The difference between Project Management and Operations Management

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What’s the difference between project management and operations management?

I get this question fairly often, many people get confused what’s the difference, even though the difference between them is so clear. This is possible because they share some characteristics, such as:

  • both are performed by people,
  • both are planned, executed and controlled, and
  • both have resource limitation

In this short article, I will explain the difference between project management and operations management and that in any organization, only two aspects of work exist – on-going operations and projects.

Project Management

Projects are unique, temporary tasks with a specific beginning and end.

PRINCE2 defines the project as – “A project is a temporary organization that is created for the purpose of delivering one or more business products according to an agreed Business Case.”

Project management is the organizational function, to initiate projects for a variety of reasons, such as to meet a business need, attain a strategic objective or meet market demand. projects are temporary and help the business to meet organizational goals and to respond quickly and easily to the external environment.

PMBOK Guide defines the project as – “A project is a temporary endeavor undertaken to create a unique product, service, or result.”

Resources are assigned temporarily to projects that have a start and end date. Organizations use projects to change operations, products and services to meet business needs, gain competitive advantage or/and respond to new markets.

Operations Management

Operations constitute an organization’s on-going, repetitive activities, Operations Management is the ongoing organizational function performing the activity of providing IT service management or accounting operations.

Resources are assigned to do the same tasks according to operating procedures and policies. IT operations are the set of all processes and services that are both provisioned by an IT staff to their internal or external clients and used by themselves, to run themselves as a business.

Distributed Costs

Since all work and/or efforts performed within an organization are characterized as either operations or projects, all of the costs of an organization must be distributed to either operations or projects.

Operations are ongoing, but projects are temporary.

Torbjorn Zetterlund

Different Objectives

Projects require project management whereas operations require business process management or operations management. However, projects and operations do meet at various points during the life-cycle of a product or service.

For example when:

  • Re-engineering business processes,
  • Developing or changing product and services, and
  • Improving operations or product development.

Process Management

The goal of process management is to improve processes continuously.

Improving operational processes may increase effectiveness, cut costs and gain competitive advantage.

Projects are about driving change in the organization. For instance, using business process re-engineering to align business needs with customer expectation.

Different Skills

Projects are unique and temporary (definitive beginning and ending), while Operations are ongoing and permanent with repetitive output.

  • Projects have a fixed budget; on the other hand, Operations have to earn profit in order to run the business.
  • Projects are executed to start a new business objective and terminated when it is achieved, while Operational work does not produce anything new and it is ongoing.
  • Projects create a unique product, service, or result; Operations produce the same product, aim to earn a profit, and keep the system running.

Moreover, the skills needed by the project manager are different from those needed by operational managers.

Project ManagerOperational Manager
  • The role ends with the project
  • Routine
  • Temporary team
  • Stable organization
  • Many different skills
  • Specialist skills
  • Work not done before
  • Work repeatable
  • Time, cost and scope constraints
  • Annual planning cycle
  • Difficult to estimate time and budget
  • Budgets set and fixed events

Conclusion

I hope you got the insight into what is the difference, I challenge you to comment below for you to describe the difference between project management and operations management?

You can answer below in the comment box.

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