Basic process of managing projects

 Introduction

Project management is essential in modern businesses because it creates the right environment for efficiency in project delivery. As such, this paper seeks to highlight the major benefits of project management as well as other aspects of project management.

Describe the basic process of managing investment projects and discuss its merits

As highlighted by ProjectInsight.com (2015), there are 5 basic processes in project management, as follows:

1. Project conception and initiation—this is the stage at which the idea for a project is carefully determined in order to measure its benefits. During this phase, the decision-making team determines whether or not the project can be realistically completed and the extent of expected benefits from its completion. The benefit of this stage is that it gives the go-ahead for any project and cancels out all projects that are considered unfavorable (thus reducing the chances of losses in the future).
2. Project definition and planning—this is the stage at which the project plan, charter, or scope is conceived and put into writing, highlighting the work that needs to be performed. During this phase, a team is set up to prioritize the project, calculate the budget and schedule, and determine the resources needed. The benefit is that it is the budgeting stage, and it helps ensure that all necessary resources are put in place for the successful completion of the project.
3. Project launch or execution: at this stage, resources and tasks are distributed while teams are notified of their responsibilities. This is the right time to usher in vital information related to the project. The benefit is that the project is divided by team, and teams are notified of delivery, which aids in overall project monitoring and delivery.
4. Project performance and control: at this stage, the project status and program are compared with the actual plan in relation to the resources used to perform the scheduled work. In this phase, contingencies can normally be applied in order to ensure that the project does not go adrift. The benefit of this stage is that it allows for control measures and realignment of project designs in order to produce the actual plan.
5. Project close: this is the evaluator phase following project completion and the client’s approval of the project. Experiences are also drawn from the whole project history. The benefit is that it allows for direct measurement of the project outcome in terms of relating the outcome to the actual plan. Additionally, experiences from the whole project process are gathered together at this stage and shared within the team.

Why is it important to further assess projects that have already been deemed profitable?

In accordance with the Oracle White Paper (2009), projects fail once they are not either completed or not capable of meeting their main objectives following completion. Thus, it is always necessary to assess the chances of success with a specific project, but a number of issues can result in these assumptions not being effective in the end. This calls the need for reassessment and there are a number of reasons while projects should be reassessed.

The major reason why projects should be reassessed even after being deemed profitable is because of the effects of optimism and parallelism (Oracle White Paper, 2009). This is because the project managers might be overly optimistic and make the underlying assumptions too positive in the process. Besides, some functions can be too parallel, resulting in exaggerated estimates of optimism. This is a phenomenon referred to as "merge bias" or "nodal bias." This is very common in cases where there is deliberate scheduling of the project with minimal float and common planning techniques.

Conclusion

Project management, as highlighted in the above discussion, is very essential because it creates the right environment for efficient and effective project delivery. However, care should be taken to ensure that projects are not overly optimistic, as this can increase project risks in the process.

a.      Reference

Oracle White Paper (2009). The Benefits of Risk Assessment for Projects, Portfolios, and Businesses. Available at: http://www.oracle.com/us/products/applications/042743.pdf [Accessed on: 25^th April 2015].

Projectinsight.com (2015). 5 Basic Phases of Project Management. Available at: http://www.projectinsight.net/project-management-basics/basic-project-management-phases [Accessed on: 25^th April 2015].