As the saying goes, there is always room for improvement, and organizations are constantly looking for ways to improve processes and optimize resource utilization. If an organization is big and juggling many projects at the same time, it is difficult for them to better utilize their resources if all projects are performed in isolation.
So, they manage projects in groups to use the resources efficiently.
Now, if an organization has more than one project, they will deal with them under a program or portfolio.
The distribution of projects under a program or portfolio depends on the nature and the type of project. Programs are managed through program management and portfolios are managed through portfolio management.
To manage a project under any of the above, it is necessary to understand the concepts well.
Therefore, in this blog post will discuss projects, programs, and portfolios and their management. Collectively, these terms are known as the 3Ps of project management.
A project is the lowest level in the hierarchy of project, program, and portfolio.
According to the PMBOK Guide, “A project is a temporary endeavor undertaken to create a unique product, service or result.”
So, you can say that the nature of a project is temporary; once the project achieves its objective, it no longer exists, and the objective of the project is to create a unique product, or develop a system to provide you with a service or the result.
For example, assume you have been given a project to set up a call center for a company. You complete the project, set up the call center, and hand it over to your client. Now your client can provide a support service to their customers.
Please note that once you hand over the product to the client, your project will be completed and closed. You will disband your team; members will be separated, since the nature of the project is temporary.
It is not necessary for your team members to be located in the same place; sometimes your project team may include members located outside your geographic location. In this case, you will call your team a virtual team.
As a project manager, you will be responsible for managing projects, and the success criteria being timely completion, under budget, and conformance to the requirements.
Project management is about managing projects, and it helps projects achieve their objectives. The processes include initiating the project, developing a plan, executing the project, controlling the project activities throughout its lifetime, and finally handing over the output of the project to the client, and closing the project.
Project management is the application of knowledge, skills, tools, and techniques to meet project requirements.
A program is a group of related or similar projects managed in a coordinated way to get the benefits and control not available from managing them individually. This means that in a program, you will have multiple projects, which are either similar or related to each other, and you manage them at a higher level.
For example, assume you have two projects: the first is to construct a school building and the second project is to construct an office building. Since these two projects are similar, you will keep them under a program.
The person responsible for managing the program is the program manager. The success criteria for a program is the degree to which it satisfies its objective.
Programs are managed under program management, which is defined as the centralized, coordinated management of a program to achieve its strategic objectives. You only manage the interrelated or similar projects as a group to accomplish the desired result.
The objective of program management is to optimize the resource utilization among projects and reduce the friction to increase the organization’s performance.
The Difference Between Project Management and Program Management
The following are a few differences between project management and program management:
- In project management, you manage one project, while in program management you manage multiple projects.
- A project can be a part of a program, but a program cannot be a part of a project.
- Project management addresses the management of the project; while program management helps you set the project management processes and measure the project results.
The Benefits of Program Management
A few benefits of program management include:
- Less conflict among projects
- Optimal utilization of resources
- Resource constraints are minimized
- Better communication and coordination among projects
- Improved organizational performance
A portfolio refers to a group of related or unrelated projects or programs. A portfolio can consist of multiple programs or multiple projects. It can have multiple, dissimilar projects because portfolio management deals with two or more unrelated projects. Conversely, in program management, only related projects are managed.
For example, assume you have three projects: the first is to construct a building, the second project is to conduct research on the impact of motor pollution on the environment, and the third project is to set up a call center.
How are you going to manage these projects?
You will manage them by keeping them under a portfolio because they are neither related nor similar to each other.
Portfolio manager manages portfolios. The success criteria for portfolio is the combined performance of its components.
Portfolios are managed under portfolio management. It has a bigger scope and objective than program management.
There is centralized management in portfolio management, that individual’s job is to identify, prioritize, and authorize the projects or programs. This centralized management manages the projects or programs to achieve the organization’s strategic objectives.
Portfolio managers set the priorities of projects based on the leadership’s agreed-upon business objectives. They select the program or projects under a particular portfolio and make sure that they provide the most benefit to the organization.
Please note, although portfolio management sets the priority of the projects or programs in a group, it does not oversee any individual project or program.
The Difference Between Portfolio Management and Program Management
There are a few differences between portfolio management and program management, including:
- Program management manages similar projects while portfolio management manages dissimilar projects or programs.
- The scope of program management is broader than the project scope, and a portfolio has an organization-wide scope, which changes with the strategic objectives of the organization.
The Benefits of Portfolio Management
Some benefits of portfolio management include:
- Optimal allocation and utilization of resources among projects or programs
- Constant support to projects or programs
- Fewer conflicts and better communication among projects or programs
- Better coordination among projects or programs
As you move from project management towards portfolio management, the scope and objectives will become larger and larger. In project management, you perform micro-management, and in portfolio management, high-level macro-management is required. Program management and portfolio management facilitate better communication and coordination among projects and programs, resulting in enormous benefits to economies of scale and fewer risks.
These are essential topics from a PMP exam point of view, and you are going to see some questions on these topics on your exam. Make sure you understand these topics well.
How are you involved with a project, program, or portfolio? Please share your thoughts in the comments section.