Organizations exist to generate profits or serve the public. To stay competitive, organizations are always examining new ways of creating business, new ways of gaining efficiencies, or new ways of serving their customers. Sometimes laws are passed to force organizations to make their products safer or to make them less harmful to the environment. Projects might result from any of these needs as well as from business requirements, opportunities, or problems. Most projects will fit one of the seven needs and demands described next. Let's take a closer look at each of these areas:
Market demand The demands of the marketplace can drive the need for a project. For example, a bank initiates a project to offer customers the ability to apply for mortgage loans over the Internet because of a drop in interest rates and an increase in demand for refinancing and new home loans.
Strategic opportunity/business need The new phone system talked about earlier that was announced at the quarterly meeting came about as a result of a business need. The CEO, on advice from his staff, was advised that call volumes were maxed on the existing system. Without a new system, customer service response times would suffer, and that would eventually affect the bottom line.
Customer request Customer requests run the gamut. Generally speaking, most companies have customers, and their requests can drive new projects. Customers can be internal or external to the organization. Government agencies don't have external customers per se (we're captive customers at any rate), but there are internal customers within departments and across agencies.
Perhaps you work for a company that sells remittance-processing equipment and you've just landed a contract with a local utility company. This project is driven by the need of the utility company to automate its process or upgrade its existing process. The utility company's request to purchase your equipment and consulting services is the project driver.
Technological advance Many of us own a multifunctioning cell phone that keeps names and addresses handy along with a calendar and a to-do list of some kind. I couldn't live without mine. However, a newer, better version is always coming to market. Satellite communications now allows these devices to also act as GPS units. The introduction of satellite communications is an example of a technological advance. Because of this introduction, electronics manufacturers revamped their products to take advantage of this new technology.
Legal requirement Private industry and government agencies both generate new projects as a result of laws passed during every legislative season. For example, new sales tax laws might require new programming to the existing sales tax system. The requirement that food labels appear on every package describing the ingredients and the recommended daily allowances is another example of legal requirements that drive a project.
Ecological impacts Many organizations today are undergoing a "greening" effort to reduce energy consumption, save fuel, reduce their carbon footprint, and so on. These are examples of ecological impacts that result in projects.
Social need The last need is a result of social demands. For example, perhaps a developing country is experiencing a fast-spreading disease that's infecting large portions of the population. Medical supplies and facilities are needed to vaccinate and treat those infected with the disease. Another example might include manufacturing or processing plants that voluntarily remove their waste products from water prior to putting the water back into a local river or stream to prevent contamination.
Understand the needs and demands that bring about a project for the exam.
All of these needs and demands represent opportunities, business requirements, or problems that need to be solved. Management must decide how to respond to these needs and demands, which will more often than not initiate new projects.
Real World Scenario
Corey is an information technology manager who works for the National Park Service. One warm spring Sunday morning he was leafing through the newspaper and came across an article about new services being offered at some of the national parks. He really perked up when he saw his boss's name describing the changing nature of technology and how it impacted the types of services the public would like to see at the parks. Corey knew that the public had been asking when wireless Internet services would be available in some of the larger parks. He had also been involved in the discussions about the resources needed to make this happen. But the project never seemed to get off the ground. A higher-priority project always took precedence. However, all that changed when Corey saw the next sentence in the paper, which was his boss promising wireless access in two of the largest parks in their region by July 4. It looks like the customer requests finally won out, and Corey just learned he has a new project on his hands.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.