ideal circumstance leads to improved project outcomes and increased client satisfaction. 

Step into IT project management with this guide. This journey intertwines technical mastery, strategic understanding, and the art of teamwork. 

Imagine applying these distilled principles to your next project as an IT professional or project manager. 

This is your gateway to elevating your projects to new levels of excellence. Every step you take with these insights brings you closer to the pinnacle of success. 

Visualize yourself leading your next IT project. Each strategy from this guide is a tool in your arsenal, shaping the path to your project’s triumph. 

Sharing your experiences and learning from peers isn’t just an activity; it’s an upward spiral, lifting your project management skills higher.

Feel the pride and satisfaction as your project, infused with your dedication and this newfound wisdom, achieves its objectives. And, of course, Octobits is your partner on this journey. 

With its sophisticated platform, Octobits redefines IT management, offering a unified dashboard, streamlined login systems, and efficient billing and reporting – all harmoniously integrated to simplify your work. 

Imagine a world where your IT environment seamlessly integrates with industry giants like Datto Autotask, Microsoft 365, Azure, AWS, CrowdStrike, and Proofpoint. 

Octobits isn’t just a tool; it’s the architect of a cohesive and optimized IT landscape tailor-made for your business needs. 

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Internal Rate of Return (IRR): Definition, Formula, How to Calculate?

Home Blog Project Management Internal Rate of Return (IRR): Definition, Formula, How to Calculate?

The Internal Rate of Return (IRR) is a crucial metric for determining the profitability of a project. As a professional with experience in managing numerous projects and holding the PMP (Project Management Professional) certification, I understand the significance of IRR in making informed decisions.

In this article, I will cover the definition, the IRR formula, how to find IRR, and step-by-step calculation of the Internal Rate of Return. I aim to educate aspiring project managers about IRR and project evaluation, drawing from my personal experiences. Whether you're pursuing your PMP certification by taking PMP classes online or improving your project management skills , IRR is crucial for making sound financial decisions in the dynamic world of project management.

When theory meets practice, informed decisions lead to success. Let's explore IRR together.

What is the Internal Rate of Return (IRR)?

Project managers often use a financial metric called the Internal Rate of Return (IRR) to evaluate the profitability of a project or investment. IRR is calculated as a discount rate that makes the net present value (NPV) of a project's cash flow equal to zero. It is usually expressed as a percentage and helps in determining the potential return on investment over time.

The Internal Rate of Return (IRR) is a useful tool for project managers to evaluate investment options and project proposals. Generally, a higher IRR is desirable as it indicates a better return on investment. However, it is important to consider other financial indicators and qualitative factors in addition to IRR to make informed decisions about project selection and prioritization.

IRR is an important tool for financial analysis and decision-making throughout the project lifecycle.

What Is Internal Rate of Return Used For?

Let me explain how the Internal Rate of Return (IRR) is used in project management with a simple example. As a project manager , you are weighing two project investments and choosing a project based on its prospective returns. To do this, you need to look at each project's five-year cash-flow. Consider Project A and Project B:

• Calculate the IRR for each project to determine which is better.
• The IRR discount rate zeroes all cash flows' Net Present Value (NPV). At this rate of return, future cash inflows match the initial investment's present value.
• Project A has 12% IRR and Project B has 15%. You now compare these rates to your company's cost of capital. If your company's cost of capital is 10%, both projects offer better returns.
• Project B has a greater IRR (15%) than Project A (12%), so you might choose it. If all other things are equal, a larger IRR makes the investment more appealing.
• IRR is only one decision-making aspect; it's commonly used with other financial measures to assess the project's profitability and risk.

Internal Rate of Return (IRR) Formula

The discount rate at which the Net Present Value (NPV) of a set of cash flows equals zero is called the Internal Rate of Return (IRR). To find the internal rate of return (IRR), you need to compare the cash flows' present value to the starting investment's present value. Here's the formula to find IRR:

• is the net cash flow during the period ‘t’
• IRR is the Internal Rate of Return
• C 0   is the total initial investment cost
• T is the total number of periods

Internal Rate of Return (IRR) Key Points for Project Management

The below-mentioned IRR key points are crucial for any project manager. Project Management online training helps you become proficient in the following key points:

• Project managers evaluate investment profitability using IRR.
• IRR is the discount rate at which cash flow NPV becomes zero.
• IRR compares projects and prioritizes those with higher returns.
• The IRR method of Capital budgeting projects can benefit from using the internal rate of return (IRR) to compare yearly return rates over time.
• Interpreting cash flow patterns can become challenging when there are multiple internal rates of return (IRR) due to their complexity.
• IRR's ultimate aim is to determine the discount rate at which the present value of the sum of yearly nominal cash inflows equals the initial net cash outlay of the investment.

Internal Rate of Return (IRR) Example calculation

Consider yourself a project manager . To move on, you must review two projects, and then finalize a better IRR project. For example, Project A and B's cash flows are as follows:

Now, let's find the Internal Rate of Return (IRR) for each project using the following IRR equation:

IRR for Project A:

IRR for project A = 8.9%

IRR for Project B:

IRR for project B = 11.22%

The IRR for Project B is 11.22%, while for Project A it is 8.9%. Therefore, based on the IRR as a measure, Project B is a better choice.

How to Calculate IRR in Excel?

It's easy to figure out the internal rate of return (IRR) in Excel. You can use the built-in IRR function. Here is a step-by-step guide:

1. Set up your data

Create a cash flow table in Excel. Use the first row for labels and the following rows for periods and cash flows. For example:

This example starts with a $1000 investment at time 0, followed by positive cash flows.

2. Use the inbuilt IRR function

Enter the following internal rate of return equation into a cell that is empty and where you want to display the internal rate of return:

fx  =IRR(B2:B6)

Here, B2-B6 displays the cash flow ranges and corresponding entries.

3. Press Enter

Once you've finished entering the IRR calculation formula, press Enter. Excel will calculate the IRR using the provided cash amounts.

4. Analyze the Result

The cell with the formula now displays the IRR, which is approximately 25% in this case. This percentage represents the internal rate of return for the cash flow line.

It is important to remember that the Internal Rate of Return (IRR) is the discount rate that results in a Net Present Value (NPV) of zero for your cash flow. In most cases, a project is considered acceptable if the IRR is higher than the required rate of return or the cost of cash.

To make it easier to read, you may want to format the cell displaying the IRR as a percentage in Excel. To do this, right-click on the cell, select "Format Cells," and choose the "Percentage" style.

Ways to Calculate IRR

A common application of IRR is to compare various investment opportunities. IRR calculation explained in the following ways:

1. IRR Calculation for Uniform Cash Flows

Using the following internal rate of return formula, you can determine the Internal Rate of Return (IRR) for uniform cash flows. For a series of uniform cash flows, the formula simplifies to

• NPV - Net Present Value
• t - Number of years
• C t - Cash flow in a specific period “t”
• IRR - Internal Rate of Return

The goal is to determine the discount rate (IRR) that makes the net present value (NPV) of the cash flows zero. This problem cannot be solved algebraically for IRR, so project managers often use iterative methods, financial calculators, or software to find the solution.

2. IRR Calculation for Non-uniform Cash Flows

Iterative steps are used to solve IRR for non-uniform cash flows. The NPV formula remains the same, but due to varying cash flows, trial and error or advanced numerical methods may be required.

Iterate manually:  To perform an iteration by manual method, follow these steps:

• Start by guessing the rate, for example, 10%.
• Use this rate to calculate the Net Present Value (NPV) by plugging it into the formula.
• Repeat the process by changing the rate and calculating the NPV again until the accuracy is good enough. It's important to keep changing the rate until you achieve the desired level of accuracy.

Calculators or Software tools:

Calculating IRR for non-uniform cash flows can be simple with the help of various financial tools and spreadsheet programs. Microsoft Excel and other similar programs have features like IRR which can assist you in performing the iterative calculation. All you have to do is input the cash flow numbers and let the software do the rest for you.

3. IRR for Mutually Exclusive Projects

The Internal Rate of Return (IRR) is crucial for assessing mutually exclusive projects. When looking at IRRs, the project with a higher rate is a better investment. Incremental analysis, which compares project cash flows, helps make decisions. A comprehensive assessment includes EAC and reinvestment assumptions. Usually, the project with the highest IRR is chosen, providing a straightforward method to select the most profitable of mutually exclusive projects.

Pros and Cons of Internal Rate of Return

The following are the pros and cons of using Internal Rate of Return (IRR):

• IRR establishes a definitive benchmark for decision-making.
• IRR is easy to understand and communicate.
• IRR makes project comparisons easier. This can help you select projects and allocate funds to those with better returns.
• You can utilize IRR to evaluate long-term investment projects in capital planning to allocate resources efficiently.
• Project managers can understand cash flow fluctuations with IRR, which analyzes timing and amount.
• IRR assumes project cash flows be reinvested at the same rate as IRR. In volatile markets, this assumption may not apply.
• In some cases, the IRR method formula might be confusing and difficult to calculate.
• IRR is a percentage that non-financial stakeholders may find confusing. Stakeholders may also mistake a greater IRR for success without considering additional variables.
• IRR does not consider the investment size, which may not favor bigger ones.
• IRR may neglect the value and profitability of mutually exclusive projects in favor of higher-return projects.

Limitations of IRR

IRR has various limitations that should be considered when evaluating projects more thoroughly. Here are the main limitations of the IRR:

• Projects that exhibit unconventional cash flow patterns may have multiple internal rates of return (IRR), which might require further clarification.
• Comparing projects with differing lengths using IRR can be complicated. A short-term project with a high IRR may seem like a good investment, but a lengthy project may have a low IRR, earning profits slowly.
• IRR-based decision-making may be inaccurate if the hurdle rate or capital cost is chosen incorrectly or fluctuates.
• Companies compare IRR when choosing projects. Even with identical IRRs, a company may choose the easier investment if it costs less the initial capital or has less complex factors.
• IRR assumes reinvestment of positive cash flows at the project return rate, but finding eligible reinvestment opportunities at the predicted IRR may take time, resulting in differing returns.

Aspiring project managers and PMP candidates will find that understanding and utilizing IRR can significantly impact project evaluation and decision-making processes. Project managers use IRR to select investments with the best returns. Becoming proficient in IRR requires a deep understanding of a project's potential and financial methods that support project goals.

I highly recommend anyone pursuing KnowledgeHut's PMP training to learn about what does IRR means. It is an incredibly powerful tool that can help you successfully negotiate project finance . By calculating and interpreting IRR, you can make informed decisions that can have a significant impact on the success of your project.

Personally, mastering IRR has helped me improve my project management skills and become a more strategic and successful leader. To all aspiring project managers, I encourage you to embrace the challenges of learning IRR as it can provide you with valuable insights that go beyond financial considerations and transform the way you evaluate and manage projects .

Frequently Asked Questions

Iterative approaches to manually calculate the Internal Rate of Return (IRR) can be complex and time-consuming. Trial and error is required to find the discount rate that zeros out cash flow NPV.

IRR may be calculated from NPV in Excel using the "IRR" function. Enter cash flow values in a column, including the initial investment as a negative value. Calculate using the internal rate of return formula excels "=IRR (range of cash flows)." Excel calculates the internal rate of return from cash flow values.

The Internal Rate of Return (IRR) measures the potential profitability of an investment at the discount rate, where the project's net present value (NPV) equals zero. It provides an intrinsic return on investment (ROI) for the project. Whereas the weighted average cost of capital (WACC) considers a company's debt and equity components to compute its capital cost.

IRR is commonly used to assess project profitability during project selection. It checks if the investment's return is greater than the cost of capital. When all parameters are equal, projects can be compared using IRR, with higher IRR values indicating better investments.

Kevin D.Davis

Kevin D. Davis is a seasoned and results-driven Program/Project Management Professional with a Master's Certificate in Advanced Project Management. With expertise in leading multi-million dollar projects, strategic planning, and sales operations, Kevin excels in maximizing solutions and building business cases. He possesses a deep understanding of methodologies such as PMBOK, Lean Six Sigma, and TQM to achieve business/technology alignment. With over 100 instructional training sessions and extensive experience as a PMP Exam Prep Instructor at KnowledgeHut, Kevin has a proven track record in project management training and consulting. His expertise has helped in driving successful project outcomes and fostering organizational growth.

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