Why Are Projects Initiated?

As a professional, we participate in several projects through our professional career. Most of the time, we are assigned to a project with a given scope and it is expected to finish the project on time and on budget.  But have you ever wondered “why are projects initiated?”

 

There are 7 common reasons to initiate a project by an organization. We will go over each of them, and give example projects to these reasons:

 

Market Demand:

 

Market demand is described as “The aggregate of the demands of all potential customers (market participants) for a specific product over a specific period in a specific market.” This demand generally initiates new projects to meet the specific needs of a particular customer group. 

 

For example, in recent years, car manufacturers started to produce smaller cars for their women customer segment. Some examples of these car models and their manufacturers are listed below:
 

Projects to produce these cars are examples of project initiation due to the market demand.

 

Strategic Opportunity/Business Need:

 

Organizations might initiate projects in order to get a strategic opportunity or due to a business need. For example Unilever might initiate a new product development project in order to be the “World’s largest FMCG provider” in a specific product group. 

 

Also there might be a business need to initiate a new project as well. Let’s thinks that a company was doing its approval processes through a paper sign-off chain travelling over the entire company. In order to gain time and improve efficiency, organization may initiate an approval system development project to do these approvals within a software application.

 

Social Need:

 

Social needs of people or groups might be reason to initiate new projects as well. UNICEF is an organization tries to increase the life and education standards of children all around the world. 

 

For instance, if UNICEF starts to build 10 regional schools in Middle East region, this will be an example of project initiation due to a social need.

 

Environmental Consideration:

 

Environmental considerations become an important aspect for most of the companies. Because consumers become more responsive and selective in recent years for “green” products. As a result, companies had to give importance in environmental issues in their products and started to produce more environmental friendly products or revised their production processes to produce more environmental friendly. 

 

Therefore, these environmental considerations might be the reason for initiating new projects in organizations. Below you see an example of Apple ad which shows that they are using 100% renewable energy for their data centers. 

 

Customer Request:

 

This is actually the most common way to initiate projects especially for vendors. Let’s think from the perspective of a software vendor. Your customers may ask from you to deliver a new custom software application for their business need. 

 

For example, a company might come to your company and ask to build its website. From your customer’s perspective, this project is initiated due to a business need, but from your company’s perspective, this project is initiated due to a customer request.

 

Technological Advance:

 

Companies might initiate new projects to have a technological advance against their rivals. Remember the entrance of the Gmail to IT world. It was an e-mail provider as its rivals in the beginning. But, they entered into the market with a revolutionary way by having at least 2GBs of mailbox capacity and increasing each day. When they introduced their e-mail service, their competitors were providing 250MBs of capacity at most. Thus, this technological advance of Gmail, respectively Google, helped to attract new consumers and become the world’s most preferred e-mail provider.

 

Legal Requirement:

 

Depending on the industry you are working new regulations might be obligated by the government or agencies. In order to work in line with the proposed regulations, you might need to initiate new projects. 

 

For instance in recent years, for many countries, “number portability of phone numbers” was obliged by the telecommunication regulations agencies of regarding countries. This obligation allows subscribers of an operator to switch their operator without changing their phone numbers. However, telecom operators were not having sufficient technical infrastructure to support this number portability. As a result, several projects have been initiated both by telecom operators and by the telecommunication regulations agencies of the countries in order to support number portability.

 

This is an example of project initiation due to a legal requirement.