Project Management and Operational Management - Essay Example

An Analysis of the similarities and differences in the scope of project management and operational scheme’ or ‘system management. There are several management strategies in achieving an organization’s business objectives, especially in enhancing the ability of an organization to deliver. Two of the most notable among these are the project management and operations management. This paper will analyse the similarities as well as the differences between these principles. As the ensuing discussion will present, both are incumbent in an organization, albeit in varying degrees, and their usage depend on the nature of their organization’s goals and culture. There are scholars who argue that the scope as well functions of project and operations often overlap, hence our analysis will be presented mostly within this grey area – when do we draw the line, when do they complement, and so on – and in the process outlining the support for our thesis. Management Principle Generally speaking, the relationship between project and operations management may be illustrated by the following situation: Thien is a project manager in his organization. Vice Presidents, directors and managers in other departments approach him daily whenever there is a new product or project to be investigated, initiated or launched. For instance, yesterday the Marketing Manager requested him to direct a campaign involving an invitation for clients in their database to visit the organization’s web site and see their new product lines. However, part of this project requires the website to be updated on a daily basis. The campaign sounds just like a job for the project manager but the cyclical aspect of maintaining the website seems to be a facet of an on-going operations. How was this possible? Let us outline the nature of projects and operations and, henceforth, eliminate the grey area. Project Management According to Marion Haynes, project management differs from other management schemes in two significant ways. “First, while department managers or managers of other organizational units expect their departments to exist indefinitely, project managers focus on an undertaking with a finite life span. Second, projects frequently need resources on a temporary basis, whereas permanent organizations try to utilize resources full-time.” (p. 3) As its name connotes, project management concerns itself with a project but only one. It has a beginning and an end – a time-bound process - since it is a one-time endeavor. According to Baum, evaluation caps the five stages of project management so there is a closure to the cycle. (Cracknell 2000, p. 95) It may be employed within the scope of an operation or other business processes. Most stakeholders in this management strategy believe that it is a linear process where operations management usually takes charge upon its function’s end. However, there are also stakeholders who view project management in cyclical terms, naturally confusing functions and scope with other management processes such as operations. There are organizations that are project driven and there are those which are not. Harold Kerzner offered us an explanation on each of these: In a project-driven organization, such as construction of aerospace, all work is characterized through projects, with each project as a separate cost center having its own profit-and-loss statement… In the non-project driven organization, such as low technology manufacturing, profit and loss are measured on vertical or functional lines. In this type of organizations, projects exist merely to support the product lines or functional lines. (p. 19) Project management, hence has varying characteristics, which in turn are based on the nature of the organizations employing this management strategy. Oftentimes, especially in non-project-driven organizations, it works to support operations and other organizational departments. Operations Management Operations management, on the other hand, is seen as one of the most crucial component of any organization’s strategy. This is the case since its responsibility involves the production of goods and services and making sure that the organization’s operations are working effectively and efficiently. Robert Kaplan and David Norton (p. 65) stressed that excellent operations management is one of the cornerstones of sustainable strategies. Without which, companies will find it difficult to achieve improvements in the quality, cost, and responsiveness of manufacturing and service delivery process. At present, operations decisions affect a company’s profitability as it determines the organization’s output, which is a significant factor in the global scope of the current business landscape. Operations, has a wider scope than project management. While a project manager undertake one specific project, operations deal with a wide range of issues including management of employees, meeting customer needs, ensuring profitability and providing links with distributors and suppliers. (Greasly, p. 1) Project management may be called upon to execute a specific project within an area of the aforementioned operational functions. Similarities Loosely, project and operations management share many characteristics and commonalities. Joseph Phillips, cited some of these: Both involve employees Both typically have limited resources: people, money, or both Both are hopefully designed, executed, and managed by someone in charge One would find that the similarities boils down to one particular factor, which is the concept of the resources. People, money, person in charge – these tools are utilized to achieve specific ends, hence, project and operations managers would contend with almost the same difficulty or advantage in the procurement of these depending on the availability and constraints existing within the organization. Scope of Work Project and Operations management are also marked from each other by their respective management responsibilities. For instance, project management is composed of several different types of activities, and project managers must work on: Planning the work or objectives Analysis & Design of objectives Assessing and controlling risk (or Risk Management) Estimating resources Allocation of resources Organizing the work Acquiring human and material resources Assigning tasks Directing activities Controlling project execution Tracking and reporting progress Analyzing the results based on the facts achieved Defining the products of the project Forecasting future trends in the project Quality Management Issues Management Operations managers, meanwhile, must execute activities such as: Business Planning: What strategy should be followed? Product design: What product/service should the organization provide? Resource planning: What labour, materials and plant are required? Location and layout: Where and how do we operate? Job design: How do people and technology work together? Quality Control: Are standards being met? (Greasly, p. 2) Depending on the project being undertaken, operations, then, makes use of project management either for an initiative or as part of an operation with wide-ranging departmental collaboration. Challenges Both projects and operations management have their respective strengths and weaknesses in the course of achieving objectives. The challenges they would have to face would show the extent of each other’s capacity, importance within the organization, as well as their differing nature especially in the area of problem solving. Kerzner listed some of the hardest parts in project management. (p. 19) He argued that not all projects have the same project management requirements, and so they cannot be managed identically. Also, it was underscored that only a portion of the organization understands project management and sees the system in action because project staffing is on the local basis. Finally, there is a heavy dependence on subcontractors and outside agencies for project management expertise. Although the operations manager inherit some challenges of the project management such as change management, his main difficulties are confined with situations that exist when the project is completed. To illustrate: When a service is launched, there are many aspects which have to be handled and coordinated by operations managers. The delivery system itself has to be balanced, resourced, tested and operational before the set date. Many different features need to work together smoothly to satisfy the first customers and give the impression of control and efficiency… Failure by the operations managers to do, or oversee the completion of, any of these tasks satisfactorily will almost certainly negate the promotional efforts of the marketing and sales function, and impetus will be lost. (Bicheno et al., p. 89) Operational problem happen behind the scenes such those about timing, logistics, human resources and so on. Also, operations must deal with the task of understanding: 1) the importance of demand and capacity tradeoffs, 2) the implications of waiting time in customer satisfaction, and, 3) the relationship between processes and revenues. (Burke and Cooper, p. 212) Conclusion We must remember that the key similarities between project and operations starts with the fact that they both require management and therefore both roughly adhere to general management principles. Investing resources are similarly within their respective areas, therefore they contend with the same issues such as acquisition, people’s skills, leadership and so on. Of course, how they figure within the scheme of things within their respective departments differ due to project and operation’s contrasting nature. We have learned that assets created by the project form a ‘scheme’ or a ‘system’, which is, in turn, put into operation to yield a stream of benefits to an organisation. This relationship between project and operations highlights their differences. As explained, project management is time-bound whilst operations is cyclical, continuing on a rolling basis. Where project management’s function ends, operations management takes over. Their use of resources differs since one utilises it on a temporary basis while the other permanently uses it. In a related front, project relies on the investment of capital to keep on functioning whilst operations requires continuing systems for finances and other resources to operate. References Bicheno J and Eliott BR 1997. Operations Management: An Active Learning approach. Blackwell Publishing Burke R and Cooper, C 2005. Reinventing Human Resources Management: Challenges and New Directions. UK: Routledge Cracknell BE 2000. Evaluating Development Aid: Issues, Problems and Solutions. Sage Publications Inc Greasly A 1999. Operations Management in Business. Nelson Thornes Haynes M 2002. Project Management: Practical Tools for success. Thomson Crisp Learning Kaplan R and Norton, D 2004. Strategy Maps: Converting Intangible Assets Into Tangible Outcomes. Harvard Business School Press Kerzner H 2003. Project Management: A Systems Approach to Planning, Scheduling, and Controlling. John Wiley and Sons Phillips J 2003. PMP Project Management Professional Study Guide. McGraw-Hill Professional Read More