Many people hear the terms projects, programs and portfolio, but are not sure what they all mean and how they fit together. All three are structures that allow us to organize certain types of work. These three concepts need to be understood by project managers.
Projects, by their definition, have a defined start and end date. There is a point in time when the work did not exist (before the project), when it does exist (the project), and when it does not exist again (after the project). This is the key determinant of whether a piece of work is a project. Projects also include a defined scope, finite budget and assigned resources. Another characteristic of a project is that they always build something. Projects are how we create new things. If you find that all you are doing is meeting, then you probably are not on a project. Projects always create one or more deliverables. Projects should be managed proactively using solid project management processes and techniques.
Some initiatives are so large that it makes sense to break them up into a set of smaller projects. These smaller projects are easier to plan, manage and finish successfully. However, the problem with breaking up work into smaller projects is that each project may start to make independent decisions that will be good for that project, but detrimental to the initiative as a whole.
The purpose of a program is to provide central management and control over a set of underlying projects that are all trying to deliver a common solution. The program allows the projects to achieve a common benefit that would be difficult for each project to achieve independently. Programs are managed much differently than large projects. It is important to understand when to create a program and how to manage programs effectively.
Portfolios are collections of work. A portfolio typically contains projects, but they can also include support, operations and other types of work as well. Portfolio management is generally performed by your manager staff. Projects are initiated, approved and prioritized at the portfolio level. The projects in the “active portfolio” are then staffed, governed, monitored and supported at the portfolio level.
Programs and projects are proposed, selected and executed at the portfolio level.
Just remember the key points. Projects are temporary endeavors to build one or more deliverables. Program are very large initiatives that are broken up into a set of smaller projects and then coordinated centrally. The projects in a program are related. Portfolios are collections of work – usually projects – and are a way to approve and monitor the projects from an organization perspective. The projects may or may not be related.
Do you need help implementing a common set of project management processes and templates? Contact us. We can help with project, program and portfolio management, plus any lifecycle model. We are experts at this type of work.