Many people and organisations today have a new, or renewed, interest in project management. In the past, project management primarily focused on providing schedule and resource data to senior management in just a few industries, such as the military and construction. Today’s project management involves much more, and people in every industry and every country, manage projects. New technologies have become a significant factor in many businesses, and the use of interdisciplinary and global work teams has radically changed the work environment.
Projects make up a significant portion of work in most business organisations or enterprises, and successfully managing those projects is crucial to enterprise success. Two important concepts that help projects meet enterprise goals are the use of programs and project portfolio management.
There is often a misunderstanding about the terms Portfolio, Programme and Project Management when it comes to programme management. Sometimes a programme is called a project. Sometimes a project is called a programme. In addition, sometimes project portfolios and programmes are mistakenly used interchangeably. Given below is an attempt to explain the basic differences between Projects, Programmes and Portfolios.
What is a Project?
Most people have a common understanding of a project. The PMBOK definition nicely encapsulates this as “A project consists of a temporary endeavour undertaken to create a unique product, service or result “
ISO Definition: A project is a unique process consisting of a set of coordinated 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.
Project management is “the application of knowledge, skills, tools and techniques to project activities to meet the project requirements.”
What is a Programme?
Views on “what is a programme?” vary quite a lot. Typical definitions are:
- A complex project
- A set of related projects
- Either of the above with the aim of changing the organisation
PMI Definition: A group of related projects managed in a coordinated way to obtain benefits and controls, not available from managing them individually. Programs may include elements of related work outside of the scope of discrete projects in the program.
Programme management is the process of managing several related projects, often with the intention of improving an organisation’s performance.
What is a Portfolio?
PMI Definition: A collection of projects or programmes and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. The projects or programmes of the portfolio may not necessarily be interdependent or directly related.
- Projects Example – Integration of HR system with Oracle apps
- Programme Example – IT Transformation programme
- Portfolio Example – NASA’s space programme
- Project Scope – Have defined objectives and scope is progressively elaborated upon during the project life cycle.
- Programme Scope – Wider scope compared to projects and more focused on the benefits
- Portfolio Scope – The scope is driven by the strategic business objective that the portfolio is created to address.
- Projects Success criteria – Success is measured by the product and project quality, timeliness, budget compliance, and degree of customer satisfaction.
- Programme Success criteria – Success is measured by the degree to which the programme satisfies the needs and benefits for which it was undertaken.
- Portfolio Success criteria – Success is measured in terms of the aggregate performance of portfolio components and on the long term value creation to investors and stakeholders.
- Project Schedule – The Project schedule is the time taken to create the deliverables expected from the project
- Programme Schedule – The Program schedule is essentially the aggregation of the schedule of the programme components
- Portfolio Schedule – The Portfolio does not have a schedule. Individual programmes/projects that facilitate achieving the business objectives will have their respective schedules,
- Project Risk Management – Risks are typically considered as threats.
- Programme Risk Management – Risks are considered as opportunities but sometimes as threats as well.
- Portfolio Risk Management – Risks are considered as a deviation from stakeholder expectations and managed through portfolio balance.
Monitoring and Control
- Project Monitoring and Control – The Project Manager directly monitors and controls the activities and deliverables.
- Programme Monitoring and Control – The Programme Manager uses the programme governance mechanism for monitoring and control.
- Portfolio Monitoring and Control – The Portfolio Manager monitors the aggregated performance and value indicators
- Project Leadership style – Is mainly execution-oriented. The Project Manager is part of the team.
- Programme Leadership style – The Programme Manager is the leader with the vision. He or she assists in relationship and conflict management
- Portfolio Leadership style – Portfolio Managers add value to the portfolio decisions
Rules to recognise Project, Programme and portfolio
There are a couple of rules of thumb that you can use based on the standards.
- When it comes to the value or benefit derived from a given initiative, if the organisation can benefit from the components, even if the entire effort is not 100% successful, then we are dealing with a program. However, if the failure to deliver one component of the initiative will deem the whole effort to failure, then we are dealing with a project.
- On efforts that we deem as programs, the organisation needs to be able to staff at least 1 programme manager and 2 or more project managers on the various projects that make up the programme. If we find ourselves in a position where there are only one person responsible for the “project management” activities and we want to divide the effort into a programme, we are opening ourselves to a variety of risks.
- Portfolios are totally different animals from projects or programmes. A portfolio can contain multiple projects and/or programmes. It can also contain work that is not project-oriented. The primary focus is on managing organisational investment in initiatives in such a manner as to maximise the benefit of such an investment. A portfolio can be managed by an individual or a group of people. As such, the distinction between a portfolio versus a programme is a lot easier to understand. Furthermore, organisations may also opt to have multiple portfolios that can be managed separately. These could include a marketing portfolio, an IT portfolio and so forth.
How CBIS can help you
Please contact us if you need more details on our training and consulting services and how our expert team can assist to manage your Lean and Six Sigma project successfully.