Portfolio, Program and Project Management


From a distance it seems that people use these terms interchangeably. They do however represent much different endeavours.

Trying to steer away from the “official” definitions provided by the various project management institutes and organisations I hope to explain it in a way that would be easily understood, and can be agreed upon by all professionals in the field.


Definitions:

Project Management – the discipline of planning, organizing, motivating, and controlling resources to meet specific goals. A project is a temporary endeavour with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables), undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. The temporary nature of projects stands in contrast with business as usual (or operations), which are repetitive, permanent, or semi-permanent functional activities to produce products or services. In practice, the management of these two systems is often quite different, and as such requires the development of distinct technical skills and management strategies. (http://en.wikipedia.org/wiki/Project_management)

Program Management – the process of managing several related projects, often with the intention of improving an organization’s performance. In practice and in its aims it is often closely related to systems engineering and industrial engineering. (http://en.wikipedia.org/wiki/Program_management) I would like to add that it could temporarily include the management of areas that are business as usual (or operations).

Portfolio Management (Project Portfolio Management) – centralized management of processes, methods, and technologies used by project managers and project management offices (PMOs) to analyse and collectively manage a group of current or proposed projects based on numerous key characteristics. The objectives of PPM are to determine the optimal resource mix for delivery and to schedule activities to best achieve an organization’s operational and financial goals ― while honouring constraints imposed by customers, strategic objectives, or external real-world factors. (http://en.wikipedia.org/wiki/Project_portfolio_management)

Just looking at these definitions does not distinguish large projects, from small programs, portfolios from very large programs and so on. So let’s look at what is different and then we should be able to tell them apart.

Finite Focus Components Related Objective
Project Yes Functional Delivery Yes Single
Program Yes Strategic Objectives Yes Multiple
Portfolio No Strategic Intent No Varied

This will give us some basis of comparison.

  • Portfolios do not have an end date
  • Portfolios are entirely strategic
  • Portfolios contain projects, programs and operations that does not require a specific relationship to each other
  • Portfolios don’t intend to reach a specific strategic objective, but rather address a strategic value or intent
  • Programs have a specific strategic goal that it must satisfy
  • All components in a program are included to deliver or contribute to reaching a measurable strategic goal (Could be more than 1)
  • Programs may temporarily include the management of operations
  • Programs have a start and end date within which they have to deliver on the agreed objectives
  • Projects deliver a specific outcome (product, result)

Example:

A specific aircraft manufacturer has a project portfolio in which they intend to enhance the organisation’s image, improve service delivery and secure the medium and long term financial future. Within this project portfolio a program exists to design, develop and implement the manufacturing of a new aircraft. The program contains many projects, one of which is concerned with the building of the manufacturing facility in which the aircraft will be built.

Now that this picture is becoming clear -> I have a gift…

Sorry I simply had to include this graphic J it just keeps on growing…

Please ask questions, offer differing views and comment at will.

Share, link, spread the news…

Have a great day.

 

Advertisements

6 thoughts on “Portfolio, Program and Project Management

  1. Useful info, thank you very much.
    Keep up the good writings, significantly inspiring and genuinely inspired from the reality of our times.

  2. The definitions provided are all related to what the varying disciplines do with regard to their individual roles. My question, however, is who is the Project, Programme or Portfolio Manager? A secondary question: How is this person regarded within the organisation?

    We all know, in the project management world, what the role entails. The implementation of methodology is not the question here. So who is this person in the eyes or the organisation, especially at executive and senior management level.?

    I think, once this can be clarified, the use of the terms, Project Manager, Programme Manager and Portfolio Manager might be clearly understood. Who knows!

    • Hi Dave,

      Thanks for the comment.

      A portfolio manager would typically be a head of a department, division or business unit. Within his / her environment there may be several projects and programs occurring all aimed at some specific objective.

      In the example I used in the blog I referred to the development of a new aircraft. If we continue in that vain, the aircraft maintenance manager may have existing operations, a service delivery improvement project, as well as involvement with the new aircraft design program where his organisational unit have to provide input into aircraft maintenance requirements and considerations.

      So in essence the portfolio manager would be a very senior person (manager or executive), tasked with ensuring the overall health and well-being of a discipline or concept within an organisation part of which would contain the components of the portfolio.

      The program manager may or may not be employed by the company that will receive the eventual products and services produced by the program. This person is fully focussed and committed to ensure delivery of the eventual products and services produced by the program. This does not mean that a program manager may not have line or other managerial function within an organisation, it simply means that a overwhelmingly large proportion of overall available effort would be consumed by the management of the program.

      In my view a program manager is still a very senior person but this person is accountable to produce the goods… (products and services produced by the program). Because of the strategic nature of programmes, it would be advisable that this person either have a very senior position OR have unwavering executive support. The program manager may also perform the role of project sponsor to the constituent projects within the program.

      Project managers as we know can vary greatly in seniority, authority and capability. Obviously it would help if the project manager is more senior than the project members, but that is not essential (I have successfully executed quite a few projects where a number of the project members outranked me significantly in the corporate structure without much problems.)

      I hope this gives you some ideas as to who these persons would be inside an organisation. The element that makes this difficult to pin down exactly resides within scale e.g. what NASA view as a small project could overshadow the largest program ever undertaken by company x and could exceed the size of the finance portfolio of a small country.

      Have a fantastic day
      🙂 Anton

  3. Another way to future proof your career is to always keep acquiring new skills and get certified. PMP Certification is grt if you’re at a project management level or aspire to be in http://www.pmstudy.com has a great free test if you’d like to gauge your project management knowledge.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s