What is the difference between projects and operations?

What is the difference between projects and operations?

0 2024

In any organization, only two aspects of work exist—on-going operations and projects. Projects are defined as unique, temporary endeavors with a specific beginning and end. Operations constitute an organization’s on-going, repetitive activities, such as accounting or production.

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.

Projects are initiated by organizations for a variety of reasons, such as to meet a business need, attain a strategic objective or meet a market demand. The only way organizations can accomplish any of these goals is by expending resources of the organization over time, for a cost.

According to the PMBOK Guide, Fifth Edition, a Project is a temporary endeavor undertaken to create a unique product, service or result.
Temporary means having a definite beginning and end. The end is reached when the project’s objectives have been achieved, or if the project is terminated for any reason.

Temporary does not mean short in nature, and it could well be a mammoth project – like a 10 year project – for example, sending a man to moon, sending Curiosity to Mars, Building the Taj Mahal or the Pyramids (I visited the amazing Pyramids today, as I am in Cairo this week to conduct a series of corporate training in Egypt, and it was absolutely fantastic… will post pictures soon too…)

Secondly, each project creates a unique product, service or result. Sure, there may be some repetitive elements present in each project, but the output must be unique – like similar housing projects in the same area with the same design may be similar, but each will have unique challenges, different contractors, issues, etc. that will make them each unique.

An ongoing work effort is generally a repetitive process because it follows an organization’s existing procedures. The ongoing execution of activities that produce the same result or product repetitively is what Operations is all about. Production operations, accounting operations, manufacturing a product are all Operational activities.

Operations are permanent initiatives that produce repetitive results, with resources assigned to do the same set of tasks and produce a standard output. In the life of a product, there will be many projects to improve the product, add new features etc. and these projects will come and go as required. The underlying production of the product will continue as usual, although there will be refinements done and included in the product over the period.

Projects require project management, while operations require business process management or operations management. Projects and Operations will interact with each other at key points in a product’s life cycle.

Operations are ongoing, but projects are temporary.

Both projects and operations are carried out by people, both require planning, both require management, and both are constrained by a fixed amount of budget, resources, and timelines.

Example of Project / Operations : A plumber may be doing a support work to fix a leak. Each day he fixes leaks in 20 locations. Each leak may require a different solution (some may need a new washer, or a new pipe, or some putty), but it is still support work. But let’s say during a leak fix, he realizes that the whole tubing is weak, damaged at many locations, and is going to explode at any time. Thus, he informs the home owner that a “Redesign the bathroom” project should be undertaken if you want a permanent fix, and the plumber can then give the details of the work required (scope), and a quotation (budget), and estimated time to fix the whole thing (schedule).  If the owner (Sponsor) agrees to the time/cost/scope, a “remodel the bathroom” project is born. If not, then the “fix the leak” support ticket is completed and closed with the required documentation updates (payments, sign-off).

Supporting users is an operational work, and there may be a Help Desk or a Support team whose job is to settle the user’s ad-hoc requirements. Most of these will fall into routine tasks – creating a user id, restoring a forgotten password, adding access control, fixing duplicates, fixing any encountered bugs, and teaching common functions.

However, some support requests may turn out to be too big, or too difficult to do, or may be beyond the scope of the support team. This might require the project team to be roped in. They will scope the requirements, look at the benefits, and then work out a time/cost estimate. If the budget can be found through a sponsor, this can become a project. other wise, it can stay as a support ticket that is completed, closed or deferred for future. It sounds simple, and it is. Just read the question carefully in the PMP exam, and then identify from the situation if it is a unique project or an ongoing operation.

Citations: *http://www.projectinsight.net/project-management-basics/projects-and-operations