Are you working on a project? Or is what you're doing part of the daily operations of your business? Both are required in an organization and are equally valid, but it helps to understand what you're working on so you can better see where it fits into the overall strategy.
There are five main differences between project work and business as usual (often abbreviated as BAU) work. With these guidelines in mind, it should be easy to see if you are working on projects or BAU work, or both.
Time-Bound vs. Ongoing
Projects have a start, middle and end date, and are a one-off event. This is the project life cycle. In fact, the most defining characteristic of a project is that it has an end. The project manager and the team work on the project during this time. At the end, the team is usually disbanded.
BAU is ongoing. You can, of course, close down a function or stop a process if it's no longer required for the business—but even that is usually done as a project. A BAU function produces ongoing work with no foreseeable end date.
Changemakers vs. Change Identifiers
There’s a difference in how change is handled in project and BAU work. BAU teams identify the need for change, and project teams implement that change.
Because BAU teams run the business, they're also the first to know when the existing processes aren’t working and are no longer useful. When that happens, they identify the need for change.
A manager, as part of a strategic review, can suggest what changes need to be made for a unit to reach its goals. Or, a team member may make a suggestion for change. At the other end of the spectrum, you may have a full business case produced by a senior manager to deliver changes required to help their division reach its annual targets. Those working in BAU roles may also realize change is essential because of shifts in the regulatory framework or as part of the competitive landscape for the organization.
Project teams help implement all of these needed changes. Projects deliver change to and through the BAU functions using project management. This usually happens once the project has gone through a business case and senior management approval process.
Managing vs. Mitigating Risk
For business as usual functions to be effective, you’ll find BAU teams seek to mitigate all risk to operations. They work to take the uncertainty out of business for better organizational stability and repeatable processes.
By their very nature of being unique and uncertain, projects require an element of risk. The company is making a bit of a leap into the unknown just by doing a project as it introduces change and delivers something that wasn’t there before.
Project teams, therefore, approach risk in a different way than BAU teams. Project managers seek to manage risk—both positive and negative—to get the best outcomes. That might include mitigating risk to try to limit the likelihood that it is going to happen, but it includes other risk management strategies as well.
Capitalizing vs. Not Capitalizing Costs
Projects can be usually be capitalized, and often BAU cannot be since you rely on operating expenses for your ongoing business as usual work. In other words, the accounting treatments for projects and other tasks are different.
Project funding often relates to bringing an asset into service—meaning the costs can be capitalized. In some cases, depending on where you are in the world and your local accounting regulations, you can even take project costs below the line.
BAU costs are normally considered operating expenditures and are tracked in the profit and loss accounts of the company.
Project funding and business funding, in general, is a very specialized area so it’s always best to take advice from your finance experts before making judgments about what should and shouldn’t be capitalized in your organization. Accounting rules vary by country, and even by organization where individual businesses have particular processes and ways of doing things.
Cross-Functional vs. Functional Teams
Finally, there’s a big difference in the makeup of project and BAU teams. Projects tend to involve multi-disciplinary teams of experts brought together to deliver a particular output.
Project teams are made of people filling particular roles. These aren’t job titles, but positions within the project with distinct responsibilities. The main roles on a project team are:
- Project sponsor
- Project manager
- Senior supplier (the organization responsible for doing the work, which could be an internal team like IT or an external contractor or vendor)
- Customer (this could be an internal customer such as a different department manager, or, in a client services organization, the customer for whom you are delivering the project)
- Subject matter experts (people brought onto the team either for the duration of the project or part of it who use their expertise to contribute to the project’s success).
BAU work, on the other hand, is managed by functional teams. They are experts in their own right but grouped together as a division. There is normally less cross-functional overlap with other departments, and they'll have defined targets and a vision for the role the department plays in the company. An example would be a customer service team that works as part of a larger customer service division handling calls and emails from customers about your product.
There can be some overlap as people from BAU teams are called to take part in project teams.
BAU and Project Conflicts
Project work and BAU work can sit nicely alongside each other, but there can often be tension. It happens because projects try to change the status quo.
Second, when you are asking people to join your project team, they can suffer from a conflict of loyalties. Is their first responsibility to their day job or to the project? Clear objectives and a strong commitment to the project from management can help here, as well as keeping lines of communication open so they know what the priorities should be.
Third, keeping the business running is always the priority. It has an implication for project teams who might see their funding cut, key resources pulled back to BAU roles and timelines delayed because keeping the day-to-day operations of the organization going is pulling focus.