FACTORS INFLUENCING PROJECT MANAGEMENT SUCCESS: THE

RELEVANCE OF DIGITAL COMPETENCES

PhD, Marko Slavković, assistant professor1

PhD student, Marijana Simić, researcher2

Abstract: Digital era changes the assumption for business success forces of production firms
and transform their technological base. Success of this type of project depends on different
factors related to internal organization, stakeholders and digital competencies. The purpose
of this article is to compare the relevance of these factors for project management success.
The goal is to identify the importance of employees' digital competences in technological
changes. The results obtained in the original research can be a useful guide for managers to
focus their efforts on factors that can ensure superior performance of a particular project.

Key words: project management, digital competences, digitalization, technology change

1. INTRODUCTION

Globalization and digitization as contemporary trends play an important role in the way
businesses operate. Challenges and issues facing enterprises are the basic characteristics of
today's Fourth Industrial Revolution that integrates the digital and physical world in one way
[1] into a consistent whole [2]. Moreover, the intensification of the use of digital technology
in the last two decades has contributed to the transformation of numerous processes in the
company and the value chain, which has affected all activities, from procurement to sales and
marketing. Special requirements are in front of production companies, which, by replacing
traditional methods of work with modern digital tools [3], tend to maximize potential benefits
generated by the use of technologies such as automation, robotics, 3D-printing, Internet of
Things (IoT) and others [4], [5].

The identified trends have led to changes, not only in the structure of production and
productivity, but also in the domain of quality and quantity of work. There is a need for
transforming business models, but also redefining job descriptions [3]. Advanced
technologies associated with the Fourth Industrial Revolution, on the one hand, guarantee
significant improvements in efficiency and effectiveness of production, but on the other hand,
they also require new key competences and capabilities of employees [6], [2]. Consequently,
there is a need to innovate formal education programs and their content, taking into account
the existing needs of individuals. This is further enhanced by the fact that in companies that
are seeking a sustainable competitive advantage, the focus is increasingly on enhancing
professional skills and business models through continuous education and lifelong learning
programs for newly employed and existing employees [3].

In addition, project management is classified as the fundamental activity of manufacturing

enterprises [7], [8], especially if they want to secure their position in today's digitalization era.
An important task for managers is the identification of factors that determine the success of
1
Faculty of Economics University of Kragujevac, Djure Pucara Starog 3, 34000 Kragujevac, Serbia,
mslavkovic@kg.ac.rs
2
Faculty of Economics University of Kragujevac, Djure Pucara Starog 3, 34000 Kragujevac, Serbia,
msimic@kg.ac.rs
projects, which imply the implementation of advanced technology. Since the future of
production rests on the exploitation of intangible assets and the ability to innovate and
differentiate [9], as a key precondition for successfully overcoming the barriers to digital
transformation, and thus maximizing the potential benefits of advanced technologies, it
represents human capital [3]. A review of previous studies identified a wide range of factors
that determine the success of the projects. Among them are allocated financially [9], [7], [8],
organizational [10], [11], [12], stakeholders [13], technological [14]. As the development of
advanced production technologies develops the need for changing employee behavior patterns
and their competencies [15], project managers must undoubtedly pay special attention to the
development of competencies of their employees, in order to ensure the path to successful
implementation of the project. In this context, the phenomenon of digital competences is
highlighted [16]. Although their significance in the field of project management can not be
disputed [17], empirical evidence is limited that points to the importance of digital
competencies for the successful implementation of the project.

2. LITERATURE REVIEW

In today's era, project management is defined not only as a mode of production, which results
in the creation of a finished product [13], but it is also assumed to be an organizational form
and management technique [18]. One of the important issues in the field of project
management refers to the method of measuring project performance. For the past two
decades, the focus has been on financial criteria, based on the estimation of efficiency and the
design of the budget required for the implementation of the project [19]. In addition, the
success of the project can also be viewed through the prism of stakeholder satisfaction, while
recognizing the success of products on the market, business and organizational benefits, and
the development of project team members [20].

Although a significant part of the professional public places emphasis on financial factors of
success [9], [7], [8], other factors need not be omitted. Among the important internal factors,
which can improve the efficiency and effectiveness of project implementation, is the
organizational culture [12]. Presented as the development of a unique set of values, attitudes
and ideas, it is clear that it plays an important role in many aspects of the organization [21].
An organization whose culture rests on flexibility and spontaneity will most likely contribute
to more effectively overcoming obstacles caused by uncertainty. Therefore, the organizational
culture, which fosters active participation of employees and their empowerment during the
implementation of advanced technology, certainly contributes positively to the successful
realization of the projects [22], [10]. In addition to organizational culture, previous research
emphasizes the importance of organizational structure, which primarily affects the ease of
resource allocation and agility in decision making. According to [23], the organizational
structure is an important factor, as there are greater prospects for the success of the project, if
the organizational structure is fully adapted to the requirements for the realization of the
project.

Although the wide range of internal factors, which determine the success of the project, the
following conditions should not be omitted [24]: (1) the criteria for success should be
consistent with the interests of stakeholders before and during the project; (2) the relationship
between project owner / project sponsor and manager should be characterized by co-operation
and continuous exchange of information and ideas; (3) the project manager should be
prepared to handle flexibly in unforeseen circumstances; (4) The project promoter / sponsor
should really be interested in the results of the project. Based on the above, it is concluded
that "the value is in the eyes of the observers", ie that the actions and interests of the
stakeholders significantly determine the chances of realization and success of the projects.
Bearing in mind the numerous, but often, contradictory perspectives of stakeholders, the
success of the projects can be considered in different ways, and therefore special attention
should be paid to the consideration and harmonization of the interests of internal and external
stakeholders [10].

Among external stakeholders, an important group is represented by suppliers, since the level
of integration with these stakeholders contributes to positive results in terms of the flexibility
and reliability of the delivered supplies [25]. In accordance, Horn et al., [26] emphasize that
enterprises with a high level of integration with suppliers are particularly successful in the
execution of projects. Therefore, the relationship with suppliers and their choice should be
classified as another critical factor. The selection process should be carried out carefully,
taking into account various aspects such as quality, price, delivery, service level, warranty,
technical capacity, production capacity, historical performance, and even location [27]. It is
also important to note that the definition of contractual items related to the establishment of
different incentive mechanisms (bonuses and penalties) for suppliers [28] plays an important
role in the realization of projects, since it can achieve reduction of time and cost of delivery
and improvement of the quality of the delivered articles [29]. In addition to relationships with
suppliers, the success of the project is also correlated with the level of client engagement. The
greater the degree of participation of clients in the project, it is easier to identify the
requirements, to establish the quality criteria and to reduce the need for change, and thus to
improve the performance. Therefore, the active participation of clients in projects has to be
stimulated from the beginning of the life cycle of the project [30].

The implementation of advanced technology, which features the Fourth Industrial Revolution,
on the one hand, provides significant improvements in the efficiency and effectiveness of
production, but on the other hand, it also requires new key competences and skills to be
developed by employees [6], [2]. Since advanced production technology is a novelty, while
competence management is one of the most important levers on which successful
transformation processes lie [31], [2], it is necessary to create appropriate behavioral patterns,
which will primarily be based on the improvement of existing experience and abilities of
employees [15]. Chryssolouris et al. [32]. state that engineers in manufacturing companies
should attend various training programs in order to continuously work on the improvement of
knowledge and skills and thus meet the growing needs of the modern production industry.
Sousa and Rocha [33] have found that the set of necessary competences of employees is
changing under the influence of the effects of the Internet of things, cloud technologies, large
data, mobile technologies, artificial intelligence and robotics. Sousa and Wilks [34] concluded
in their study that the skills of critical thinking, adaptation, network collaboration and
creativity skills will be essential in today's business environment.

Moreover, the influence of advanced technology has significantly contributed to the

development of the phenomenon of digital competences, that is, technology-related skills
[16], which can also be classified as one of the primary requirements in the field of project
management in the production sector [35]. Their relevance rests on the fact that they
significantly contribute to acquiring other key competences (eg language, mathematics,
learning to learn, cultural awareness) [36]. However, empirical evidence of the specific
competencies of employees for successful implementation of projects in manufacturing
enterprises is limited [37], while a small number of studies are also concerned with
establishing the relevance of digital competencies necessary to overcome obstacles in
transformation processes [38], [2].

3. RESEARCH METHODOLOGY

The given theoretical framework and the gep in the existing literature is the starting point for
carrying out the research, the results of which are presented in this paper. The subject of the
research is to determine the relevance of different groups of factors, with particular emphasis
on establishing and comparing the importance of digital competencies for the successful
implementation of projects. Participation in the survey was taken by employees in managerial
positions in manufacturing enterprises, which actively operate in the territory of the Republic
of Serbia. The primary goal of the research is to determine the perception of employees about
the relevance of identified groups of factors for the realization of projects. The software
package SPSS was used for data processing. In accordance with the subject and objective of
the research, descriptive statistics analysis and reliability analysis were conducted.

A questionnaire was used as a research instrument, which was specifically designed for this
research. The first part of the questionnaire was intended to provide basic information about
the company (ie ownership structure, number of employees etc.) and information on the way
of organizing the production process and the existing form of automation. Within the second
section of the questionnaire, statements were presented, which presented critical factors for
the implementation of projects, whereby respondents were asked to express their views on the
relevance of these factors in the five-point Likert scale. The method of distributing the
questionnaire was conducted with the help of a transparent database of businessmen and
companies, published by the Business Registers Agency. This was randomly selected 189
active production companies, and 54 valid questionnaires were collected (response rate
28.6%).

4. RESEARCH RESULTS

Table 1 gives an overview of the evidence, which reflects various factors relevant to the
success of the projects, as well as the average values that reflect the attitude of the
respondents. Based on the results of descriptive statistical analysis, the conclusion is drawn
that managers attach the greatest importance to the factors concerning the stakeholders and
their relations with them. Particular emphasis is placed on the importance of customers, as the
most important external stakeholders, which clearly indicates the basic vision of the company
to strive to fully meet the needs of its customers. No suppliers should be omitted, which have
an impact on the efficiency of the execution of the production process, but also in the timely
satisfaction of the needs of customers. Regarding organizational factors, which are also highly
evaluated (3.8185), it is essential to note that it is important to build an organization and
cultivate a culture that facilitates the acquisition of the necessary resources (material and
immaterial).

Regarding digital competencies, the mean value shown (3,8796) indicates the central
relevance of these factors from the perspective of the manager. This result also points to the
potential shortage of Serbian manufacturing companies in which digital awareness is still not
developed, that is, employees continue to use traditional methods, tools and equipment.
Insufficient knowledge about new technologies, a constant break with modern trends and/or
resistance to change are just some of the possible reasons why digital competencies are not on
the highest level of significance. Also, Table 1 gives the results of reliability analysis. The
values of Cronbach's alpha coefficient can be accepted [39] and range from 0,700 to 0,734.

Factors Mean Standard deviation

Stakeholders: Cronbach’s alpha =0,734
Finding and selecting suppliers 4,2593 0,67810
Improving product quality from customer
perspective 4,2963 0,79217
Offering value to customers 4,1481 0,81048
Return rate of invested money into the new
production system 3,9444 0,83365
Strengthening the image of the organization
in public 3,9259 0,90807
Sum 4,1148 0,56248
Organisational structure and culture: Cronbach’s alpha =0,733
Willingness of the employees to accept and
participate in the implementation of the new 3,6852 1,07850
production system
Provision of necessary resources (material
and immaterial) for the implementation of a 4,2407 0,72516
new production system
Improving communication among employees 3,5000 1,02331
Time needed to implement a new production
system 3,9444 0,89899
Simplicity of implementation a new
production system 3,7222 0,97935
Sum 3,8185 0,65964
Digital competences: Cronbach’s alpha =0,700
Readiness of employees to follow the
demands of their superiors 3,9815 0,92125
Availability of relevant information on the
new production system 3,7963 0,89821
Employee competence to introduce a new
production system 3,8519 0,81048
Monitoring the achieved performance of the
new production system 3,8889 0,92485
Sum 3,8796 0,64563
Table 1: Deskriptive statistics and reliability analysis

5. CONCLUSION

Based on the results of the survey, it is concluded that digital competences have a significant
impact on the success of projects in manufacturing enterprises. However, it can not be said
that managers point out the above factors as the most important. In the first place are
stakeholders factors, that is, relationship with suppliers and buyers, as the most important
external stakeholders. The compensation for the obtained results rests with the fact that the
companies included in the sample still do not have modern technological equipment and tools,
and underestimates the importance of digital competencies. In addition, managers and
contractors are mostly used to traditional methods, which makes companies in Serbia on a
lower scale than in the region.

In addition to the insufficiently developed awareness of the need for the application of
modern technological solutions (internet of things, cloud technologies, large data, mobile
technologies, artificial intelligence and robotics), the findings incorporated in the
questionnaire primarily relate to the possibilities of using modern technological equipment in
order to more effectively communicate and exchange information and knowledge among
employees. In this way, gep has been created to expand and conduct future research, which
will include other digital competences (eg digital literacy, digital divide, digital citizenship).
In addition, it would be possible to carry out a comparison with other groups of critical project
success factors, such as financial, organizational and stakeholder-related factors, which would
lead to the ranking of the analyzed factors by the degree of importance for achieving success
in the domain of project management. Such a method of research would provide significant
implications for the managers of production companies, which would indicate to all critical
areas during project implementation and provide guidelines for the implementation of AMT
(advanced manufacturing technology).

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