The next question that can be asked is ‘Why does one need project management?’ What is the difference between project management and management of any other business or enterprise? Why has project management taken off so dramatically in the last 20 years?

The answer is that project management is essentially management of change, while running a functional or ongoing business is managing a continuum or ‘business-as-usual’.

Project management is not applicable to running a factory making sausage pies, but it will be the right system when there is a requirement to relocate the factory, build an extension, or produce a different product requiring new machinery, skills, staff training, and even marketing techniques.

It is immediately apparent therefore that there is a fundamental difference between project management and functional or line management where the purpose of management is to continue the ongoing operation with as little disruption (or change) as possible. This is reflected in the characteristics of the two types of managers. While the project manager thrives on and is proactive to change, the line manager is reactive to change and hates disruption. In practice, this often creates friction and organizational problems when a change has to be introduced.

Projects may be undertaken either to generate revenue, such as introducing methods for improving cash flow, or be capital projects that require additional expenditure and resources to introduce a change to the capital base of the organization. It is to this latter type of project that the techniques and methods described in this book can be most easily applied.

Fig. 1.1 shows the types of operations suitable for a project type of organization which are best managed as a functional or ‘business-as-usual’ organization.

Both types of operations have to be managed, but only the ones in column (A) require project-management skills.

It must be emphasized that the suitability of an operation being run as a project is independent of size. Project-management techniques are equally suitable for building a cathedral or a garden shed. Moving house, a very common project for many people, lends itself as effectively to project-management techniques such as tender analysis and network analysis as relocating a major government department from the capital city to another town. There just is no upper or lower limit to projects!

As stated in the definition, a project has a definite starting and finishing point and must meet certain specified objectives.

Broadly these objectives, which are usually defined as part of the business case and set out in the project brief, must meet three fundamental criteria:

These criteria can be graphically represented by the well-known project triangle (Fig. 1.2). Some organizations like to substitute the word ‘quality’ with ‘performance’, but the principle is the same – the operational requirements of the project must be met, and met safely.

In certain industries, such as airlines, railways, and mining, the fourth criterion, safety, is considered to be equally important, if not more so. In these organizations, the triangle can be replaced by a diamond now showing the four important criteria (Fig. 1.3).

The order of priority given to any of these criteria is dependent not only on the industry but also on the individual project. For example, in designing and constructing an aircraft, motor car or railway carriage, safety must be paramount. The end product may cost more than budgeted or it may be late in going into service, and certain quality requirements in terms of comfort may have to be sacrificed, but under no circumstances can safety be compromised. Airplanes, cars and railways must be safe under all operating conditions.

The following (rather obvious) examples show where different priorities on the project triangle (or diamond) apply.

Not only must safe practices be built into every project, but constant monitoring is an essential element of a safety policy. To that extent, it could be argued that all projects are safety-bound, since, if it became evident after an accident that safety was sacrificed for speed or profitability, some or all of the project stakeholders could find themselves in real trouble, even in jail. This is true for almost every industry, especially agriculture, food/drink production and preparation, pharmaceuticals, chemicals, toy manufacture, aircraft production, motor vehicle manufacture and, of course, building and construction.

A serious accident that may kill or injure people will not only cause anguish among the relatives, but, while not necessarily terminating the project, could very well destroy the company. For this reason the ‘S’ symbol when shown in the middle of the project-management triangle gives more emphasis of its importance (see Fig. 1.2).

While the other three criteria (Cost, Time and Quality/Performance) can be juggled by the project manager to suit the changing requirements and environment of a project, safety cannot, under any circumstances, be compromised. As any project manager knows, the duration (time) may be reduced by increasing resources (cost), and cost may be saved by sacrificing quality or performance, but any diminution of safety can quickly lead to disaster, death and even the closure of an organization. The catastrophic explosions on the Piper Alpha gas platform in the North Sea in July 1988 killed 167 men and cost millions of dollars to Occidental and its insurers, and the explosion at the Buncefield, England, oil depot in 2009 caused massive destruction of its surroundings and huge costs to Total Oil Co. Additionally, the explosion on its Texas City refinery in March 2005, which killed 15 men and injured 170, and the blowout of the Deepwater Horizon drilling rig in the Gulf of Mexico in April 2010, causing 11 fatalities, have seriously damaged the reputation of BP and resulted in a considerable drop in its share price. In the transport industry, the series of railway accidents in 2000 resulted in the winding up of British Rail and subsequently one of its main contractors. More recently, Toyota had to recall millions of cars to rectify an unsafe breaking and control system, after which Mr. Toyoda, the Chairman of the company, publicly stated that Toyota’s first priority is safety, the second is quality, and the third is volume (quantity). These occurrences clearly show that safety must head the list of priorities for any project or organization.

The priorities of the other three criteria can of course change with the political climate or the commercial needs of the client, even within the life cycle of the project, and therefore the project manager has to constantly evaluate these changes to determine the new priorities. Ideally, all the main criteria should be met (and indeed this is the case for many well-run projects), but there are times when the project manager, with the agreement of the sponsor or client, has to make difficult decisions to satisfy the best interests of most, if not all, the stakeholders.

However, the examples given earlier highlight the importance of ensuring a safe operating environment, even at the expense of the other criteria. It is important to note that while a project manager can be reprimanded or dismissed for not meeting any of the three ‘corner criteria’, the one transgression for which a project manager can actually be jailed is not complying with the provisions of the Health and Safety regulations.

If one were to list the four project-management criteria in the order of their importance, the sequence would be safety, performance, time and cost, which can be remembered using the acronym SAPETICA. The rationale for this order is as follows: