Project, Program or Portfolio Management?
By Terry Deacon
The terminology used in project management can be confusing. Even “project management” has multiple meanings. In the past it was only associated with projects, but two decades ago that began to change. Today the term project management is understood to include program management and portfolio management.
The distinction between a project, program and portfolio is generally not well understood. However, it is important to know the difference because each has a special role to play. They need to be managed differently if the organisation’s strategy is to be successfully transformed into reality.
Clearing up the confusion
What’s the difference between a project, program and portfolio? This is clarified in three watershed documents published at the end of 2007.
In the USA the Project Management Institute (PMI®) published “The Standard for Program Management” and “The Standard for Portfolio Management”. In the United Kingdom the Office of Government Commerce (OGC) published their “Managing Successful Programmes”.
You may ask, why “program” in the USA and “programme” in the UK? In North America they use “program” for a group of related projects and for computer software. In UK, RSA, Australia, etc. they use “programme” for a group of related projects, but “program” for computer software. I shall use program for a group of related projects in this article.
What is a Project?The International Organisation for Standards (ISO) has a rigorous definition of a project. “A project is a unique process consisting of a set of co-ordinated and controlled activities with start and finish dates, undertaken to achieve an objective conforming to specific requirements including the constraints of time, cost and resources.”
What is a Program?The PMI describes a program as: “A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.” Programs may include elements of related work outside the scope of the discrete projects in a program (e.g. ongoing operations such as maintenance or research). Programs are a means of achieving organisational objectives and realising benefits, often in the context of a strategic plan.
What is a Portfolio?The PMI describes a portfolio as: “The effective, centralized management (including identifying, prioritizing, authorizing and controlling) of a collection of projects or programsand other work that are grouped togetherto meet strategic business objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related”.
The term program / program management has come to mean different things to different people. Some organizations and industries refer to ongoing or cyclical streams of operational or functional work as programs e.g.
The disciplines of operational or functional management address the above type of work, therefore this form of program is not considered in this article. This could be an area where the concept of Management By Projects (MBP) is applicable.
True program management deals with specific, finite programs i.e. they have a predetermined beginning and end for its group of component projects. For example:
Programs and projects can be executed under portfolio management. Examples are:
Some organizations refer to a large project with sub-projects as a program. The management of large projects remains within the discipline of pure project management, and as such, is already covered in the PMI’s PMBOK® Guide—Fourth Edition. Examples of this are:
If an endeavour is split into multiple, related projects with explicit management of the benefits (e .g. optimising resource usage and benefits), then the effort becomes a program, and program management is applicable to managing that effort. For example:
It is important to know the difference between a project, program and portfolio because each has a special role to play and needs to be managed differently.
Project, program and portfolio managers can now focus on the key success factors in their appropriate field, thus enhancing the probability of successfully transforming their endeavours from strategy to reality.
Terry Deacon is CEO of ProjectPro Management Services, an accredited provider of project and program management training. The next program management course will be held in Gauteng. See www.projectpro.co.za or call 012 346 6674 for details.
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