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Portfolios are often comprised of programs that are often comprised of projects; all of which either create or support operations.

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Projects, Programs, Portfolios

Portfolios are often comprised of programs that are often comprised of projects; all of which either create or support operations.

When to use

Projects are seldom done in isolation from other projects or the rest of the organization.  Understanding the relationship between the project and the programs, portfolios, and operations that it must interact with will make it easier to identify and manage risk.  At the time a project is initiated, the programs, portfolios, and operations should be identified.

Instructions

While there may be overlap, in many cases the people managing portfolios are different from the people managing operations.  And the people managing programs and projects are different from either of the other two.

Senior Management/Portfolio Management

These individuals are managing many projects, and possibly even other activities such as acquisitions or mergers, in order to implement a strategic objective.  They focus on how the projects work together to position the business for competitive advantage.  They are most involved during project selection and then monitor major project milestones in order to ensure the strategic initiatives will be achieved.  They are seldom involved in the detailed management of programs or projects.

Operations Management

These individuals are often the recipients of the program and project results.  They need to ensure that their operational requirements and constraints are accounted for in the project results.  They usually are not directly involved in the day-to-day program or project management, although they may provide a resource for the Core Team.  These people are often conducting technical reviews during the project to ensure that the project results are working correctly.  They are often the stakeholders who will determine when the project is finished.

Program and Project Management

Program and project management are responsible for the planning and execution of the project.  For all intents and purposes, programs are just mega-projects.  Program managers rely on the project managers to manage the project activity and the program managers focus on the integration and overlap between projects.  However, both will use similar project management tools and both will work through their Core Team.  They take the strategic imperative from portfolio management and create a solution that is acceptable to operations management.

Definitions

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

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

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

 

These definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Fifth Edition, Project Management Institute, Inc., 2013.

 

Hints & tips

  • The boundary between projects and programs is a blurry one.  Don’t become overly focused on which category your project is in. It comes down to complexity and how that will be managed.
  • Projects support operations by providing new capabilities for them.  Projects should always have the operational end-user in mind.
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  • 00:03 Hi, I'm Ray Sheen.
  • 00:05 Let's talk next about projects, programs, portfolios, and operations,
  • 00:10 both the differences between them and how they're related.
  • 00:14 First I need to define what I mean by projects, programs, and portfolios.
  • 00:19 They're linked, but they are definitely different.
  • 00:22 According to the Project Management Body of Knowledge, the PMBOK Guide,
  • 00:26 a project is a temporary endeavor undertaken to create a unique product,
  • 00:30 service, or results.
  • 00:31 That is a widely accepted definition, and you can find it repeated many places.
  • 00:36 According to the PMBOK Guide, a program is related projects, subsidiary programs,
  • 00:41 and project activities that are managed in a coordinated manner to
  • 00:46 obtain benefits not available for managing them individually.
  • 00:50 And according to the PMBOK Guide a portfolio is projects, programs subsidiary
  • 00:55 portfolios, and operations managed in a group to achieve strategic objectives.
  • 01:00 Let's take a look at the differences between each of these.
  • 01:03 First, let's start with projects.
  • 01:05 Remember a project is a temporary endeavor undertaken to create an unique product or
  • 01:10 service.
  • 01:10 That means a project is focused on the deliverables.
  • 01:13 Get the deliverables completed within a specific time to a specific standard and
  • 01:17 within a specific resource budget.
  • 01:19 The key principle is to get the deliverables done.
  • 01:22 Now recall a program is a group of related projects, subsidiary programs, and
  • 01:27 project activities managed in a coordinated way to obtain benefits
  • 01:31 not available for managing them individually.
  • 01:34 So, we are talking about a collection, usually just a collection of projects.
  • 01:39 And they are managed in a coordinated manner.
  • 01:42 That allows the program manager to take advantages or synergies and
  • 01:46 benefits between the projects.
  • 01:48 Often, there are shared resources used across projects that have already
  • 01:52 developed specialized skills and knowledge.
  • 01:54 In addition,
  • 01:55 some projects can be accelerated by riding on the coattails of other projects,
  • 01:59 reusing their deliverables, or facilities, and equipment.
  • 02:02 Coordination is the key principle with programs and now for portfolios.
  • 02:09 Remember a portfolio is projects, programs, subsidiary portfolios, and
  • 02:13 operations managed as a group to achieve strategic objectives.
  • 02:17 The first principle to understand is that although these are group,
  • 02:21 they are a collection of projects and programs,
  • 02:24 each is unique with their own project leader, and own project team.
  • 02:28 They're managed together to achieve a strategy.
  • 02:31 That's the key to remember about a portfolio, it's a strategic focus.
  • 02:35 So, trade offs are sometimes made within the portfolio.
  • 02:37 For instance, a portfolio may have two investigative projects underway to
  • 02:42 determine the best path to achieve a strategy.
  • 02:45 At some point, the portfolio will decide which of those two approaches is best,
  • 02:49 canceling one and focusing on the other.
  • 02:52 So, what about operations?
  • 02:54 How do they interact with projects, programs, and portfolios?
  • 02:57 Operational departments that a business or
  • 03:00 organization operating a fundamentally different manner from projects with
  • 03:04 respect at least to one very important condition.
  • 03:07 Operations are continuous, once they get started, they keep going again and again.
  • 03:13 They're continually making the product, continually answering the phone calls,
  • 03:17 continually running through the normal daily processes.
  • 03:20 This contrasts with projects, which start and stop.
  • 03:23 They are a temporary endeavor, when the project is done, it's done.
  • 03:28 Projects end, operations do not.
  • 03:30 They continue as long as the organization is in business.
  • 03:34 Although projects and operations are different,
  • 03:36 there are some definite linkages between them.
  • 03:39 If we think back to why we do the projects, it's often to create, upgrade,
  • 03:44 or improve the existing operations.
  • 03:46 Operations come into existence through projects,
  • 03:50 the project ends and the operational processes begin.
  • 03:54 Projects often use operational resources to accomplish part of their project
  • 03:59 activities.
  • 04:00 Operational resources to the pilot run or the beta testing.
  • 04:03 We have operational resources to do project reviews and audits.
  • 04:07 And often, we will have an operational representative on the project core team.
  • 04:12 Finally, the operational managers are often the stakeholders of projects and
  • 04:17 programs.
  • 04:17 Since the projects and the programs will be improving or
  • 04:21 modifying their operations.
  • 04:23 They're involved in the oversight review and
  • 04:25 the stakeholder management of the projects and programs.
  • 04:28 Projects, programs, and portfolios are linked together and
  • 04:33 are often managed in a coordinated manner.
  • 04:35 There is a hierarchy that links them, and
  • 04:38 together they create an improve business operations.

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