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Projects, programs and portfolios are terms that describe an increasing complexity of project related work.  Project management addresses how to manage a single unique project not necessarily programs or portfolios.

Quick reference

Project Management Foundations

Projects, programs and portfolios are terms that describe an increasing complexity of project related work. Project management addresses how to manage a single unique project, not necessarily programs or portfolios.

When to use

Project Management as a discipline is needed throughout the lifecycle of a project. Throughout a project lifecycle, from initiating to closing, it is important to understand whether your project is linked to other projects through programs or portfolios. When that linkage occurs, it can create both opportunity and threat risks on the project. The principles of project management comprehensively address the entire project and should be practiced on a daily basis.

Instructions

This section will provide the PMBOK® Guide definition of each term and a brief commentary on the implications of that definition.

Project Management

“The application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.” PMBOK® Guide.

The PMBOK® Guide also states, “Project management is accomplished through the appropriate application and integration of the project management processes identified for the project. Project management enables organizations to execute projects efectively and efficiently."

Notice that the goal of project management is not a perfect Gantt chart or an Earned Value CPI of 1.00; it is to meet the project requirements. Also notice that the project management job is one of executng the project effectively - we need to get it done, and efficiently - we need to minimize waste, delays, and nonsense work.

Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017, Page 10, Glossary definition Page 716.  

Project

“A temporary endeavor undertaken to create a unique product, service, or result.” PMBOK® Guide

Projects are meant to deliver something.  There is a specific and unique goal. In addition, projects are based upon a time period; the temporary nature implies there is a specific start and end point.  

Program

“A group of related projects, subsidiary programs and program activities managed in a coordinated way to obtain benefits not available from managing them individually.” PMBOK® Guide

A program implies multiple projects that are linked together in order to gain some type of enhanced benefit or operational synergy. Projects that are part of a program are likely to share some resources and the deliverables and the end result of one project is often used by another project in the program.

Portfolio

“Projects, programs, subsidiary portfolios and operations managed as a group to achieve strategic objectives.” PMBOK® Guide

A portfolio is much broader in scope than a project or program. It often includes operations that are created or improved by projects or programs. The strategic focus of a portfolio often leads to a longer time frame for managing it than is found in either a project or program. Generally, a portfolio manager will not be involved in the day-to-day management activities of projects or programs.

Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017, Glossary definition Page 714 and 715.  

Project – Program – Portfolio Comparison

The table on the following page is quoted from the PMBOK® Guide. The comparison is done against six project management related attributes that are approached differently based upon which level of management is being performed.

While the PMP® exam will not specifically test your knowledge on how to manage a program or portfolio, the questions may have the context that a project is part of a program or portfolio. When that is the case, the program or portfolio ramifications may be significant.

 

Projects

Programs

Portfolios

Scope

Projects have defined objectives. Scope is progressively elaborated throughout the project life cycle.

Programs have a scope that encompasses the scopes of its program components. Programs produce benefits to an organization by ensuring that the outputs and outcomes of program components are delivered in a coordinated and complementary manner

 

Portfolios have an organizational scope that changes with the strategic objectives of the organization.

Change

Project managers expect change and implement processes to keep changes managed and controlled.

Programs are managed in a manner that accepts and adapts to change as necessary to optimize the delivery of benefits as the program’s components deliver outcomes and/or outputs.

Portfolio managers continuously monitor changes in the broader internal and external environment.

Planning

Project managers progressively elaborate high-level information into detailed plans throughout the project life cycle.

Program are managed using high-level plans that track the interdependencies and progress of program components. Program plans are also used to guide planning at the component level.

Portfolio managers create and maintain necessary processes and communication relative to the aggregate portfolio.

Management

Project managers manage the project team to meet the project objectives.

Program are managed by program managers who ensure that program benefits are delivered as expected, by coordinating the activities of the program components.

Portfolio managers may manage or coordinate portfolio management staff, or program and project staff that may have reporting responsibilities into the aggregate portfolio.

Success

Success is measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction. 

A program’s success is measured by the program’s ability to deliver its intended benefits to an organization, and by the program’s efficiency and effectiveness in delivering those benefits.

Success is measured in terms of the aggregate investment performance and benefits realization of the portfolio.

Monitoring

Project managers monitor and control the work of producing the products, services, or results the project was undertaken to produce.

Program managers monitor the progress of program components to ensure the overall goals, schedules, budget and benefits of the program will be met.

Portfolio managers monitor strategic changes and aggregate resource allocation, performance results, and risk of the portfolio.

Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –Sixfth Edition, Project Management Institute, Inc., 2017, Table 1-2, Page 13. 

 PMBOK and PMP are registered marks of the Project Management Institute, Inc.

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  • 00:04 Hi, this is Ray Sheen.
  • 00:06 Let's talk today about some of the basic concepts associated with projects
  • 00:11 that will provide context for many of the questions on the PMP exam.
  • 00:15 I call these Project Management Foundations.
  • 00:18 According to the Project Management Body of Knowledge, the PMBOK Guide,
  • 00:23 a project is a temporary endeavor undertaken to create a unique product,
  • 00:28 service or result.
  • 00:29 I can virtually guarantee that that definition will be one of your
  • 00:33 exam questions.
  • 00:34 A program is a group of related projects, subprograms, and
  • 00:38 project activities managed in a coordinated way
  • 00:42 to obtain benefits not available from managing them individually.
  • 00:46 The key here is the coordination to maximize benefits.
  • 00:50 In a portfolio, it's projects, programs, sub-portfolios,
  • 00:54 and operations managed as a group to achieve strategic objectives.
  • 00:59 So to understand the hierarchy between these three,
  • 01:01 a project is laser-focused on a specific result.
  • 01:05 A program is multiple projects managed together to achieve synergy between them.
  • 01:10 And a portfolio are projects, programs, and
  • 01:13 operations all aligned around a strategic objective.
  • 01:17 The key words to remember for each is project and
  • 01:20 result, program, coordination, portfolio, strategy.
  • 01:25 Next, let's look at the management of these activities.
  • 01:29 The Project Management Body of Knowledge, the PMBOK Guide,
  • 01:32 defines project management as the application of knowledge, skills, tools,
  • 01:36 and techniques to project activities to meet the project requirements.
  • 01:40 That sounds great, but why do we care?
  • 01:43 The PMBOK Guide goes on to describe the impact or project management in this way.
  • 01:48 Effective project management helps individual, group, and public and
  • 01:52 private organizations to meet business objectives.
  • 01:55 Satisfy stakeholder expectations, be more predictable,
  • 01:59 increase chances of success, deliver the right product at the right time.
  • 02:03 Resolve problems and issues, respond to risks in a timely manner,
  • 02:07 optimize organizational resources, identify, recover or
  • 02:11 terminate failing projects, manage constraints.
  • 02:14 Balance the influence of constraints on the project,
  • 02:17 and manage change in a better manner.
  • 02:20 You read through a list like that and
  • 02:22 it becomes evident that project management must be some pretty good stuff.
  • 02:25 I definitely want it.
  • 02:27 Well, let's look a little bit deeper in the disciplines of project management.
  • 02:31 I wanna contrast projects, with programs, and portfolios.
  • 02:34 In many organizations,
  • 02:36 these are blended together, but for the PMP exam, it's important
  • 02:40 that you understand the distinction that is within the PMBOK Guide.
  • 02:44 First, let's talk about scope.
  • 02:46 The project scope is limited to the project goals.
  • 02:49 It's often clarified through progressive elaboration
  • 02:52 to better understand what is required.
  • 02:54 The program scope is similar to a project,
  • 02:57 just bigger because it is the scope of all the projects that make up the program.
  • 03:00 However, our portfolio scope is not based upon specific deliverable results.
  • 03:06 Rather it is organizational and strategic in nature.
  • 03:09 It is measured in terms of business impact not project deliverables.
  • 03:14 Next, we'll consider managing change.
  • 03:16 Change routinely happens with all three.
  • 03:19 The projects are expected to change and project management controls that change.
  • 03:23 Programs also change, but sometimes changes due to external effects.
  • 03:27 And sometimes it is change caused by rebalancing the resources and
  • 03:31 activities between the projects of the program.
  • 03:34 That is the focus for a program manager, coordinating the change for
  • 03:38 minimal impact.
  • 03:40 And finally, the portfolio is constantly monitoring and
  • 03:43 managing the changes in the business industry and market environments.
  • 03:48 With respect to planning, project managers will progressively elaborate their plan,
  • 03:52 starting with a high-level plan and
  • 03:53 building the details as the project unfolds.
  • 03:56 Program managers create a high-level plan to guide the detail planning for
  • 04:00 their projects.
  • 04:02 And portfolio managers don't plan projects at all, but
  • 04:05 rather manage the processes for the reviewing and approving of plans.
  • 04:11 In terms of the management of the project resources,
  • 04:14 project managers manage the project team.
  • 04:17 Program managers manage their project managers and
  • 04:20 focus on the management, and coordinator of the projects in their program
  • 04:25 to achieve maximum business impact.
  • 04:27 Portfolio managers only manage their staff.
  • 04:30 The implementation of the projects, programs,
  • 04:33 and operation activities are managed by those management teams.
  • 04:37 On to monitoring, project managers monitor the project to ensure that
  • 04:41 they deliver the product, service, or result that they're supposed to deliver.
  • 04:46 This is essentially what is happening at the program level also.
  • 04:50 It's just that the program manager can coordinate and assist between projects.
  • 04:55 The portfolio manager is looking at aggregate resource allocation,
  • 04:58 business performance, and risk with respect to the strategic objectives.
  • 05:03 In other words, the portfolio manager is monitoring business performance not
  • 05:07 project performance.
  • 05:09 And finally, let's look at how to measure success,
  • 05:11 project are easy on time, on budget, quality results, and satisfy customers.
  • 05:17 Program success includes the success of all the projects,
  • 05:21 but it also includes the business benefit from running this as a program.
  • 05:26 Remember, a program is supposed to create synergy between the projects.
  • 05:30 Portfolio success is really just business success, looking at the investments, and
  • 05:34 benefits on the overall business performance.
  • 05:39 The PMP exam will focus on projects, but there may be questions that will
  • 05:43 contrast project activity with programs and portfolio activity.

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PMI, PMP, CAPM and PMBOK are registered marks of the Project Management Institute, Inc.

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