Description
Data in regard to utilizing project management to startup a company in the it industry.
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
109
8 MAJID MAHMOOD
UTILIZING PROJECT MANAGEMENT TO
STARTUP A COMPANY IN THE IT INDUSTRY
ABSTRACT The problem of literature exists in the inter-relation of the 2
fields of Project management and Entrepreneurship. A lot of research is
being done in the field of entrepreneurship and project management but
not in a co-linear or relational methodology. The problem that is being
analyzed by this research is how to implement the principles of project
management to the concept of starting a new business. The finding for this
research was the implementation of WinWin Sprial model to starting a new
company and sustaining it using the WinWin Spiral model.
Keyword: Entrepreneurship, Project management, project management for
entrepreneurship, business creation
Introduction
The new age of business, entrepreneurship is an important aspect that has a
lot of advantages. According to Acs, Arenius, Hay and Minniti (2004), en-
trepreneurship has a lot of advantages including job creation, national eco-
nomic growth because of the export that is being done. The paper structure
is defined in the way that the theoretical concepts in entrepreneurship,
project management are explained first and later on the procedure of start-
ing a company is defined. This leads to the explanation of the proposed
framework to highlight the connection between Project Management and
Entrepreneurship.
What is Entrepreneurship?
A number of studies has been done on the field of entrepreneurship; how-
ever, there remain a lack of a proper definitive definition for it. Gedeon
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
110
(2010) has compiled a list of definitions he considers as prominent or
widely used in the literature. Entrepreneurship according to Draheim
(1972), is the act of founding a new company where none existed before.
Vesper (1982) defines loosely entrepreneurship as “the creation of new
business enterprises by individuals or small groups.” Lumpkin and Dess
(1996) defines it as a “new entity” or an orientation refers to the processes,
practices, and decision?making activities that lead to new entry. Gartner
(1990) defines entrepreneurship as the process by which new organizations
come into existence.
Given these diverse definitions of entrepreneurship, a common thing
can be noticed in them which is the creation of a new venture/company/
organization for different reasons including profits, etc. However another
interesting aspect of notice is not every company succeeds or makes profits.
Ventures close down as well because of the losses they are making and
eventually are left with no liquid capital. As Richtermeyer (2003) said that
the field of entrepreneurship is continuously evolving and expanding. This
is because the dimensions of entrepreneurship are constantly changing. One
example lies in the deployment of internet and companies moving online
for a more globalized business approach which leads them to make more
money without having to invest money heavily in the development of ven-
tures on land foreign to their corporation nationality.
Entrepreneurship in information technology is much different from tra-
ditional entrepreneurship. The reason being it can be innovative or imita-
tive entrepreneurship. Innovation in this context could be characterised as
being when a new solution is devised for which no other solution exists. In
innovation there is a less chance that competitors would exist but another
aspect might be that the clients might have to be trained that the solution is
one of their needs. Imitation is when there is an already existent solution,
its replica is made but in a different manner to portray differently. Imita-
tion might necessary not be an exact replica. But with imitation there are
competitors already existent in the business field.
What is Project Management?
Atkinson (1999) quotes Olsen (1971) defines project management as “the
application of a collection of tools and techniques—such as the CPM and
matrix organization—to direct the use of diverse resources toward the
8 MAJID MAHMOOD
111
accomplishment of a unique, complex, one-time task within time, cost and
quality constraints. Each task requires a particular mix of these tools and
techniques structured to fit the task environment and life cycle (from con-
ception to completion) of the task”. Kuura (2012) refers to the develop-
ment of contemporary project management came into the being in 1950s
which means people started using basic project management in that era.
There is a lot of literature on the project management and how project
management was developed. Project management varies differently for
different industries and different types of projects even though with a basic
framework being almost the same.
Shrnhur (1997) defines project success dimensions by defining 3 levels,
meeting design goals, impact on the customer and benefits to the organiza-
tion which further can be divided into meeting the operational specifica-
tion, time goal, budget goals, and meeting technical specifications. If these
are not met, the project is most likely to fail and leading to a case where
there is no benefit to the organization.
Project Life cycle
According to Field and Keller (1998), Buchanan and Boddy (1992) defines
a project as “A project is a unique venture with a beginning and an end,
conducted by people to meet established goals with parameters of cost,
schedule and quality”. There are a lot of other valid definitions that hold
true for the word project each with a different explanation of the word
project. A project can be considered unique or a further extension of a pre-
vious project. In order to handle projects, a lot of project life cycles have
been research upon and documented.
Other authors like, Schwalbe (2010) define a project as “a temporary
endeavor undertaken to create a unique product, service or result.” The
noticeable thing between the two definitions is that each of them refers to
the project having an ending with the passage of time, let alone the aspect
of the project is completed successfully or the project is failed. The most
important thing from the definition is the concept that projects are done by
people. This implies there has to be a realization of the project requirement
otherwise there is a chance that no project will be done.
Similar to this, a lot of research has been done on project life cycles and
a variety of different cycles have been created, each with a different set of
focus of industry, or type of project. Kendrick (2013)
defines the project
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
112
life cycle as a linear project with the project starting and moving towards a
requirement and planning which is further refined, designed then devel-
oped and at the end tested before the project is ended. In such a model
processes are normally not interepted and changes are hard to make during
the project.
Figure 1: A typical Project life cycle for development projects, Adapted from- Kendrick, Tom- The
Project Management tool kit- Page 143
Another model for project management is the Boehm (1998) defined Win-
Win Spiral Model that uses a cyclic methodology for the successful execu-
tion of complex projects. In a WinWin Spiral model, there are 4 activities
in each stage of the cycle in the project life cycle—as follow:
• Elaborate the process, objectives and constraints
• Evaluate the process with respect to the objectives and identifying
the major source of product risk.
• Elaborate the definition of process
• Plan the next cycle
The purpose of dividing these stages into cycles helps the projects com-
pleted more efficiently and effectively. Another impression can be if there
is a likelihood that the project is going to fail or is not going to perform as
expected, the project can be closed before it utilizes the resources like
money and labor in a negative manner.
Figure 2: Adapted from Boehm, Barry, et al. "Using the WinWin spiral model: a case
study." IEEE Computer 31.7 (1998): 33-44.
8 MAJID MAHMOOD
113
An interesting aspect is the concept if projects is, there are deliverables
after a phase of a project is completed. The Project Management Institute
Inc (2001) defines a few of the deliverables as Project Charter, Project
Management Plan, Resource Requirement, Work Breakdown Structure,
Budget Planning, Risk planning, Stakeholders list and Quality assurance.
These documents are developed with passing time and progress in the pro-
ject. These documents tend to help when the project is being upgraded or
being run in a spiral model.
Starting a business
Even though the procedure for starting a business varies from country to
country but in a very general overview, Gibb (1982), Allan describes the
steps as mentioned in Figure 3. Rather than talking about the legal aspects
which is just one of the activities in the business initiation. The most impor-
tant thing in order to start a business is acquiring motivation and finding a
business idea. But not every idea is a million dollar idea. Ideas can be vali-
dated and a lot of research has been done by prominent management gurus
on how to validate a business idea whether it has a possible business poten-
tial or no. Kim and Renée (2000) proposes the 3 tools of validating a busi-
ness idea are “the buyer utility map”, “the price corridor of mass” and “the
business model guide”. These concepts let one know if there is a possible
potential in an idea or whether at the end of the day it might be unrealistic
and not possible.
Figure 3 Stages of starting a business- Adapted from Gibb, Allan, and John Ritchie. "Understanding
the process of starting small businesses." International Small Business Journal 1.1 (1982): 26-45.
After an idea is validated, the business needs to be registered and all the
legal paper works needs to be done which results into a registered entity
which is ready to do business. Then comes the most important stage of the
survival, because survival of a business plays an important role. If the busi-
ness is not kept to survive, the company will make no money and most
likely fail eventually leading to the company closure. Documentation is
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
114
needed for the business as well, and two of the most important documents
include the business plan and business model canvas. A lot of extensive
research has been done. Sahlman (1997) explains the ways how to write a
successful business plan with things including the people, the opportunity,
the context and risk/rewards. A business plan is a comprehensive docu-
ment explaining almost everything about the business plan. Similarly,
Osterwalder’s (2008), Business model canvas can be used to create a picto-
rial analysis of the business idea including 9 basic building blocks which
summarize almost everything about the business.
Implementation of project life cycle on starting of a new
company
The part of research that is meant to indicate how the interrelation can be
drawn between project management and the starting of a new business
(Entrepreneurship), an application of the project management methodol-
ogy was needed to be applied to the process of starting a new business. The
model was derived from the basic spiral model of Project management and
is illustrated in Figure 4 Project Management in Entrepreneurship (page
16). The spiral was divided into 8 stages in one cycle and the cycle is re-
peated with the progress of time but each time with a difference. The cycle
starts with a specification, motivation that means an individual realizing the
fact that there is an opportunity for a business. After realizing about the
business opportunity is the next stage of planning where there is a business
plan, or documented specifications in the form of a requirement document,
a business plan and a business model canvas. The project charter will be the
business plan. After that, the business idea needs to be validated, and vali-
dation can be done from the methods mentioned by (Chan and Mauborgne,
2000) which can be used to validate a business idea. In an Information
Technology company, resources include human resource, technology re-
source, land resource, etc. Most important being the human resources
which include developers, designers, marketing and management people.
The roles need to be defined here that what resource will do what and how
will the human resources be compensated. Other aspect of resource is the
technological resource planning like the number of machines that would
have to be planned. The budget planning needs to be done as well and the
source budgeting needs to be done. The budget definition also needs to
8 MAJID MAHMOOD
115
identify where will the business funded from, whether an investment ex-
ists, or no. After the resource identification, in the first cycle comes the
negotiation (or execution) of the business. By execution, the meaning of
legally registering the business, starting to build a prototype if the company
is going to offer a product otherwise building a portfolio and coming up
with services that the business will offer. After going through the legal mat-
ters of registration, the legal permissions are granted from the governmen-
tal authorities that the business is legally registered. This makes the com-
pany move towards the birth and survival which means the making money,
getting clients/people to use products or offering those people services.
After this stage comes the profit analysis which means to analyze how was
the company launch and the profit that is being made. If the idea is sustain-
able and a profitable one it will definitely be showing a possibility of profit
if not had a break even yet. While analyzing the profits, there would be
lessons learnt that can be used later. Things that can be done and others
which cannot be done. They need to be documented as well such that it
will help in the future. The last step is the future planning, which includes
what are the possibilities for the next phase of the business which needs to
be documented as well.
Businesses would not stop on the first cycle, businesses are meant to be
sustainable and grow with time eventually making higher profits. After
completion of the first cycle, the second cycle would include the expansion
of the business or the other case being converting the business model to
make it profitable given it is not making any money. From the end of the
first cycle, the business knows what can be done in the future or possibility
a spark was generated because of a possible chance, which than is the moti-
vation for the extension of the business. That motivation is documented in
the business plan as an update which is then validated and the cycle contin-
ues towards the development of that possibility of extension of the busi-
ness. Each time a new motivation comes, this cycle can be revived and fol-
low applying the spiral cycle of project management and giving rise to a
new business.
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
116
Figure 4: Project Management in Entrepreneurship
Conclusion
The two domains of project management and entrepreneurship have a great
domain of knowledge available and a lot of research has already been done
and is being done. However the need of an interconnection with respect to
each other is also essentially becoming important as more entrepreneurs
are coming and the domain of starting new businesses is dramatically
changing. In this era, IT companies are being formed more easily and more
profits are being made from them. The research suggested a possible meth-
odology that can be followed for launching an IT company using a Project
Management model. Further research is highly recommended to enhance
the overall concept. By undertaking further research, I would be develop-
8 MAJID MAHMOOD
117
Gedeon, S. (2010) "What is entrepreneurship?." Entrepreneurial Practice Review,
1 (3), pp. 19-21.
Gibb, A. and John, R. (1982) "Understanding the process of starting small
businesses." International Small Business Journal, 1 (1) pp. 26-45.
Graheim, K. (1972). Factors influencing the rate of formation of technical
companies. In A. Cooper, & J. Komives (Eds.), Technical Entrepreneurship: A
Symposium: 24. Center for Venture Management: Milwaukee, USA.
Guide, A. "PROJECT MANAGEMENT BODY OF KNOWLEDGE
(PMBOK® GUIDE)." Project Management Institute. 2001: PA, USA.
Kendrick, T. (2013) The project management tool kit: 100 tips and techniques
for getting the job done right. AMACOM Div American Management Associa-
tion: NY, USA.
Kim, W. C. and Renée, M. (2000) "Knowing a winning business idea when
you see one." Harvard Business Review, 78 (5), pp. 129-138.
Lumpkin, G., and Dess, G. (1996) Clarifying the entrepreneurial orientation
construct and linking it to performance. Academy of Management Review, 21(1),
pp. 135?172.
Olsen, R. P. (1971) Can project management be defined?, Project Manage-
ment Quarterly, 1971, 2(1), 12 – 14.
Osterwalder, A. (2010) "Business model canvas.", 2010 [online] http://
www.businessmodelgeneration.com.
Richtermeyer, G. (2003). Emerging themes in entrepreneurship research.
Business Research and Information Development Group (BRIDG). Outreach &
extension, 29.
Sahlman, W. A. (1997) How to write a great business plan. Harvard Business
School Press, Cambridge, MA.
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
118
ing more frameworks and mathematical models for the interrelation of
Project Management and Entrepreneurship.
Author’s Brief Bio
Majid Mahmood is an MBA Student in Global Management at Hochschule
Bremen, Bremen, Germany. He holds a Bacheclor degree in Engineering
Science from the Ghulam Ishaq Khan Institute, Topi, Pakistan, with spe-
cialisation in Semi and Super conductors.
References
Acs, Z. J., Arenius, P., Hay, M., and Minniti, M. (2004). Global entrepre-
neurship monitor. Executive Report, London Business School, Babson. Page 33-34.
Atkinson, R. (1999) "Project management: cost, time and quality, two best
guesses and a phenomenon, it’s time to accept other success crite-
ria."International journal of project management 17 (6), pp. 337-342.
Boehm, B. (1988) "Using the WinWin spiral model: a case study." IEEE Com-
puter 31 (7), pp. 33-44.
Buchanan, D. A., & Boddy, D. (1992). The expertise of the change agent:
public performance and backstage activity. Hemel Hempstead, UK: Prentice
Hall.
Draheim, K. (1972). Factors influencing the rate of formation of technical
companies. In A. Cooper, & J. Komives (Eds.), Technical Entrepreneurship: A
Symposium: 24. Center for Venture Management: Milwaukee, USA.
Field, M., and Keller, L. (1998) Project Management. London: International
Thomson Business Press.
Gartner, W. B. (1990) What are we talking about when we talk about entre-
preneurship? Journal of Business Venturing, 5(1), 15?28
8 MAJID MAHMOOD
119
Schwalbe, K. (2010) Information Technology Project Management, Revised.
Cengage Learning, Hampshire, England, UK.
Shrnhur, A. J., Levy, O Dvir, O (1997) "Mapping the dimensions of project
success." Project management journal 28.2, pp. 5-13.
TWO‘CINDERELLAS, A. T. O. (2012). PROJECT MANAGEMENT AND
ENTREPRENEURSHIP. Proceedings “New Dimensions in the Development
of Society 2011”, 154.
Vesper, K. (1982) Introduction and summary of entrepreneurship research. In
C. Kent, D. Sexton, & K. Vesper (Eds.), Encyclopedia of Entrepreneurship.
Englewood Cliffs: Prentice?Hall.
.
doc_735958017.pdf
Data in regard to utilizing project management to startup a company in the it industry.
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
109
8 MAJID MAHMOOD
UTILIZING PROJECT MANAGEMENT TO
STARTUP A COMPANY IN THE IT INDUSTRY
ABSTRACT The problem of literature exists in the inter-relation of the 2
fields of Project management and Entrepreneurship. A lot of research is
being done in the field of entrepreneurship and project management but
not in a co-linear or relational methodology. The problem that is being
analyzed by this research is how to implement the principles of project
management to the concept of starting a new business. The finding for this
research was the implementation of WinWin Sprial model to starting a new
company and sustaining it using the WinWin Spiral model.
Keyword: Entrepreneurship, Project management, project management for
entrepreneurship, business creation
Introduction
The new age of business, entrepreneurship is an important aspect that has a
lot of advantages. According to Acs, Arenius, Hay and Minniti (2004), en-
trepreneurship has a lot of advantages including job creation, national eco-
nomic growth because of the export that is being done. The paper structure
is defined in the way that the theoretical concepts in entrepreneurship,
project management are explained first and later on the procedure of start-
ing a company is defined. This leads to the explanation of the proposed
framework to highlight the connection between Project Management and
Entrepreneurship.
What is Entrepreneurship?
A number of studies has been done on the field of entrepreneurship; how-
ever, there remain a lack of a proper definitive definition for it. Gedeon
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
110
(2010) has compiled a list of definitions he considers as prominent or
widely used in the literature. Entrepreneurship according to Draheim
(1972), is the act of founding a new company where none existed before.
Vesper (1982) defines loosely entrepreneurship as “the creation of new
business enterprises by individuals or small groups.” Lumpkin and Dess
(1996) defines it as a “new entity” or an orientation refers to the processes,
practices, and decision?making activities that lead to new entry. Gartner
(1990) defines entrepreneurship as the process by which new organizations
come into existence.
Given these diverse definitions of entrepreneurship, a common thing
can be noticed in them which is the creation of a new venture/company/
organization for different reasons including profits, etc. However another
interesting aspect of notice is not every company succeeds or makes profits.
Ventures close down as well because of the losses they are making and
eventually are left with no liquid capital. As Richtermeyer (2003) said that
the field of entrepreneurship is continuously evolving and expanding. This
is because the dimensions of entrepreneurship are constantly changing. One
example lies in the deployment of internet and companies moving online
for a more globalized business approach which leads them to make more
money without having to invest money heavily in the development of ven-
tures on land foreign to their corporation nationality.
Entrepreneurship in information technology is much different from tra-
ditional entrepreneurship. The reason being it can be innovative or imita-
tive entrepreneurship. Innovation in this context could be characterised as
being when a new solution is devised for which no other solution exists. In
innovation there is a less chance that competitors would exist but another
aspect might be that the clients might have to be trained that the solution is
one of their needs. Imitation is when there is an already existent solution,
its replica is made but in a different manner to portray differently. Imita-
tion might necessary not be an exact replica. But with imitation there are
competitors already existent in the business field.
What is Project Management?
Atkinson (1999) quotes Olsen (1971) defines project management as “the
application of a collection of tools and techniques—such as the CPM and
matrix organization—to direct the use of diverse resources toward the
8 MAJID MAHMOOD
111
accomplishment of a unique, complex, one-time task within time, cost and
quality constraints. Each task requires a particular mix of these tools and
techniques structured to fit the task environment and life cycle (from con-
ception to completion) of the task”. Kuura (2012) refers to the develop-
ment of contemporary project management came into the being in 1950s
which means people started using basic project management in that era.
There is a lot of literature on the project management and how project
management was developed. Project management varies differently for
different industries and different types of projects even though with a basic
framework being almost the same.
Shrnhur (1997) defines project success dimensions by defining 3 levels,
meeting design goals, impact on the customer and benefits to the organiza-
tion which further can be divided into meeting the operational specifica-
tion, time goal, budget goals, and meeting technical specifications. If these
are not met, the project is most likely to fail and leading to a case where
there is no benefit to the organization.
Project Life cycle
According to Field and Keller (1998), Buchanan and Boddy (1992) defines
a project as “A project is a unique venture with a beginning and an end,
conducted by people to meet established goals with parameters of cost,
schedule and quality”. There are a lot of other valid definitions that hold
true for the word project each with a different explanation of the word
project. A project can be considered unique or a further extension of a pre-
vious project. In order to handle projects, a lot of project life cycles have
been research upon and documented.
Other authors like, Schwalbe (2010) define a project as “a temporary
endeavor undertaken to create a unique product, service or result.” The
noticeable thing between the two definitions is that each of them refers to
the project having an ending with the passage of time, let alone the aspect
of the project is completed successfully or the project is failed. The most
important thing from the definition is the concept that projects are done by
people. This implies there has to be a realization of the project requirement
otherwise there is a chance that no project will be done.
Similar to this, a lot of research has been done on project life cycles and
a variety of different cycles have been created, each with a different set of
focus of industry, or type of project. Kendrick (2013)
defines the project
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
112
life cycle as a linear project with the project starting and moving towards a
requirement and planning which is further refined, designed then devel-
oped and at the end tested before the project is ended. In such a model
processes are normally not interepted and changes are hard to make during
the project.
Figure 1: A typical Project life cycle for development projects, Adapted from- Kendrick, Tom- The
Project Management tool kit- Page 143
Another model for project management is the Boehm (1998) defined Win-
Win Spiral Model that uses a cyclic methodology for the successful execu-
tion of complex projects. In a WinWin Spiral model, there are 4 activities
in each stage of the cycle in the project life cycle—as follow:
• Elaborate the process, objectives and constraints
• Evaluate the process with respect to the objectives and identifying
the major source of product risk.
• Elaborate the definition of process
• Plan the next cycle
The purpose of dividing these stages into cycles helps the projects com-
pleted more efficiently and effectively. Another impression can be if there
is a likelihood that the project is going to fail or is not going to perform as
expected, the project can be closed before it utilizes the resources like
money and labor in a negative manner.
Figure 2: Adapted from Boehm, Barry, et al. "Using the WinWin spiral model: a case
study." IEEE Computer 31.7 (1998): 33-44.
8 MAJID MAHMOOD
113
An interesting aspect is the concept if projects is, there are deliverables
after a phase of a project is completed. The Project Management Institute
Inc (2001) defines a few of the deliverables as Project Charter, Project
Management Plan, Resource Requirement, Work Breakdown Structure,
Budget Planning, Risk planning, Stakeholders list and Quality assurance.
These documents are developed with passing time and progress in the pro-
ject. These documents tend to help when the project is being upgraded or
being run in a spiral model.
Starting a business
Even though the procedure for starting a business varies from country to
country but in a very general overview, Gibb (1982), Allan describes the
steps as mentioned in Figure 3. Rather than talking about the legal aspects
which is just one of the activities in the business initiation. The most impor-
tant thing in order to start a business is acquiring motivation and finding a
business idea. But not every idea is a million dollar idea. Ideas can be vali-
dated and a lot of research has been done by prominent management gurus
on how to validate a business idea whether it has a possible business poten-
tial or no. Kim and Renée (2000) proposes the 3 tools of validating a busi-
ness idea are “the buyer utility map”, “the price corridor of mass” and “the
business model guide”. These concepts let one know if there is a possible
potential in an idea or whether at the end of the day it might be unrealistic
and not possible.
Figure 3 Stages of starting a business- Adapted from Gibb, Allan, and John Ritchie. "Understanding
the process of starting small businesses." International Small Business Journal 1.1 (1982): 26-45.
After an idea is validated, the business needs to be registered and all the
legal paper works needs to be done which results into a registered entity
which is ready to do business. Then comes the most important stage of the
survival, because survival of a business plays an important role. If the busi-
ness is not kept to survive, the company will make no money and most
likely fail eventually leading to the company closure. Documentation is
RESEARCH PAPERS ON KNOWLEDGE, INNOVATION AND ENTERPRISE
114
needed for the business as well, and two of the most important documents
include the business plan and business model canvas. A lot of extensive
research has been done. Sahlman (1997) explains the ways how to write a
successful business plan with things including the people, the opportunity,
the context and risk/rewards. A business plan is a comprehensive docu-
ment explaining almost everything about the business plan. Similarly,
Osterwalder’s (2008), Business model canvas can be used to create a picto-
rial analysis of the business idea including 9 basic building blocks which
summarize almost everything about the business.
Implementation of project life cycle on starting of a new
company
The part of research that is meant to indicate how the interrelation can be
drawn between project management and the starting of a new business
(Entrepreneurship), an application of the project management methodol-
ogy was needed to be applied to the process of starting a new business. The
model was derived from the basic spiral model of Project management and
is illustrated in Figure 4 Project Management in Entrepreneurship (page
16). The spiral was divided into 8 stages in one cycle and the cycle is re-
peated with the progress of time but each time with a difference. The cycle
starts with a specification, motivation that means an individual realizing the
fact that there is an opportunity for a business. After realizing about the
business opportunity is the next stage of planning where there is a business
plan, or documented specifications in the form of a requirement document,
a business plan and a business model canvas. The project charter will be the
business plan. After that, the business idea needs to be validated, and vali-
dation can be done from the methods mentioned by (Chan and Mauborgne,
2000) which can be used to validate a business idea. In an Information
Technology company, resources include human resource, technology re-
source, land resource, etc. Most important being the human resources
which include developers, designers, marketing and management people.
The roles need to be defined here that what resource will do what and how
will the human resources be compensated. Other aspect of resource is the
technological resource planning like the number of machines that would
have to be planned. The budget planning needs to be done as well and the
source budgeting needs to be done. The budget definition also needs to
8 MAJID MAHMOOD
115
identify where will the business funded from, whether an investment ex-
ists, or no. After the resource identification, in the first cycle comes the
negotiation (or execution) of the business. By execution, the meaning of
legally registering the business, starting to build a prototype if the company
is going to offer a product otherwise building a portfolio and coming up
with services that the business will offer. After going through the legal mat-
ters of registration, the legal permissions are granted from the governmen-
tal authorities that the business is legally registered. This makes the com-
pany move towards the birth and survival which means the making money,
getting clients/people to use products or offering those people services.
After this stage comes the profit analysis which means to analyze how was
the company launch and the profit that is being made. If the idea is sustain-
able and a profitable one it will definitely be showing a possibility of profit
if not had a break even yet. While analyzing the profits, there would be
lessons learnt that can be used later. Things that can be done and others
which cannot be done. They need to be documented as well such that it
will help in the future. The last step is the future planning, which includes
what are the possibilities for the next phase of the business which needs to
be documented as well.
Businesses would not stop on the first cycle, businesses are meant to be
sustainable and grow with time eventually making higher profits. After
completion of the first cycle, the second cycle would include the expansion
of the business or the other case being converting the business model to
make it profitable given it is not making any money. From the end of the
first cycle, the business knows what can be done in the future or possibility
a spark was generated because of a possible chance, which than is the moti-
vation for the extension of the business. That motivation is documented in
the business plan as an update which is then validated and the cycle contin-
ues towards the development of that possibility of extension of the busi-
ness. Each time a new motivation comes, this cycle can be revived and fol-
low applying the spiral cycle of project management and giving rise to a
new business.
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Figure 4: Project Management in Entrepreneurship
Conclusion
The two domains of project management and entrepreneurship have a great
domain of knowledge available and a lot of research has already been done
and is being done. However the need of an interconnection with respect to
each other is also essentially becoming important as more entrepreneurs
are coming and the domain of starting new businesses is dramatically
changing. In this era, IT companies are being formed more easily and more
profits are being made from them. The research suggested a possible meth-
odology that can be followed for launching an IT company using a Project
Management model. Further research is highly recommended to enhance
the overall concept. By undertaking further research, I would be develop-
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ing more frameworks and mathematical models for the interrelation of
Project Management and Entrepreneurship.
Author’s Brief Bio
Majid Mahmood is an MBA Student in Global Management at Hochschule
Bremen, Bremen, Germany. He holds a Bacheclor degree in Engineering
Science from the Ghulam Ishaq Khan Institute, Topi, Pakistan, with spe-
cialisation in Semi and Super conductors.
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