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What is Project Planning? Steps, Process, Importance, Tools

17th May, 2024
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    What is Project Planning? Steps, Process, Importance, Tools

    There is a golden adage that says - "you don't plan to fail but you fail to plan"; well, it holds pretty much the same importance in project management as it does in all aspects of life. Project planning is quintessential to the project and projects that are not planned well result in unwanted overheads or at times sunk costs which result in pressures on the execution of the project and often escalate situations out of control for the project manager. 

    What is Project Planning in Project Management?  

    Project planning or project management planning is the foundation and most important stage of the project management life-cycle. The project planning activity sets the project foundations by base-lining the project scope, schedule, quality standards, objectives, and goals. Planning typically involves creating a document with all project information that comprises the respective tasks, assignee's, and areas of responsibility.

    A project plan usually includes management plans for all areas of the project viz - integration, scope, schedule, cost, quality, resources, communication, risk, procurement, and stakeholders. Creating a consolidated project plan can be done manually or with the help of automated project management software such as Agile Central, Jira, Asana, Wrike, nTask, etc. Creating a comprehensive project plan and envisioning a concrete project execution strategy can streamline and strengthen the project process and ensure successful project execution and delivery. 

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    Why is Project Planning Important?  

    In a formal project management life cycle, projects begin with the project charter providing authority to the project manager to utilize organizational resources and assets for the project. A lot of novice professionals may at this point question - what is project planning & why is it important? Here is where the importance of the project planning phase comes into the picture as planning goes a few steps ahead and guides the project manager in strategising: 

    • How the project will move ahead i.e. how to plan a project’s activities,
    • What kind of resources will be engaged at what duration,
    • How unforeseen situations will be handled, and finally,
    • What will be the baselines against which progress will be measured and reported 

    The planning process in project management forms the basis of the next project phases i.e. execution, monitoring & controlling closure, and also stipulates how the project team will pursue the goals outlined in the business case and project charter. Project planning in project management is also important from a cost-saving perspective as any project can easily run into unknowns, environmental challenges, and scope creep that haunt the completion and delivery of any/all types of projects. It is only effective project planning that provides the required structure and foresight, thereby helping eliminate wasteful tasks and patterns to optimize efficiency and execution. 

    Types of Project Planning  

    Project planning can be of various types depending on the objective, scope, and purview of the activity in consideration. The 3 broad categories of planning include: 

    • Vertical Planning - involves creating a detailed hourly plan to roll up to the day and is also known as daily planning as it is done on that particular day; 
    • Horizontal Planning - involves creating a plan for the day as a whole instead of focusing on every hour and can be done weekly or monthly as well; 
    • Joint Planning - as the name suggests, involves both horizontal and vertical planning i.e. planning the tasks for the day as well as the week to have a bird's eye view and also a detailed plan at the same time. Joint planning requires careful consideration of the task duration and order of items, to sequence activities and complete them. 

    What are the Components of a Project Plan?  

    • Scope - Project scope includes the stakeholder requirements, deliverables, and goals that attribute to the project's success and completion. 
    • Budget - Budget allocations define which resources will be aligned to the particular project activities based on their priority and requirements. Budget planning involves the allocation of people, processes, and technology per project needs.
    • Timeline - Project planning involves defining timelines to the scope and aligning project tasks and activities, creating schedules with milestones, and tracking progress. 

    Together, these 3 components viz, scope, budget, and timeline determine what the project will accomplish, how much will be spent on the project and when will the project be delivered and completed and form the foundation for an effective project planning process. 

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    Project Management Planning Techniques  

    Project management planning techniques are what put the whole project planning process in project management into real and practical action. They help formulate the roadmap with milestones, deliverables, and task-level action plan to create the project deliverables and complete the project successfully. While there may be many different techniques that project managers may use, each of them has its impact on the project outcomes and may be used at different times during the project. 

    1.  SMART Goals 

    Goal setting is the first step in the project planning methodology and entails creating an outline of the project outcome to define what steps need to be completed and what activities need to be performed to achieve the desired outcome. In this process, the goals that are defined should have the following attributes: 

    • Specific - should be clear and concise to be achieved 
    • Measurable - should be quantifiable and not open to interpretation 
    • Attainable - should be realistic and feasible 
    • Relevant - should align with the overall business objectives 
    • Time-bound - should have a deadline or time-limit

    2. Work Breakdown Structure (WBS) 

    WBS is what defines how the overall project goals will be broken down into unit-level tasks/activities that will help create project deliverables to achieve project outcomes. It is essentially a visual representation of project tasks and activities presented in a hierarchical format. Creating a WBS involves breaking up high-level goal statements into doable tasks and activities to their respective unit level and allocating resources to the WBS items to create the outlined deliverables. There is also a WBS dictionary that augments the definition, break-up, and scope of work packages i.e. items in the WBS chart.

    3. Cost Breakdown Structure 

    This is an extension of the Work Breakdown Structure (WBS) and is a hierarchical representation of costs at various levels of the WBS. CBS represents the cost of components in the WBS. It is a useful tool for structuring project financial management and the application of cost controls to track and manage project costs. 

    4. Action Priority Matrix 

    This is a prioritization tool that determines the sequence of tasks to balance between time and resources to optimize efficiencies. An action priority matrix is most useful in critical situations or time-crunch scenarios in the project. It has 4 quadrants - resulting in 4 possibilities, that are: 

    • Quick Wins/urgent
    • Major projects/not urgent 
    • Fill-ins/delegate 
    • Hard slogs/Postpone or ignore 

    5. Milestone Trend Analysis (MTA) 

    This is an important project scheduling and control tool which helps project teams determine whether the project is ahead of schedule or behind schedule and applies techniques or corrective actions to avoid variance. MTA involves creating a chart with the planning line vs the implementation line along with the respective milestones to represent trends and analyze the same. With the help of MTA, project managers can easily identify the bottlenecks and any constraints that may derail the project from its planned course of action. Want to get a project management certification? Understand the nitty-gritties of the real world project management life cycle easily in our PRINCE2 course

    10 Steps to Successful Project Planning  

    Step 1: Define stakeholders 

    Identifying and defining stakeholders is the first step to successful project planning as any stakeholder identified late will cause scope-creep or unwarranted changes which may be too expensive for the project. 

    Step 2: Define roles & responsibilities 

    Outlining clear roles and responsibilities is an important next step; not all stakeholders will have the same level of interest in the project and hence it is important to establish the responsibility, accountability, and role expectations in the project.

    Step 3: Introduce stakeholders  

    Bringing the stakeholders together and introducing them to the project as well as each other in a formal setup helps build trust and alignment with the overall project and organizational goals. This step helps ensure everyone's voices are heard and also secures commitment from stakeholders for the project. 

    Step 4: Set goals 

    Goal setting is the key step in planning, without which it will be impossible to assess project success and mark the project closed upon completion i.e. meeting the defined goals. 

    Step 5: Prioritize tasks  

    Task prioritization is the key to understanding what kind of resources will be aligned to the project at what durations. Not having a prioritized list of tasks will only confuse overlapping activities and also cost overruns in the project execution. 

    Step 6: Create a schedule  

    Once the goals are established and prioritized, creating a roadmap with the project milestones helps understand dependencies, constraints, and sequencing of activities for the project. Project scheduling helps outline which activities will be completed in what order, how and when they will start, what will be their outcomes and how will the project manager track and measure progress. 

    Step 7: Assess risks  

    Risks are uncertain events that may affect the project and planning involves understanding the risk and assessing its probability i.e. the chance of occurrence as well as its impact i.e. the effect on the project 

    Step 8: Communicate  

    Communication plays a key role in project management and according to the PM role, a project manager spends about 90% of the time communicating. Communication of plans, timely reviews, and change management are all important aspects of the project that need attention at regular intervals. 

    Step 9: Reassess  

    Reviewing and adjusting planning activity is as important as planning itself. An outdated plan can be as dangerous as having no plan at all and will give false direction to the project team and stakeholders. 

    Step 10: Final evaluation  

    Project plans need to be evaluated and signed off by those accountable; every planning activity must inculcate the practice of inspection and adaptation post which the adjusted planning decisions must go through final evaluation and approval.  

    How can Project Planning Software Help to Plan Projects?  

    Project planning and implementation of planned activities involve handling a lot of concurrencies and managing a lot of conflicting tasks, priorities, and resources. This activity often entails a thorough understanding of the current state as well as the proposed state/outcome of the project. In such an intense environment, project management software can be a boon if rightly used to align and sequence project activities.

    The project planning software essentially creates a structured framework for collaboration and automation of recurring tasks and processes. Planning software also facilitates the centralization of all information making it easy to retrieve and available on a need basis, especially in hybrid and agile setups where communication is the lifestream of business activities and execution. Project management software provides a transparent overview of completed, in progress, and planned projects to avoid bottlenecks and manage dependencies effectively. A short overview of project planning benefits include: 

    • Improved schedule management 
    • Facilitate cross-team communication and collaboration 
    • Provide visibility to better manage and mitigate risks 
    • Effective breakdown and allocation of tasks
    • Improved team productivity 
    • Easy-to-use reports and dashboards 

    Best Project Planning Tools and Software in 2023  

    1. Gantt Chart 

    Gantt charts are one of the most essential and effective tools project managers use to track project progress and are used throughout the project lifecycle. They facilitate the creation of a visual project schedule/roadmap, point out milestones, and dependencies, and act as an indispensable information radiator for teams and stakeholders. Gantt charts are quite popular with teams of any size/methodology because they project the most realistic project schedule when correctly maintained and can highlight areas of risk or attention to project managers.

    2. Critical Path Method (CPM) 

    CPM is one of the most undermined project planning and management techniques. It involves envisaging the longest path or sequence of activities in the project by making use of the Gantt chart, Work Breakdown Structure (WBS), and network diagramming techniques. The activities that fall on this sequence or "critical path" are termed critical activities and assume the highest priority on the project schedule. The other activities which do not fall on this critical path are activities that have a float and this helps determine the other path i.e. the critical path which represents the shortest time needed to complete the project.

    3. Program Evaluation and Review Technique (PERT) Chart 

    PERT is an estimation as well as scheduling technique that uses probabilities and simple statistical calculations to create a visual PERT diagram and identify independent activities. It is represented in the form of nodes and arrows sketched based on the order of activities in the project. Once the activity diagram is created, the earliest time (ET), latest time (TL), and slack time are determined for each activity. 

    4. Work Breakdown Structure (WBS) 

    WBS is a technique that comes in handy to organize and track project tasks sequentially and hierarchically. It is a visual representation of every task in the project and involves the decomposition of work into a smaller and more manageable set of tasks/activities. It is often used by project managers in conjunction with CPM and PERT. 

    5. Project Documentation 

    Project documentation is the beginning point that provides a glimpse of the project details, status, and open items. Every project should have a knowledge base or repository which aids newcomers to ramp up quickly on the project know-how and also address their concerns effectively.

    Tips for Project Planning  

    1. Always start with the end in mind. 
    2. Understand project objectives, benefits, success metrics 
    3. Identify stakeholders and their interests 
    4. Understand the current state/problem statement 
    5. Understand the proposed state/solution statement 
    6. Define roles and responsibilities 
    7. Review risks and communicate about them 
    8. Create a unit-level roadmap with milestones
    9. Ensure to be considerate of environmental challenges 
    10. Revisit and review the plans drafted frequently along with tracking changes 

    Apart from the above tips for project planning professionals, it is very vital to understand when to quit or pull the plug in certain unfortunate circumstances where projects drag and go on the downside - in which case, absorbing the sunk costs and shutting down the projects is only the feasible and economical resort. 

    Simple Project Plan Example 

    A traditional or simple project plan primarily has the following components: 

    • Project purpose 
    • Project stakeholders information 
    • Executive summary 
    • Business Objectives 
    • Work Breakdown Structure 
    • Deployment and Change Control Process 
    • Schedule Management 
    • Milestones and Dependencies 
    • Project Schedule Representation 
    • Cost Management and Budgeting 
    • Quality Management 
    • Resource Management 
    • Communication Management 
    • Risk Management 
    • Procurement Management 
    • Project KPIs and Metrics

    Agile Project Plan Example  

    An agile project plan follows the same structure as a traditional project plan with the only difference being that the project scheduling and activities are iterative and move in a continuous feedback loop. 

    Free Project Planning Templates  

    1. project plan template - IC-Agile-Project-Plan-Template_Google_Doc 
    2. Gantt chart template - Gantt Chart Template Google Sheet 
    3. Multiple project roadmap template - IC-Multiple-Project-Roadmap-Template_Google_Doc 
    4. PM timeline template - IC-Multiple-Project-Roadmap-Template_Google_Doc 
    5. Project tracking template - Project tracking 

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    How Project Planning Can Improve Your Organization and Career?  

    Project planning is a non-negotiable ingredient for the success of any project manager or organization. Its importance in the project lifecycle cannot be overstated. When performed rightly, planning helps every other function and part of the organization perform smoothly. Structured planning not only aids the project manager in daily execution but also frees up the project progress from distractions due to off-track tasks, budgets, and controls. Regular planning and review help the project manager optimize efficiency, align only required resources, and save costs for the project and organization. 

    In reality, projects tend to go on and on without a firm end unless planned appropriately and reviewed frequently. It is planning that defines what activities should be sequenced in what order to create project deliverables and complete projects as expected. In short, better project planning results in better project execution and controls as it addresses a lot of key aspects such as: 

    • Improve overall business processes
    • Provides opportunities to bring in economies of scale 
    • Reduces rework and waste 
    • Obtaining stakeholder alignment from the start 
    • Helps in outlining a clear project scope 
    • Creates transparency in roles and responsibilities 
    • Provides opportunities to flag risks in advance and chalk out mitigation plans 

    Apart from the above benefits, project planning also upholds the integrity of the project manager and organization in meeting their commitments to clients, third parties, and other stakeholders. 


    Project planning is an integral part of any project life cycle especially when projects operate in non-traditional and VUCA environments that have so many components requiring attention. Planning is not just another stage of the project lifecycle but it is the most crucial and defining factor with far-reaching impacts and consequences. Developing a concrete project plan can be simple and easy for any project manager, but also complex and drawn out depending on the nature of the project. Not having a project plan will only lead to failure because there would be no clarity on business objectives or roles and responsibilities which form the crux of any project execution, monitoring, and control. 

    Drafting a project plan involves exhaustive mapping and categorization of project objectives, schedules, activities, and resources to ensure things fall in the right place while executing the project. It is also imperative to note that projects have a larger impact on the organization as a whole. When planned thoroughly, projects engage efficiencies, save resources, reduce costs, improve ethos, and contribute to a positive environment. Project management in any organization always commences with project planning - if planning is focused and precise, the organization stands to gain wins with the project's success. Ace your career with world class courses and training from the experts - find out from our catalogue of KnowledgeHut’s courses for Project Managers today. 

    Frequently Asked Questions

    1Who is responsible for planning a group project?

    The project manager is responsible for the project. They are the key personnel who plan the project, gather resources, align and manage activities, resources, and tasks throughout the project lifecycle. 

    2How can project planning help minimize risks?

    Project planning in project management helps identify activities, sequence them, create schedules, align milestones and most importantly identify and assess risks thereby helping in flagging items early in the cycle and minimize impact of risks or driving mitigation strategies to address risks. 

    3How does project cost affect project planning?

    Project cost is an important component in the iron triangle of project management and project cost planning involves estimating, allocating and controlling project costs. Budgets planned and approved in project cost planning only can be used during project execution. 


    Rohit Arjun Sambhwani


    Rohit Arjun Sambhwani is an IT professional having over a decade and half of experience in various roles, domains & organizations, currently playing a leading role with a premier IT services organization. He is a post graduate in Information Technology and enjoys his free time learning new topics, project management, agile coaching, and writing apart from playing with his naughty little one Aryan

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