There are terms like project, program and portfolio frequently used in business scenarios but do we actually understand what each one of them mean? Do we actually understand how they differ from each other? Do we know the critical links between the three terms? All the three terms actually refer to the way to get something done – the well known Nike ad – “Just Do It”. Focus on what is to be done and just do it is there in a nut shell. But as we talk further about organizations, who have multiple projects, limited resources, constraints and varied priorities, its very important for us to understand what each one of the terms, namely, project, program and portfolio mean.
Project is a temporary endeavor undertaken to meet a quantifiable goal within a defined start and end date. It is an art of organizing the project components. While project management deals with a single project, program and portfolio management talk about management of multiple projects.
Program management deals with multiple projects that collectively produce and agreed business outcome i.e. they have interdependencies. Management of these interdependencies against the achievement of the ultimate objective is termed a program management. All projects in a program are related through a common goal.
However management of multiple projects which do not share a common objective or goal is termed as a portfolio. Projects in a portfolio might relate to each other through common funds, technology or stakeholders. The primary challenge of project management is to achieve all goals taking into account the typical constraints of scope, time and budget.
The second challenge is to then optimize and integrate all inputs necessary to meet pre defined objectives of a program. Program management helps in coordination of ways to obtain benefits which are not available when managing the projects individually. A typical project management approach is a 5 stage model of initiation, planning, execution, monitoring and closure.
It is not necessary for a project to go through each and every stage before it completes and there could be projects in which project will go through some of the steps multiple times. Initiation of a project helps in defining the list of project deliverables. This is done through a project charter. Once initiated, a project is planned with a list of project activities.
All the project activities are related to each other and have a defined duration, the resources required and the cost involved. All these parameters can have constraints which typically relate to schedule, resources, budget and scope. Once a project is planned, it is executed as per the planning already done for a project. Projects are monitored and controlled taking into consideration the project plan. This helps the project manager to understand how well the project is progressing so far.
Project is closed after analyzing the final outcome with complete administrative and contract closure. While a project is focused on achieving individual requirement, programs focus on achieving benefits aligned with the organizational goals and objectives. At the same time, portfolio management assures that programs and projects are selected, prioritized and staffed taking into consideration the organizational objectives.
Scope of a project is elaborated progressively during the project whereas programs have a larger scope and portfolios have a business scope. Any change in scope of programs can be triggered by factors inside or outside the program. While planning for a project, the high level information of the project is elaborated to make a detailed plan during the project. Programs are managed by high level plans which guide detailed planning at the micro level.
Projects manage project objectives but programs help in management of the vision of the organization. Portfolios at the same time are measured in terms of the overall performance of individual components of a portfolio. Portfolios are evaluated and monitored at the aggregate level. One of the key challenges of multiple projects revolves around the pressures on resources to multitask. The pressure to multitask comes from having more than one task with lack of priority for the best use of the resource.
It is very important in case of multiple for projects to gauge the benefit, the organization would get by assessment and prioritization of tasks and resources. This minimizes the queue and reduces the devastating impact of not being able to prioritize tasks and resources in the right manner. A program manager thus acts as a synchronizer to setup the sync between tasks, resources and schedules taking into account the strategic importance of all tasks and projects. It is expected by the program manager to setup a rhythm by staggering projects based on resources and priorities.