Organizations utilize three methodologies to oversee projects and achieve corporate objectives: project management, program management, and portfolio management. Although the three disciplines are interconnected, they each play a distinct function in project management and have distinct goals.
Here's a high-level overview of what each discipline comprises, the primary responsibilities connected with each, and the contrasts between them.
What is a project?
Before getting into project, program, and portfolio management, it's important to understand how project management specialists interpret the term "project."
The professional definition of a project is based on how the phrase is frequently used, but it also emphasizes some specific features, defining the term as a series of stages that must be completed to accomplish a specific end.
A project, according to the Project Management Institute (PMI), a nonprofit professional organization committed to the project management discipline, is a "temporary effort to create value through unique products, services, and processes." Timetables differ. Some initiatives are initiated to swiftly remedy a problem, while others last for a long time. Regardless of the type of project, "projects are amalgamations of tasks, activities, and deliverables that must be structured and executed carefully to achieve a desired outcome," the Project Management Institute (PMI) said.
According to Gartner analyst Robert Handler, research vice president at the consultancy who specializes in portfolio management, "it's something that is instituting change; it's something different than standard operating practices; it has some degree of risk; and it is finite, with a beginning and an end."
What is project management?
Project management is the activity of successfully bringing a project from start to conclusion on schedule, on budget, and to the desired specifications by employing defined concepts, procedures, policies, and tools."It's trying to address task and execution management," said Bob Pope, managing director of management consultancy firm Swingtide. "It's dealing with fixed timelines and defined requirements, with a managed cost expectation, and with a very defined view of deliverables and what the criteria are for success."
PMI defines project management as having five processes:
- initiating
- planning
- executing
- monitoring and controlling
- closing
Project management, commonly abbreviated as PM, begins with a project charter, which specifies the project, its goals, objectives, and resource requirements, as well as any risks and anticipated problems in effectively completing it.
To steer the project from inception to conclusion, project management employs a variety of approaches. The waterfall approach is a standard methodology that demands tasks to be done in a specific order, with progress monitored by hitting predetermined milestones. Another popular methodology is the Agile approach, which divides work into smaller components that are delivered in shorter cycles in an iterative fashion, allowing for continuous changes based on feedback.
What is the role of a project manager?
Project managers are in charge of ensuring that projects are finished effectively. To do so, they must define the tasks required to accomplish the project, develop a timetable for doing those tasks, and obtain the resources required to execute the project on time, within budget, and with the desired output.
In most organizations, project managers lead teams from several functional areas that are required to collaborate throughout the project to achieve the desired goal. Project managers must have good leadership, interpersonal, and communication abilities to accomplish this.
Project managers must also manage risks and problems by putting in place proper controls and creating solutions to overcome bottlenecks when they arise.
What is program management?
Although a project is, by definition, a limited effort with a beginning and an end, most businesses have numerous projects going on at any given time and may have hundreds or thousands going on over the course of a year. And those numerous unique ventures rarely, if ever, have much in common. In fact, businesses generally have numerous projects, each of which must be completed successfully in order to achieve an organizational goal. A program is made up of these related projects.
The Program Management Institute (PMI) defines a program as "a group of related projects managed in a coordinated manner to obtain benefits not available from managing them individually."
A program could be a product launch or a store opening, as each of those events requires the completion of numerous projects. A program in an IT department could involve the integration of workers, data, and applications from a recently acquired company into the primary organization's IT systems and network.
Program management is the discipline of managing a program's collection of projects using specified policies, processes, procedures, and tools. It ensures that a company achieves the desired end of all work while also maximizing the value of all initiatives.
"A program is [a set of] interconnected projects that share some commonality—like an objective," Handler explained. Program management is the layer of management that sits on top of it, on top of those interconnected programs, to provide some coordination." He also mentioned that program management aids in the decision and allocation of resources.
According to Handler, program management, like project management, ensures that teams have the resources they need when they need them by coordinating, prioritizing, and scheduling so that all project teams can complete their work, deliver their projects, and meet the ultimate goal on time and on budget.
What is the role of a program manager?
Given that definition, Pope stated that program managers are tasked with keeping those multiple interconnected projects aligned, ensuring that they are sequenced in the appropriate order so that foundational projects are completed first so that later ones dependent on their completion can be completed, and scheduling them so that one does not hinder or delay another due to competing needs for the same resources.
"Program managers have more business management responsibilities [than project managers], with oversight of multiple projects and dealing with personnel as well as internal and external sources."
It's vital to remember that program managers aren't in charge of any of the projects in their programs on a daily basis; instead, they're in charge of supporting the project managers' work and ensuring the project managers have everything they need to succeed. They are also in charge of coordinating the projects and their interdependencies, ensuring that all projects are carried out as planned and prepare the path for the program's effective completion.
As part of that, program managers are expected to identify risks and difficulties that could cause their projects to be delayed or derailed, and to adopt the proper risk management and governance rules and controls to limit or mitigate those risks and challenges.
They're also charged with the following duties:
- allocating and organizing resources across projects;
- matching project deliverables, or outputs, with the program's result or objective
- financial management for the program
- overseeing the program documentation
- tracking the progress of each project as well as the overarching program
- Managing communication between project teams and program stakeholders; addressing issues, challenges, and roadblocks; and realigning deliverables as needed.
Successful program managers often have project management expertise and have managed large, complicated programs, giving them the abilities needed to manage the intricacies that occur at the program level.
Furthermore, program managers are typically well-versed in project management, program management, and business management. They frequently have advanced degrees and/or qualifications, such as PMI's Program Management Certification, and are knowledgeable about budgeting, communication, scheduling, resource allocation, and problem-solving.
What is portfolio management?
If program management brings together connected initiatives, project portfolio management, or PPM, brings together all projects and programs, related or not, to acquire a strategic view of such endeavors and guarantee such work supports the organization's overall objectives.
Many people think of portfolio management, also known as project portfolio management, as the link between an organization's strategic goals and the projects and programs that must be completed to achieve those goals.
This concept distinguishes and elevates portfolio management above project and program management. "The next layer up is the portfolio." "Program managers carry out the game plan, but portfolio management creates the game plan," he continued.
Portfolio management, according to PMI, is a discipline that "ensures an organization can leverage its project selection and execution success," adding that "it refers to the centralized management of one or more project portfolios to achieve strategic objectives."
Portfolio alignment, continual portfolio flexibility, and value-driven decision-making are three fundamental components of good portfolio management, according to Gartner.
Handler, the Gartner analyst, went on to say that organizations with a mature portfolio management practice outperform their competitors; in fact, according to Gartner research, "enterprises with mature strategic portfolio management practices are twice as likely as their competitors to achieve their business outcomes."
What is the role of portfolio managers?
Portfolio managers are thus tasked with conducting strategic assessments of all projects and initiatives. They have the authority to prioritize initiatives based on their importance to the organization, their ability to deliver the most value, and/or their ability to help the organization reach its objectives.
The following are the tasks of a portfolio manager:
- creating a pipeline of projects and programs;
- aligning that pipeline with enterprise goals;
- ensuring that those projects and programs are effectively and efficiently managed throughout their lifecycles;
- risk management;
- realigning and reprioritizing when enterprise objectives shift;
- communicating to enterprise leadership the expected ROI for planned projects and programs;
- and ensuring that completed projects and programs deliver or exceed their projected ROIs.
Project vs. program vs. portfolio management: What are the differences?
Project management, program management, and portfolio management are all interwoven disciplines, but each has a distinct role in the company and necessitates a particular set of abilities.
Here is a breakdown of how their disciplines differ:
Project Management
- Project managers work on a project-by-project basis.
- The emphasis is solely on resource management within the context of the project.
- Delivering projects on time, on budget, and to specification is what defines success.
Program Management
- Interconnected projects are managed by program managers.
- Resources are coordinated and scheduled among all projects in the program to ensure that all projects receive what they need, when they need it, even if multiple projects require the same resources.
- Success means that all projects in a portfolio are completed effectively.
Portfolio Management
- Strategic value is assigned to projects and programs.
- Portfolio managers prioritize projects and programs based on ROI, comparing the expenses of resources necessary against the expected value of the projects and programs.
- Success means that completed initiatives and programs meet or surpass their value proposition.
Quiz - Exam Preparation
Question 1: Why is Project Management important?
A) To coordinate related project within a program
B) To manage resources and stakeholders effectively
C) To acchieve organizational success though portfolio management
D) To meet project requirements within budget, time and quality standards
Explanation for the best answer: The best answer is (D) "To meet project requirements within budget, time, and quality standards." Projects have specific requirements to meet, such as completing within a budget, meeting scope requirements, and providing quality standards. Project Management is crucial to ensure that these requirements are fulfilled and that the project is completed successfully.
Question 2: What is the purpose of Program Management?
A) To acchieve economies of scale
B) To decrease the risk within program
C) To prevent conflicts between unrelated projects
D) To manage individual project seperately
Explanation for the best answer: The best answer is (B) "To decrease the risk within a program." Program Management focuses on coordinating and managing related projects to prevent conflicts and decrease risks. While achieving economies of scale is mentioned as an additional value, the primary purpose is to minimize risk within a program.
Question 3: Why might Program Management not be necessary?
A) To better manage resources and stakeholders
B) To acchieve economies of scale
C) To prevent conflicts between projects
D) If it doesnt add value to the projects within the program
Explanation for the best answer: The best answer is (D) "If it doesn't add value to the projects within the program." Program Management is not a necessity; it is only required if it adds value, such as achieving economies of scale or better resource and stakeholder management.
Question 4: When is Portfolio Management necessary?
A) To organization success
B) To reduce risks and better manage resources and stakeholder
C) To coordinate related projects
D) When projects have clear strategic objective
Explanation for the best answer: The best answer is (A) "To achieve organizational success." A Portfolio consists of programs, projects, and sometimes operations with the same strategic objective. Portfolio Management is needed to ensure organizational success and to manage risks and resources effectively. While options B and D are mentioned in the lecture as potential benefits of Portfolio Management, the primary purpose is to achieve organizational success.
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