# What Is Project Management and What Are the Types?

![Project Management](https://www.investopedia.com/thmb/QYWqTkyDW-yfpVsjmAP0Mf2bw2Y=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/project-management.asp-Final-0c4cd7f77aad40228e7311783c27f728.png)

*Companies in construction, engineering, manufacturing, finance, healthcare, and IT ulitilze project management. — Investopedia / Theresa Chiechi*

> **Definition**
>
> Project management is the organization of a company's resources to move a specific task toward completion.

## What Is Project Management?

Project management is all of the coordination across personnel, finances, technology, and intellectual property to make things happen. As to operations management that focuses more day-to-day activities, project management oversees larger deliverables (though it often breaks that larger project into shorter-term tasks).

### Key Takeaways

*   On a very basic level, the five main stages of project management includes the planning, initiation, execution, monitoring, and closing of a project.
*   Many different types of project management methodologies and techniques exist, including traditional, waterfall, agile, and lean.
*   Project management is used across industries and is an important part of the success of construction, engineering, and IT companies.

## Understanding Project Management

Generally speaking, the project management process includes the following stages: planning, initiation, execution, monitoring, and closing. We'll discuss each of those stages in more depth later in this article.

Project management is often associated with fields in engineering and construction and, more lately, healthcare and [information technology](https://www.investopedia.com/terms/i/information-management-technology-imt.asp) (IT), which typically have a complex set of components that have to be completed and assembled in a set fashion to create a functioning product.

No matter the industry, [project managers](https://www.investopedia.com/articles/professionals/113015/project-manager-career-path-qualifications.asp) tend to have roughly the same job: to help define the goals and objectives of the project and determine when the various project components are to be completed and by whom. They also create quality control checks to ensure completed components meet a certain standard.

> **Important**
>
> From start to finish, every project needs a plan that outlines how things will get off the ground, how they will be built, and how they will finish.

Every project usually has a budget and a time frame. Project management uses a [type of triage process](https://www.investopedia.com/terms/t/triage.asp) to keep everything moving smoothly, on time, and on budget. That means when the planned time frame is coming to an end, the project manager may keep all the team members working on the project to finish on schedule. Many types of project management have been developed to meet the specific needs of certain industries or types of projects. Three of those types are waterfall, agile, and lean.

## Types of Project Management

### Waterfall Project Management

This is similar to traditional project management but includes the caveat that each task needs to be completed before the next one starts. Steps are linear and progress flows in one direction—like a waterfall. Because of this, attention to task sequences and timelines is very important in this type of project management. Often, the size of the team working on the project will grow as smaller tasks are completed and larger tasks begin.

### Agile Project Management

The computer software industry was one of the first to use this methodology. With the basis originating in the 12 core principles of the Agile Manifesto, agile project management is an iterative process focused on the continuous monitoring and improvement of [deliverables](https://www.investopedia.com/terms/d/deliverables.asp). At its core, high-quality deliverables are a result of providing customer value, team interactions, and adapting to current business circumstances.

Agile project management does not follow a sequential stage-by-stage approach. Instead, phases of the project are completed in parallel to each other by various team members in an organization. This approach can find and rectify errors without having to restart the entire procedure.

### Lean Project Management

This methodology is all about avoiding waste, both of time and of resources. The main idea is to create more value for customers with fewer resources. When managing a project with this approach, the goal is similar to that of the [lean enterprise](https://www.investopedia.com/terms/l/lean-enterprise.asp) production principle. The only resources that will be used on the project are those that directly contribute to its successful completion.

There are many more methodologies and types of project management than listed here, but these are some of the most common. The type used depends on the preference of the project manager or the company whose project is being managed.

### Kanban Project Management

Kanban is a highly visual and intuitive project management methodology designed to optimize workflow and enhance productivity. At its core, Kanban relies on a Kanban board, a visual representation of the project's tasks and their status. Tasks are depicted as cards that move through different stages of the workflow, typically represented as columns on the board, such as "to do," "in progress," and "done."

As work progresses, team members move cards across the board, providing real-time visibility into the status of each task and the overall project. By visualizing work in this way, Kanban promotes transparency, collaboration, and efficiency, allowing teams to identify bottlenecks, prioritize tasks, and maintain a steady flow of work.

### Six Sigma Project Management

Perhaps considered more of a process improvement tool, Six Sigma can still be used in project management. Six Sigma is a rigorous and data-driven approach to process improvement that aims to minimize defects and variability within organizational processes.

Six Sigma utilizes a structured methodology known as DMAIC: Define, Measure, Analyze, Improve, and Control. In the define phase, project goals and objectives are clarified, and key metrics are established to measure process performance. The Measure phase involves collecting relevant data and analyzing process performance against established metrics to identify areas for improvement.

In the Analyze phase, root causes of defects or variations are identified through statistical analysis and data-driven techniques. Once root causes are understood, the Improve phase focuses on implementing targeted solutions to address identified issues and optimize process performance. Finally, the Control phase involves establishing controls and monitoring systems to sustain improvements over time, ensuring that processes remain stable and continue to meet desired performance levels.  

### Scrum Project Management

Scrum is a popular agile framework designed to enhance team collaboration and deliver value iteratively. Scrum breaks down project work into manageable units called sprints, usually lasting between one to four weeks. Each sprint begins with a planning session where the team selects a set of tasks from the product backlog to complete during the sprint. Once the sprint starts, the team works collaboratively to achieve the sprint goal, holding daily stand-up meetings to discuss progress, address challenges, and adapt as needed.

Throughout the sprint, Scrum teams focus on delivering incremental value, often producing a potentially shippable product increment by the end of each sprint. After the sprint, the team conducts a sprint review to demonstrate the completed work to stakeholders and gather feedback.

## Steps of Project Management

Different project management frameworks may identify more or less steps. In general, there are five stages of project management, each discussed briefly below.

### Phase 1: Initiation

The initiation phase serves as the genesis of the project, where an idea is nurtured into a clear vision. It involves brainstorming, [feasibility studies](https://www.investopedia.com/terms/f/feasibility-study.asp), and refining the project concept to align with organizational goals and stakeholder needs. In the initiation stage, project objectives are defined, along with the scope of work and the desired outcomes.

### Phase 2: Planning

Planning is the phase where the blueprint for the project is crafted. Planning involves breaking down the project into manageable tasks, sequencing them logically, estimating resources, and developing a comprehensive project plan.

Planning usually entails some sort of resource allocation tasks. Resource allocation ensures that the necessary people, materials, and budget are available when needed. Risk management identifies potential threats when those resources may not be available at the right time or quantity.

### Phase 3: Execution

The execution phase is where the project plan comes to life, and the project team swings into action. Tasks are assigned, and the project team members collaborate to bring the project deliverables to fruition. [Quality assurance](https://www.investopedia.com/terms/q/quality-control.asp) processes are implemented to verify that project deliverables meet the specified quality standards. The execution phase is the period of intense activity as the project potentially visibly progresses toward its goals.

### Phase 4: Monitoring

Once the project is underway, the monitoring phase involves tracking project performance against the plan, identifying any deviations or issues, and taking corrective action to bring the project back on course. Change management processes are implemented to address any changes to the project scope, schedule, or resources. Project managers use this phase to tackle any obstacles that come up (i.e. late deliveries, personnel being unavailable, etc.).

### Phase 5: Closing

The closing phase marks the culmination of the project journey. Loose ends are tied, and hopefully, accomplishments are celebrated. In the closing phase, the final deliverables are handed over to the customer or end user, and any remaining administrative tasks, such as contract closure or financial reconciliations, are completed. It's usually a good idea to debrief on "lessons learned" to implement better processes or project management techniques for future similar projects.  

## Example of Project Management

Let's say a project manager is tasked with leading a team to develop software products. They begin by identifying the [scope](https://www.investopedia.com/terms/s/scope.asp) of the project. They then assign tasks to the project team, which can include developers, engineers, technical writers, and quality assurance specialists. The project manager creates a schedule and sets deadlines.

Often, a project manager will use visual representations of workflow, such as [Gantt charts](https://www.investopedia.com/terms/g/gantt-chart.asp) or [PERT charts](https://www.investopedia.com/terms/p/pert-chart.asp), to determine which tasks are to be completed by which departments. We'll touch on visualizations in the next section. They set a budget that includes sufficient funds to keep the project within budget even in the face of unexpected contingencies. The project manager also makes sure the team has the resources it needs to build, test, and deploy a software product.

When a large IT company acquires smaller companies, a key part of the [project manager's job](https://www.investopedia.com/articles/wealth-management/021616/project-manager-job-description-average-salary.asp) is to integrate project team members from various backgrounds and instill a sense of group purpose about meeting the end goal. Project managers may have some technical know-how but also have the important task of taking high-level corporate visions and delivering tangible results on time and within budget.

## Project Management Tools

To help with organizing and staying on top of tasks, the industry of project management usually leverages a handful of tools. These tools have been touched on throughout this article, but we'll call them out more specifically now. Note that projects that differ in size or scope may call for additional tools, and some smaller projects may be able to do without some of these tools altogether.

*   **Project management software** provides a digital platform for organizing, planning, and tracking project activities. Some more common project management software tools include Microsoft Project, Asana, Trello, or Jira.
*   **Communication tools** facilitate real-time collaboration and communication among project teams, stakeholders, and project managers. For example, Slack is a popular messaging platform that lets team members to communicate through channels, direct messages, and file sharing. Other examples include Microsoft Teams or Zoom.
*   **Project managers** usually rely on document management systems to store, organize, and share project documents. These repositories can range from SharePoint, Google Drive, or DropBox. Document management systems ensure that team members have access to the latest project documentation.
*   For companies that want to know what time is being spent on what task, **time-tracking software** allows team members to record what they've been up to. Platforms like Harvest offer time tracking, expense tracking, and invoicing features, helping project managers monitor project progress. This may be really important for some projects, especially if items are being billed to a client. Another example of this type of tool is Toggl.
*   Last, project management entails **risk management tools**. Something like Risk Register can help identify potential risks, their likelihood, and their potential impact on project objectives. Meanwhile, internal model simulations like [Monte Carlo](https://www.investopedia.com/terms/m/montecarlosimulation.asp) can analyze probability distributions.  
    

## Project Management vs. Program Management

Program management and project management are both essential disciplines within the field of organizational management. They do serve distinct purposes and involve different responsibilities.

Project management focuses on the successful delivery of specific, time-bound initiatives. A project is more often a temporary endeavor undertaken to create a unique product, service, or result. On the other hand, [program management](https://www.investopedia.com/terms/p/program-manager.asp) involves the oversight of multiple related initiatives that collectively contribute to achieving strategic organizational objectives.

As opposed to a project, a program is a collection of projects. Program managers are responsible for aligning individual projects with the organization's strategic goals, and this entails managing interdependencies between projects. For example, a company may sell an entire suite of options for smart technology devices. Program management would ensure that each device (smart light bulbs, smart thermostats, smart security cameras, etc.) would align with larger company initiatives. Project management would ensure optimal management of future products.

## What Is Project Management?

Project management is the planning, execution, and monitoring of a series of tasks that have an end goal. Companies embark on project management to achieve a certain process, making sure the proper steps are taken at the right time. This may relate to the company's operations (i.e. moving from one office building to another) or the company's business model (i.e. a technology firm crafting a new software product).

## Why Is Project Management Important?

Project management ensures that large deliverables are executed properly. Instead of focusing on one large end product, project management usually documents, evaluates, and monitors a series of smaller, more manageable tasks that come together to make something bigger possible. Project management is important because it ensures end goals are achieved.

## What Are Examples of Project Types?

A common example of a project would be product development. Multiple departments are involved in creating the product, marketing it, selling it, and more. The team that designs a project is different from the teams that manufacture, market, or sell the product. As part of a project, each of these teams would be working with a project manager who helps move the product development from one stage to the next.

## What Makes a Good Project Plan?

Communication is key to a good project plan. Each team's responsibilities should be detailed with a goal, a time frame, and resources available, for example. Visual explanations such as Gantt charts also are helpful. These are bar graphs that can show each stage of a project and, for example, the time when that stage will take place. This is just one example as the best way to outline a plan for those involved depends on the scope and details of the plan.

## The Bottom Line

Project management is an important part of bringing different teams or different departments together to achieve a singular goal. If creating a product, for example, someone needs to design it, someone needs to build it, someone needs to test it, someone needs to market it, etc. The project manager helps define the ultimate goal of the project and set forth a timeline for how and when that project will be achieved. That way, for example, product testers and product marketers can know what to expect and when to expect it—as well as what they are expected to achieve when the project reaches their respective stages.

> **Article Sources**
>
> 1.  Agile Manifesto. "[Manifesto for Agile Software Development](http://agilemanifesto.org/)."