ISO Starts New Program and Portfolio Management Standards
After the successful launch of ISO 215000: Guidance on Project Management in September 2012, the efforts of technical committees TC 258 around the world, now shift to developing standards for portfolio and program management.
Program (programme) management is the process of managing several related projects, often with the intention of improving an organization's performance, by realising one or more strategic objectives.
According to the Project Management Institute’s (PMI), The Standard for Program Management, 2nd Edition "A Program is a group of related projects managed in a coordinated manner to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside of the scope of the discreet projects in the program. Some projects within a program can deliver useful incremental benefits to the organization before the program itself has completed."
A South African team comprising the local ISO Technical Committee holds regular meetings at the SABS in Pretoria to provide valuable input to the global initiative to develop Program and Portfolio Management standards.
The Program Manager has oversight of the purpose and status of all projects in a Program and can use this position to support project-level activity to ensure the overall program goals are met, by providing a decision-making capacity that cannot be achieved at project level. Typically in a program there is a need to identify and manage cross-project dependencies and often the PMO (Program or Project Management Office) may not have sufficient insight of the risk, issues, requirements, design or solution to be able to usefully manage these. The Program manager is well placed to provide this insight by actively seeking out such information from the Project Managers although in large and/or complex projects, a specific role may be required. However this insight arises, the Program Manager needs this in order to be comfortable that the overall program goals are achievable.
There are two different views of how programs differ from projects. In one view, projects deliver outputs, discrete parcels or "chunks" of change; programs create outcomes. In this view, a project might deliver a new factory, hospital or IT system. By combining these projects with other deliverables and changes, their programs might deliver increased income from a new product, shorter waiting lists at the hospital or reduced operating costs due to improved technology.
The other view is that a program is nothing more than either a large project or a set (or portfolio) of projects . In this second view, the point of having a program is to exploit economies of scale and to reduce coordination costs and risks. The project manager's job is to ensure that their project succeeds. The program manager, on the other hand, may not care about individual projects, but is concerned with the aggregate result or end-state. For example, in a financial institution a program may include one project that is designed to take advantage of a rising market, and another to protect against the downside of a falling market. These projects are opposites with respect to their success conditions, but they fit together in the same program.
According to the view that programs deliver outcomes, but projects deliver outputs, program management is concerned with doing the right projects. According to this view, successful projects deliver on time, to budget and to specification, whereas successful programs deliver long-term improvements to an organization. Improvements are usually identified through benefits. An organization should select the group of programs that enables its strategic aims while remaining within its capacity to deliver the changes. On the other hand, the view that programs are simply large projects or a set of projects allows that a program may need to deliver tangible benefits quickly.
One view has it that these are different projects within a program. But in practice they can just as well be managed as sub-projects within a single project. Which approach to choose? Program and project management are both practical disciplines, and the answer to such a question must be "whatever works." What works depends very much on the nature of the organization in which the project or program is run.
Typically a program is broken down into projects that reflect the organization's structure. The design project will be run by the design team, the factory will manage the modifications to the production line, and so on. Organizational structure and organizational culture are key factors in how to structure a program.
The distinction between the terms "outcome" and "output" is far from clear. Each of the projects listed in the example above is designed to deliver 'things', known as 'deliverables', ‘products’ or 'outputs', and together they improve the organization. Where one draws the line between the complete single benefit that causes the improvement and its component parts is partly a matter of preference and partly a matter of the culture and structure of the organization. Either way, benefits will normally be enjoyed long after the end of the program and all of its component projects.
The point is that to achieve maximum benefits, there must be an integration of parts into a whole. Whether this integration is managed in something that is called a project or a program is of secondary importance to understanding the benefits and managing the process of integration well.
Many programs are concerned with delivering a capability to change. Only when that capability is transferred to the line management and utilized by the host organization will the benefits actually be delivered. In this view, a program team cannot, on their own, deliver benefits. Benefits can only be delivered through the utilization of a new capability.
Programs are normally designed to deliver the organization's strategy, such as an ambition to be the biggest supermarket in a region by 2015 or reduce shrinkage by 5% in a year's time.
Program management also emphasizes the coordinating and prioritizing of resources across projects, managing links between the projects and the overall costs and risks of the program. Program management may provide a layer above the management of projects and focuses on selecting the best group of projects, defining them in terms of their objectives and providing an environment where projects can be run successfully. Program managers should not micromanage, but should leave project management to the project managers.
The UK government, through the Office of Government Commerce, has invested heavily in program management. In public sector work in Europe, the term normally refers to multiple change projects: projects that are designed to deliver benefits to the host organization.
Many organizations only run one program at a time, a program containing all their projects. In Project Management Institute terminology, this is more likely to be a project portfolio than a program. Some larger organizations may have multiple programs each designed to deliver a range of improvements.
Governance is of prime concern in program management. Governance is the structure, process, and procedure to control operations and changes to performance objectives. Governance must include a set of metrics to indicate the health and progress of the program in the most vital areas.
Programs are more flexible in that they will continue after the component projects have been completed, until the benefits are realised. A program is implemented within a business environment to consistently achieve certain results for the business. Program management includes management of projects which, together, improve the performance of the organization. A program's success will be measured in terms of benefits. Benefits are the measures of improvement of an organization and might include increased income, increased profits, decreased costs, reduced wastage or environmental damage, more satisfied customers. In central or local government organizations, benefits might include providing a better service to the community.
In the course of achieving required results, business programs will normally understand related business constraints and determine the processes required to achieve results based on resources allocated.
Improvement of processes is a continuous operation that very much contrasts a program from a project.
All projects and programs in an enterprise form part of their portfolio the governance of which is achieved through what is sometimes called Entreprise Project Management (EPM). Portfolio management aims to realise the enterprise’s strategic objectives by selecting projects and programs.
ProjectPro is facilitating a 2-day workshop on Program Management from 1 to 2 November 2012 in Gauteng. To register visit www.projectpro.co.za or email email@example.com or phone 012 346 6674 for more information.
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