Project management vs operations management: What’s the difference?
Last updated on: February 9, 2023
If you’re not sure about the differences between project and operation management — you are at the right place.
After reading this article, the differences between the two terms will be crystal clear.
First, we will define a project and the role of a project manager.
Then, we will explain the term operation and what an operations manager does.
After that, we will cover how project management is related to operations management and address the differences between them.
Additionally, we reached out to project and operations management experts to share their perspectives on key differences between projects and operations management.
Last but not least, we will provide a list of valuable tools for project and operations managers.
Let’s get started.
What is a project?
According to the Harvard Graduate School of Education, a project is “a temporary endeavor undertaken to create, modify, or retire a unique product, service, or result.”
Similarly, the Association for Project Management (APM) defines a project as “a unique, transient endeavor undertaken to achieve planned objectives, which could be defined in terms of outputs, outcomes or benefits.”
The UMass Boston Information Technology Project Management Methodology describes a project as:
- ”A unique endeavor (not repeated)
- Temporary, with a distinct beginning and end
- Defined by specific deliverables
- Conducted by a temporary team that exists for the duration of its execution
- Having a project manager who is responsible for its success
- Defined by identifying its starting point, the goals/objectives sought, and the route between them.”
To sum up, all projects share the following characteristics:
- They are unique
- They are temporary
- They have a project team
- They have a budget
- They have a schedule and expectations the project team must meet
What is project management?
The Association of Project Management (APM) defines project management as “the application of processes, methods, skills, knowledge, and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters.”
According to the Project Management – 2nd Edition by Adrienne Watt, “project management is the application of knowledge, skills, tools, and techniques applied to project activities in order to meet the project requirements.”
APM points out key factors that differentiate project management from just ‘management’:
- It has a final deliverable, and
- It has a limited timespan.
Moreover, unlike project management, management is an ongoing process.
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For a more detailed explanation of project management, check out our guide:
The role of a project manager in project management
Project management requires a project manager to make sure everything goes smoothly.
Project managers are responsible for the projects through all the phases of project management — from the initiation to the end of the project closing phase.
A project manager’s responsibilities include the following:
- Defining project scope,
- Planning and managing tasks,
- Organizing resources,
- Negotiating with contractors and suppliers,
- Evaluating and managing risks,
- Keeping in touch with stakeholders,
- Managing changes,
- Documenting the project’s progress,
- Collecting signatures, and
- Working on increasing employee engagement.
What is operational work?
Unlike projects that have a finite timespan, operations are ongoing and repetitive. In other words, operational work produces the same thing again and again.
For example, developing a new product is a project — but the continued production of the product is an operation.
Operational activities may repeat as needed, daily, monthly, or annually.
They are usually found in:
- Production operations,
- Accounting operations,
- Inventory management,
- Customer service, and
- Quality control.
What is operations management?
According to Investopedia, operations management is “the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.”
Operations management involves planning, organizing, and overseeing the organization’s processes. It aims to balance revenues and expenses and achieve the highest operating profit.
In other words, operations management ensures that business runs effectively on a daily basis and includes:
- Managing various departments within the organization,
- Creating strategies,
- Balancing revenue and costs,
- Managing and streamlining processes, and
- Working on production and logistics.
The role of an operations manager in operations management
Operations managers ensure that a business runs smoothly and efficiently.
They oversee the work of different departments within a company to help them coordinate and work towards shared business goals.
The responsibilities of an operations manager include, but are not limited to:
- Assisting in designing and developing products and services,
- Managing inventory via the supply chain,
- Conducting procurement and purchasing,
- Managing logistics,
- Forecasting for planning purposes,
- Capacity planning,
- Optimizing quality control,
- Analyzing the value chain,
- Optimizing resource distribution,
- Eliminating waste and blockages,
- Developing operational policies and procedures, and
- Constantly improving processes.
How is project management related to operations management?
Project management and operations management are not interchangeable terms — but there are some areas where they overlap.
Suppose that company “X” decides to implement a significant change to its business operations. Significant changes are typically implemented as a project. The implementation of the change counts as a project with a deliverable (the change) and a timeframe.
After the project is completed (i.e. the change is implemented), operations take care of:
- Operating, and
- Supporting the products or services that resulted from the project.
During a project’s life cycle, the project could cross paths with operations in the following situations:
- In the phase of developing a new product/service or upgrading it,
- When improving operations, and
- During the project closing phase, when starting with adjusting procedures of any continuous support and tasks associated with the deliverable or service.
Basic differences between project management and operations management
By now, you probably have an idea about how project management and operations management differ.
Now, we’ll take a closer look at these differences.
We have prepared the table below to make the basic differences between project and operations management easier to comprehend.
|Differences||Project management||Operations management|
|Time frame||Projects are time-bound||Operations are day-to-day activities|
|Output||Unique||Always the same|
|Risks involved||Higher risks||Lower risks|
As we can see, there are some differences between project management and operations management regarding:
- Time frame,
- Output, and
- Risks involved.
Let’s explain them briefly.
Basic difference #1: Time frame
Projects are time-bound, with start and finish dates.
Operations are day-to-day activities that ensure the business runs effectively.
Projects can be short-term or long-term, but every project eventually comes to an end.
On the other hand, operations run continuously.
In line with that, a project team is assembled to work on a particular project and disassembles after the project ends.
Similarly, a project manager’s role is temporary, while an operations manager’s role is ongoing.
For example, a company can decide to undertake a project to launch a new product or service and improve existing processes.
Once the product/service is launched, the project is complete.
On the other hand, operations management is responsible for overseeing, directing, and controlling continuous business operations such as:
- Manufacturing operations,
- Accounting operations, and
- Production operations.
Basic difference #2: Output
Just as projects are unique, their outputs are as well.
They vary depending on the project and the result we want to accomplish with a particular project.
The project produces new outcomes to achieve business objectives.
On the other hand, operations don’t aim to produce anything new but to maintain and sustain a system.
They produce the same products, services, or results repeatedly.
Basic difference #3: Risks involved
In project management, the risk level is higher as projects imply exploring new territories.
Operation management risk level is lower as the tasks are recurrent.
Those are the basic differences between project management and operations management everyone should know — but, what do the experts have to add?
Differences between project management and operations management, according to experts
We reached out to project and operations management experts to pick their brains on the key differences between project and operations management.
Here’s what they had to say.
Operations are more varied than projects, taskwise
According to Angela Druckman, the president of The Druckman Company, an agile coach, certified Scrum trainer, and the author of the book “30 Days to Better Agile”, project management and process management do fundamentally differ.
She explains the key difference between them by providing an example:
“A project is a body of work that has a definitive start and end. Operations work is more varied. There is “fire-fighting” (i.e. “The system is down!”), small projects, and “efforts” — like upgrading everyone to the latest version of Windows.“
She explains how Ops groups avoid constantly working in reaction mode:
“For this reason, Ops groups often do best when they work in short iterations and when their work is prioritized by the Ops manager — to make sure they are making the best use of their limited resources.”
Projects are temporary, operations are continuous
We also asked Marko Stojsin, Project Manager at STRABAG and certified PMP® professional with years of experience managing projects, to provide his point of view. He explains that a project is a temporary endeavor, while operations are ongoing and repetitive actions.
“A project can be defined as a temporary endeavor that produces a unique product, service, or result. On the other hand, operations we should think of as “business as usual” — they are ongoing repetitive actions (i.e. procurement, accounting, finance, marketing, sales), and they are the core business functions. Operations are permanent in nature and don’t produce anything new.”
Projects can be anything, anytime — operations require long-term planning for processes
Another expert we reached out to, Dr. David Little, Associate Professor of Management, teaches courses in Global Supply Chain/Operations Management and Strategic Management at the High Point University.
According to him:
“PM is all about accomplishing a one-time unique project on time, within budget, and meeting the goals established for the project.”
Dr. Little adds that projects can be anything — from a marketing campaign to building a house to developing software — while operations management projects usually involve developing new process layouts, installation of technology, etc.
Speaking of operations management projects, he says that they usually involve developing new process layouts, installation of technology, etc. This is what he says:
“OM work is the meat and potatoes daily work of any organization. OM is all about delivering the service or product to the customer.”
What does this actually involve? Dr. Little explains further:
“This involves daily management of the flow of materials and organizing how the work is done. Long-term planning is also required to ensure the organization has supply chain partnerships functioning well and managing capacity to meet forecasted demand.”
Operations managers are full-time staff — a project manager’s work is bound by time and scope
According to Amira elAdawi, Founder & Managing Partner at AMIRA & CO, who hires both project managers and operation managers regularly, there are major differences from the perspective of the recipient of the work of both types of managers.
“Operations managers run a core business function that is an integral and ongoing part of the day-to-day business of a company. They are (and should be) typically full-time staff.
A project manager’s work is different — it’s a specific project or initiative bounded by time and scope. There is a beginning, middle, and end to their work, which is typically a one-off project, not part of the day-to-day work of the standard business functions.”
Operations managers are experts on the work their team performs — project managers are not
Amira elAdawi explains that operations managers are expected to be experts in the area of work their team performs — while project managers’ main role is to get other people to do their best in compliance with project parameters.
“Operations managers are expected to be an expert in work being performed by their team. If you’re an operations manager in design, you must be an expert in design — your staff should be able to come to you and rely on your expertise in your area.
However, this is different for a project manager. Project managers coordinate and oversee other experts doing their jobs. They manage people, budgets, and timelines — and ensure everything is running efficiently.”
Useful software for managing projects and operations
Modern technologies help us win the battle against mountains of paperwork associated with project and operations management.
With their help, project and operations managers can easily organize work, assign tasks, track work progress, streamline processes, and ensure operational efficiency across all departments.
Managing projects and operations becomes easier when using software solutions such as:
- Project management software,
- Time-tracking software, and
- Team chat apps.
Project management and operations management software
Project management software is every project manager’s best companion during all project phases.
When projects are complex, tracking who’s working on what becomes challenging.
With the help of project management software, project managers can easily:
- Plan, organize, and allocate project resources,
- Set and assign tasks to project team members,
- Prioritize tasks,
- Keep track of the project’s progress, and
- Share progress updates with project stakeholders.
Using project management software has many benefits, such as:
- Improved collaboration,
- Easier integration of new team members,
- Easy task management,
- Improved remote work,
- Better resource allocation,
- Easier file access and sharing, and
- Real-time project status.
What’s more, project management software doesn’t have to break the bank. Some task management tools, such as Plaky, are free and easy to use.
With Plaky, project management and operations management become simpler, as you can:
- Customize your workspace and manage your team’s permissions,
- Create an unlimited number of projects and tasks,
- Have an unlimited number of users,
- Add an unlimited number of files to your tasks,
- Assign teammates to tasks so everyone can see who works on what,
- Customize tasks by adding different column types (e.g. assignee, links, status, etc.),
- Discuss work by leaving comments and adding mentions,
- Get notified when there’s an update to a task you are subscribed to, or when someone mentions you,
- See the status of all project tasks at a glance,
- Filter tasks by different parameters, such as priority, status, or due date,
- Use Table or Kanban view, and
- Use free project management templates (e.g. Strategy Plan template, Product Launch template, Bug Tracking template, etc.).
With comprehensive project management software, you can organize your projects and operations and have all the information you need just one click away.
Using a time-tracking tool lets you monitor work hours across projects.
It allows you to track productivity, attendance, and billable hours efficiently.
Additionally, keeping track of your time helps analyze the processes in operations and project management by measuring time spent on different tasks and finding improvement opportunities.
Better time management contributes to:
- Better productivity,
- Improved workload distribution,
- Understanding of how people use their time,
- Better understanding of time spent on ad-hoc requests,
- Increased project efficiency, and
- Improved cost capitalization.
Team chat app
Checking work emails too often can be overwhelming. On the other hand, you don’t want to miss anything important.
According to most recent workplace communication statistics, 86% of employees and executives think the leading causes of failures at the workplace are the lack of effective collaboration and communication.
So, how can you stay productive and nurture effective team collaboration at the same time?
The solution to this problem lies in incorporating a business chat app into your workflow.
Using it can help your team significantly improve communication and productivity in your project and operations management processes.
As stated in a Forbes article, reading and replying to emails consumes about two-and-a-half hours of office workers’ time daily — people, on average, receive at least 200 messages.
That’s a whopping number of messages per day.
Using a team chat app ensures:
- Fewer emails — all communication is happening in one place, which removes the need for emails. Employees can join channels of their interest, participate in conversations with other teams, and stay updated on different topics.
- Faster collaboration — getting an answer to every question team members may have becomes quicker.
- Increased productivity — communication via channels enables everyone to access the most recent information and don’t waste their time checking several apps.
Wrapping up: Projects and operations differ, but both require great organization
The main difference between project management and operations management lies in the fact that projects are temporary while operations are continuous.
Additionally, projects produce new outputs, while operations don’t create anything new — instead, they maintain and sustain a system.
Project teams are assembled to work on a project on an ad hoc basis, while operations are ongoing — employees perform them daily.
Project managers are in charge of managing specific projects, while operations managers make sure that a business runs smoothly and efficiently.
To make both project and operations management more efficient, make sure you start using some adequate software solutions, and organize your work properly.