What is project management? Phases, roles and methods explained

Project management is the application of knowledge, skills, tools and techniques to project activities so that the project meets its requirements. A project is temporary work with a defined start and end that produces a unique product, service or result, which is what separates it from operations that run continuously. In practice a project manager plans the work, coordinates the people doing it, keeps scope, time, cost and risk under control, and closes the project once the result has been accepted. Both definitions are PMI's long-standing wording. PMI: basic project and program definitions

The definition is short. The difficulty is in the word "requirements": they belong to a sponsor, users, operations, finance and often an outside party such as a card scheme or regulator, and they do not always agree.

What is a project, and how is it different from operations?

PMI's material contrasts the two directly: operations are ongoing and repetitive, while projects are temporary and unique. The UK's Association for Project Management (APM) uses similar language, describing a project as a unique, transient endeavor undertaken to bring about change and achieve planned objectives. APM: project management glossary

In a payments business the line is usually easy to see:

The hand-off between the two is where projects often go wrong. A project ends when the receiving operations team has accepted the result and can run it, not when the last ticket is closed.

What are the phases of a project?

PMI's PMBOK Guide has long organized project work into five process groups: initiating, planning, executing, monitoring and controlling, and closing. The seventh edition stopped presenting the guide around them, but PMI's FAQ confirms process groups can still be used and treats them as one of the models in the guide. PMI: PMBOK Guide FAQ The eighth edition is organized around six principles and seven performance domains (governance, scope, schedule, finance, stakeholders, resources and risk), and PMI says it reintroduces process guidance in a non-prescriptive form. PMI: PMBOK Guide

The five groups remain the clearest way to explain what happens:

Process groups are not the same as phases. A project split into phases, for example design, build and rollout, runs planning, executing and controlling inside each phase. Monitoring and controlling runs from the first week to the last. The project charter template covers the initiating step in detail.

What does a project manager own?

A project manager is accountable for delivering the agreed result within the agreed constraints. In most organizations that covers:

• Scope and change control. Keeping a baseline and making every change a decision. See how to handle change requests.
• Schedule. Sequencing work, finding the path that sets the end date and forecasting honestly.
• Budget tracking. Comparing spend and forecast with the approved budget.
• Risks, issues and dependencies. Keeping them visible and escalating before they become late. RAID logs and steering decisions shows the records.
• Stakeholder communication. Reporting progress, decisions needed and changes to forecast.
• Acceptance and closure. Agreeing acceptance criteria early and closing only when they are met.

What a project manager usually does not own: the business case and its benefits (the sponsor), what the product should do (the product manager), technical design (engineering) and whether a control is adequate (risk and compliance owners).

PMBOK vs PRINCE2 vs agile: what is the difference?

They are different kinds of thing, which is why "which one should we use" is often the wrong question.

Sources: PMI: PMBOK Guide, PeopleCert: AXELOS acquisition, The 2020 Scrum Guide.

PRINCE2 started as a UK government method; the National Archives record of the government's PRINCE2 site describes its origins in 1989 as the standard approach for central government IT projects. The National Archives: OGC PRINCE2 website As a general pattern, PRINCE2 is common in UK and European organizations, PMI's vocabulary is the more common reference point in the United States, and Germany also has a strong IPMA tradition through its national association, GPM. The PRINCE2 vs PMP comparison covers the certifications, and agile vs waterfall vs hybrid covers how to choose a delivery approach.

A payments project, phase by phase (illustrative)

This example is illustrative. An acquirer wants to offer a local bank-transfer payment method to its e-commerce merchants in one market.

• Initiating. The head of acquiring sponsors the project. The charter states the objective (merchants can accept the method at checkout and receive it in settlement), what is out of scope (subscriptions, payouts), the sponsor's budget and the project manager's authority.
• Planning. The project manager learns that the payment method's operator has a fixed certification window. Planning works backward from it: build, internal testing, certification, pilot merchants, general availability. Finance adds a requirement that the method appears correctly in merchant settlement reports.
• Executing. Engineering builds the integration against the operator's sandbox; operations writes the exception runbook; support is trained.
• Monitoring and controlling. The operator changes a status code mid-project. The project manager assesses the effect on the integration, reconciliation and the runbook, and brings a change decision to the sponsor rather than absorbing it quietly.
• Closing. Certification is passed, pilot merchants settle correctly for an agreed period, operations and finance accept the service, and the project team is released.

A longer worked case, with real-world structure but invented details, is the payment market-launch program.

Where does project management stop and program management start?

When a change needs several related projects and ongoing business activities to work together, it is usually run as a program. PMI defines a program as related projects, subsidiary programs and program activities managed in a coordinated way to obtain benefits not available from managing them individually. PMI: understanding programs and projects Projects deliver outputs; programs are judged on the combined benefit. Program vs project management explains the difference with a payout example.

FAQ

What is project management in simple terms?

Planning, organizing and controlling a temporary piece of work so it delivers an agreed result on an agreed timeline and budget, then handing that result over to the people who will run it.

What are the five phases of project management?

The commonly cited five are PMI's process groups: initiating, planning, executing, monitoring and controlling, and closing. Strictly they are groups of activity rather than phases, and several of them repeat within each phase of a larger project.

What is the difference between a project and operations?

A project is temporary and produces a unique result. Operations are ongoing and repeat the same service. Building a new settlement integration is a project; running settlement every day is operations.

Is PRINCE2 or PMBOK better?

Neither is better in general. PMBOK is a guide you tailor; PRINCE2 is a defined method with set roles and stages. Organizations often use PRINCE2 governance or PMBOK vocabulary with agile delivery inside.

Do project managers need a certification?

Not to do the job, but many employers screen for one. As a general pattern the PMP appears more often in US job listings and PRINCE2 in UK and European ones, so check the listings you are targeting. See is the PMP worth it?.