Why do companies do projects?

Why do companies do projects?

What is the motivation behind them?

What is the purpose of a project?

These questions seem far removed from project management, but they are not. Knowing the answers is very important to be able to deal with change requests, or when you have to propose cutbacks or countermeasures because achieving the initial scope is no longer feasible.

The project within the company

Different types of activities can be identified within a company: productive activities, which are those that are part of the company's operations and its value chain; projects, which respond to specific needs; and non-productive or support activities, which are necessary to maintain and manage the company. The question is to see how projects are integrated with the rest of the activities, which is represented in the following graph:

The upper box represents the organization where the activities are executed, which carries out its activity within a certain environment, and has a strategy and objectives. Based on these, the organization identifies opportunities and analyzes them to see which are feasible and profitable.

The approved opportunities are those that give rise to projects, which generate as a result a series of deliverables that are incorporated into the organization's operational activities. And the organization uses them within its normal activity to generate benefits that return to the organization.

Therefore, projects are the way in which companies take advantage of opportunities and incorporate them into their operations to generate profits.

This may not seem to be applicable in the case of engineering companies that carry out projects for third parties; since the difference between projects and operations would not be so clear, and it could be said that a project is done because the client pays for it.

In this case, operations could be seen as the sales department, which detects an opportunity (a customer's need for a project), and invoices deliverables after they have been executed by the project team.

Apart from opportunities due to market needs, we can also find projects that are done in order to comply with new regulations. In this case, complying with regulations will allow the company to continue operations or avoid penalties.

In both cases the chart is still applicable, don't you think?

Why is this important?

As a project manager, you will have to deal with change requests, unforeseen events, delays, cost overruns, etc. Aspects that will force you to change the initial planning, and that may result in the project no longer being able to meet all the constraints or the initial scope.

Therefore, if you know the opportunity behind the project and its motivations, you will be able to prioritize the constraints and characteristics of the initial scope, proposing solutions that do not significantly affect the objective or minimize its impact.

Although in theory it is said that a project is successful when it meets the scope; in practice, if it does not fully meet the scope, but meets the motivations and opportunities behind the project, it is possible to continue talking about a successful project that achieves customer satisfaction.

At this point you may be wondering who defines the opportunity and motivations, and how you can know them in your projects. Well, the answer is by talking to the stakeholders; mainly with the sponsor and the project steering committee in internal projects, or with the client itself in external projects.