To the layperson, the phrase “project management” can be rather broad, referring to any kind of management work—from the simplest of projects on up through the most complicated of implementations. But the reality is, there are actually “Three P’s” of project management, each of which is different than (but related to) the others: projects, programs, and portfolios.
Project, Program, and Portfolio Management
The relationship between project, program, and portfolio management can best be described like this:
- A project is a temporary endeavor undertaken by a company or organization (such as the creation of a new product, service, or result)
- A program is a group of projects that are similar or related to one another, and which are often managed and coordinated as a group instead of independently
- A portfolio is a group of different programs and/or projects within the same organization, which may be related or unrelated to one another
Put another way, projects fit within larger programs, which themselves fit within portfolios.
Though related, tasks associated with project, program, and portfolio management are by nature very different.
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What Is a “Project” in Project Management?
So, what exactly does “project” mean in the world of project management? Generally, a project is a temporary endeavor, with a finite start and end, that is focused on creating a unique product, service, or result.
Nothing in this definition describes the size or the precise content of a project—there are projects of every size imaginable in virtually every industry, and project managers supervise them regardless of these specifics.
What Does a Project Manager Do?
As project managers, the key parts of the job are to balance the scope of work—also known as “deliverables”—to meet the project objectives with the resources that are available within the schedule and allotted budget. They must do this all while working to ensure the project meets the quality guidelines required by its customers, which is not an easy task.
Learn More: What Does a Project Manager Do?
Project management is about applying the right tools, techniques, and processes, in a value-added way, to complete the project successfully. As we know, the body of project management knowledge is huge, and there are a number of skills, tools, and techniques available to support project managers in the delivery of these initiatives. What’s important is to understand the project, its goals and objectives, and what its challenges are, and to pick, choose, and use those right parts of project management accordingly.
Learn More: Building Your Project Management Career Path
What Is a “Program” in Project Management?
In some cases, it’s important that a group of projects is managed in a coordinated way to ensure that value is achieved. In project management terms, this collection of projects becomes a program. Like a project, a program is a temporary organization, so when the related projects are complete, the program is complete.
The Project Management Institute (PMI) describes program management in its PMBOK Guide as:
“The application of knowledge and skills to achieve program objectives and to obtain benefits and control not available by managing related program components individually.”
What Does a Program Manager Do?
Program management is not simply managing multiple projects—it’s a bit more strategic than that. The program manager also doesn’t micromanage those projects; he or she is helping ensure that the right work is moving between the right projects at the right points in time.
The program manager focuses, throughout the program, on the business benefits, starting very early at its inception by looking at what benefits can be realized and then making that happen.
Each project still has a project manager completing the work described above. The role of the program manager is to ensure that the benefits intended are met by validating that the correct projects are included in the program. Any project not providing value to the benefits is then realigned or removed from the program.
The program manager is responsible for overseeing the dependencies between projects and creating program-level plans to accomplish this.
For example, a master schedule is created to manage the dependencies between projects; a program risk management plan is created to manage program-level risks; and a program communication plan establishes how information will flow in the program. The program manager is then not managing the projects, but rather providing the oversight needed to ensure that the pieces of each project are completed effectively and efficiently in order to meet the needs of the other projects.
The program manager is focused on benefits realization—rather, knowing the benefits that can be accomplished from this collection of projects and focusing on achieving them. The program manager is also working to manage organizational change and ensure that the benefits are not only transitioned to operations, but that processes are in place to sustain these benefits.
Since the role of program management is to ensure that projects are aligned to the business strategy, as the strategy changes, the program manager also needs to communicate with the project teams so that they are aware of the changes and what needs to be done about them.
What Is a “Portfolio” in Project Management?
A portfolio is a collection of projects and programs that are managed as a group to achieve strategic objectives. An organization may have one portfolio, which would then consist of all projects, programs, and operational work within the company. It may also establish several portfolios for project selection and ongoing investment decisions.
According to PMI and its PMBOK Guide, a portfolio includes, “Projects, programs, other portfolios, and operations managed as a group to achieve strategic objectives.”
Organizations need to decide which projects are the right ones to focus on. Often times, they are limited by how many projects can be done based on the capacity within an organization, begging the question, “Are we doing the right projects?”
What Does a Portfolio Manager Do?
Portfolio management is the centralized management of one or more portfolios to achieve an organization’s strategic objectives.
Within organizations, the reality is often that resources are limited, whether it’s dollars, people, space, or equipment. Based on the organization’s strategy, there are several projects and programs that could be done; it just needs to be decided which are the right ones and in what order they should be completed.
It’s critical to look not only at programs and projects at the individual level, but also holistically to know how these align with the organization’s overarching goals.
At the same time, it’s important to consider a level of balance in the portfolio. The organization “needs to keep the lights on,” while also developing new opportunities. Some risk needs to be taken, but the portfolio should not be so risky that everything could be lost within a period of time.
Beyond prioritizing and selecting projects and programs, portfolio management is balancing the portfolio so that the right projects and programs are selected and implemented. Monitoring and controlling is key to the process, since portfolio composition is not a one-time decision. Evaluations should be conducted in some regular cadence. It may be decided that a project’s priority becomes lower and others move into its place. A project could be temporarily moved out of the portfolio or permanently moved out of what that portfolio entails.
This is done to ensure projects align with an organization’s strategies, goals, and objectives. It may also be the case that, as we get into performing a project or program, we find it no longer aligns, causing a reprioritization of all projects and programs in the portfolio.
Project vs. Program vs. Portfolio Managers
While the project manager is managing multiple tasks within a project, the program manager is coordinating between related projects within a program, in order to determine which projects are working towards the same or similar goals, and which may be dependent upon others. Portfolio managers, on the other hand, are managing all (or multiple) programs within an organization, ensuring that all programs are working towards fulfilling the strategic objectives of the organization.
The easiest way to explain the difference in how project, program, and portfolio managers work is: A project manager works to deliver a project efficiently and reliably. They are responsible for the day-to-day management that brings a project to fruition. Program managers are more concerned with strategic alignment: Understanding what individual project managers are doing and enabling effective communication between them in order to understand where projects are and in order to provide support where necessary. Portfolio managers, meanwhile, coordinate between various programs in order to ensure that things stay on track and that the organization is meeting its overarching strategic initiatives. They are often tasked with asking “Why?” (i.e. why is a particular project being proposed, why is certain work being done, etc.).
How Project, Program, and Portfolio Management All Work Together
To be effective, it is essential that the project managers, program managers, and portfolio managers within an organization all understand the roles that each other plays in bringing about the successful completion of a strategic goal. Without this understanding, there may be unnecessary confusion and miscommunication that can derail an initiative before it even begins.
From a high level, projects are part of programs and portfolios, and programs are part of portfolios. Each are different, but most effective when managed as one.
If you’re considering a career in project management, whether at the project, program, or portfolio level, building the skills necessary for each role is critical to your success. Earning a master’s degree in project management is one way to develop these skills, increase your earning potential, and gain a competitive advantage in the field.
Learn how a Master’s in Project Management from Northeastern can jumpstart your career today.
Editor’s note: This post was originally published in September 2017 and has since been updated for accuracy and comprehensiveness.