Project and Operational Activities

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About this lesson

Operational activities manage and operate the business processes.  Projects interact with operational activities by creating and changing operational processes, products, and services.

Quick reference

Project Activities and Operational Activities

Operational activities manage and operate the business processes. Projects interact with operational activities by creating and changing operational processes, products, and services.

When to use

Projects will normally closely interact with operational activities at the time of project initiation and project completion. At the time of initiation, the operations are often setting the project goals and constraints. At the end of the project, the operations are often the stakeholders who do the final acceptance of the project result. Depending upon the project, operations may also participate in project review and tests during the project.

Instructions

Operations management as a management discipline is not part of this course. However, operations management often interacts with projects as stakeholders. This is especially true at initiation, during selected reviews or tests while the project is ongoing, and project closeout.

Project Initiation and Operational Activities

Operations manages the business processes such as order fulfillment and facility management. Projects often are established to create or modify elements for which operational management is responsible. When this is the case, operations managers are key stakeholders setting both requirements and constraints on the project. The projects are also selected and prioritized based upon the needs of operational management.

Project Reviews, Testing, and Project Governance and Operational Activities

Operational management personnel will often participate in project reviews during the course of the project. Their role is to ensure that the project is interpreting the requirements correctly and to provide guidance on project decisions and risk response plans. If the project is creating or changing a key operational process or system, operations will often provide personnel to assist in testing the project product or results. This both augments the project staff and provides to the project team an “expert” review of the project deliverables. In some cases business governance requirements impact how projects must be planned and managed. When that is the case operational managers often conduct the governance reviews or audits.

Project Closeout and Operational Activities

Operations manages individuals performing operational activities and will often be involved in the stakeholder acceptance project activities at the end of the projects. The project team passes responsibility for the new product, service or result to the operational team.

Business Value

Business Value: "The net quantifiable benefit derived from a business endeavor. The benefit may be tangible intangible, or both.”  PMBOK® Guide

The goal of many projects, programs, and portfolios is to increase business value. Business value is normally realized by the performance of the operational activities in the business operational processes. Business value includes both tangible and intangible elements and these elements are affected by projects, programs and portfolios. Projects develop a new product, service, or result that should increase business value. Programs integrate a group of projects so as to maximize business value across all of the projects. Portfolios align projects and programs along strategic objectives that are established by business management so as to create and sustain business value.  

Definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017, Page 700. PMBOK is a registered mark of the Project Management Institute, Inc.

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  • 00:04 Hi, this is Ray Sheen.
  • 00:05 I'd like to talk about the differences between project activities and
  • 00:09 operational activities.
  • 00:11 Now this will provide context for some of the questions on the PMP exam.
  • 00:15 Operations management runs the business.
  • 00:19 They use the standard business processes and
  • 00:22 resources to perform the normal business activities.
  • 00:25 In fact the major difference between projects and ops is that,
  • 00:29 projects are always unique but ops tries to follow the same processes every time.
  • 00:34 Variations in ops processes is a mark of inefficiency
  • 00:38 while a project is a temporary unique endeavor.
  • 00:42 So there must be variation in the process.
  • 00:45 Let's consider some examples.
  • 00:47 Ops management manages the order fulfillment process
  • 00:50 from taking a customer order to shipping the final product.
  • 00:54 Ops also manages the facilities and
  • 00:55 systems at all the various operating locations of the business.
  • 01:00 They manage both running and maintaining them.
  • 01:03 Operations management is responsible for achieving the near-term business goals and
  • 01:08 objectives.
  • 01:09 They're often measured on how the business did on the profit and loss statement or
  • 01:13 the cash flow statement.
  • 01:15 Project management has different responsibilities.
  • 01:18 Project management manages the projects that are needed to enable the ops
  • 01:22 management to do their job.
  • 01:24 Project managers will create the processes and systems that ops management then runs.
  • 01:30 Project management is normally making the major changes that are needed for
  • 01:34 the future of the business.
  • 01:36 So a way to frame this is that project management is responsible for
  • 01:40 the future and ops management is responsible for today.
  • 01:44 That doesn't mean that project management and
  • 01:46 operating management don't work together.
  • 01:48 They often interact at the beginning and end of a project.
  • 01:52 At the beginning,
  • 01:53 operations managers are often the stakeholders who request the project.
  • 01:58 Sometimes individuals from ops management will be
  • 02:00 among the reviewers on project progress.
  • 02:04 But definitely, at the end of the project, ops management or project management
  • 02:07 must jointly manage the transition of the project results into normal operations.
  • 02:13 Another point of intersection is that the result of the projects must be compatible
  • 02:18 with the business systems and any operational standards or
  • 02:21 governance activities that are used.
  • 02:24 It's part of insuring that the project results can truly impact the business and
  • 02:28 create the business benefits.
  • 02:31 Another time of intersection is when the business is undergoing change.
  • 02:35 When the project was initiated, it was aligned with the operational strategy.
  • 02:39 But if the strategy changes, let's say that there is an acquisition or
  • 02:43 a regulatory change, then the strategy may need to change and ops may come back and
  • 02:48 change the project goals and objectives midway through a project.
  • 02:52 Which brings us to the point of business value.
  • 02:56 Most projects are undertaken to increase business value.
  • 03:00 The project management body of knowledge, the PMBOK Guide, defines business value
  • 03:04 as, the net quantifiable benefit derived from a project endeavor.
  • 03:09 The benefit may tangible, intangible, or both.
  • 03:13 This has a few implications.
  • 03:14 Project success based upon the business value
  • 03:19 needs to be clear at the time of project initiation.
  • 03:22 The project team needs to understand how they will be measured.
  • 03:25 This clarity provides focus during project execution.
  • 03:29 Business strategy defines the organization's perspective
  • 03:33 on business value.
  • 03:34 It is unique to each organization because each organization's strategy is unique.
  • 03:39 Each organization measures success differently.
  • 03:42 Sure, there's on-time, on-budget, full scope and quality, but
  • 03:46 we're talking about the business value success.
  • 03:49 The portfolio prioritizes the strategy and determines what types of projects and
  • 03:54 programs are needed.
  • 03:56 Programs ensure that the project have been aligned with the strategy and
  • 04:00 that an optimal use of resources is being employed.
  • 04:04 And projects ensure that the deliverables get done.
  • 04:08 So the bottom line is that project management creates project results
  • 04:13 which then enable operations management to
  • 04:16 deliver business value on an ongoing basis.

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PMI, PMP, CAPM and PMBOK are registered marks of the Project Management Institute, Inc.

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