Understanding the Difference Between Project, Programme, & Portfolio Management

Introduction

Today, busy organisations are constantly trying to implement change to stay ahead of competition. As complexity increases, change management can become a slow and tricky process, often involving tens or even hundreds of individual projects being executed in close environments and with constricted resources.

Because of this challenge the practice of ordering these projects under collections of programs and portfolios has grown in popularity as a way to improve growth, resource allocation, and impact; but how should this be applied to you and your organisation’s change management systems? This article aims to help answer this question by identifying the key difference between projects, programs, and portfolios.

What are they?

Projects are the coordination of a temporary goal within an organisation to achieve an outcome. The activity can aim to generate a wide range of outcomes:

·         Create an original, component or enhancement of a product

·         Provide a service or the capability to perform a service

·         Produce information or knowledge in the form of research

The purpose of the project may be independent of all other running or completed projects, but it can also be part of larger goals within an organisation contributing its outcome alongside other projects towards a more complex goal.

Programs are a collection of projects that are grouped together on the basis of one unifying strategic goal for the purpose of achieving greater change and impact. This is achieved by acting as a communicator between projects to analyse the most effective uses of available resources and potential cross-impact of projects within the program.

By grouping projects based on their shared purpose the program can generate outcomes not accessible by managing projects individually. The program also helps the organisation to collaborate the results with business-as-usual operations.

Portfolios are the highest level of strategic oversight in change management. They are predominantly about choosing the right projects for the organisation’s needs. They will also ensure that resource demand for projects can be aligned with resource availability before projects are initialised. A portfolio should be orientated around achieving a set of strategic business transformation goals for the organisations; this includes the business-as-usual operations in conjunction with all projects under the portfolio.

What are the key differences?

This difference between these three management systems is best understood as pyramid (add link to the infographic here) – projects making the base, coordinated into programs which are overseen by a portfolio(s) which then contribute to an organisations strategic goals. Despite the focus on different levels of change management it is important to remember that all of this is for the purpose of achieving long term strategic goals such as competitiveness, growth or sustainability.

The reason for implementing multiple levels of management (and the biggest difference between managing styles) is to enable each level to focus on different objectives, ultimately contributing to the overall strategic goals.

Portfolio Managers: “Doing the right thing”

Despite sounding vague this management level objective arguably delivers the most value to an organisation in the long run. By creating a formal approach to the orchestration, prioritisation, and resource allocation of projects within the organisation a project portfolio manager (PPM) can more easily analyse the potential value from programs and their respective projects.

The PPM is less concerned about whether or not projects are going well or creating interdependencies and more that all available resources are being utilised in a way that best promotes the overall strategic goals of the company alongside business-as-usual activities.

Program Managers: “Realise the benefits”

The Program Management Office’s goal is to coordinate projects that either have a shared goal or an interdependency. Unlike a project manager, program managers should not focus on day-to-day challenges faced by projects but instead on project performance and how that performance is affecting the broader goals of the organisation.

In general, the focus should be coordinating initialised projects and communicating between them to manage interdependencies, shared resources and cumulative products (i.e. the completion of one project outcome is needed in the development of another)

Project Managers: “Doing things right”

This means the project manager is not focused on the strategic impact of their work but purely on value delivered/created within the scope of the project. By narrowing responsibilities, the project manager can focus on working efficiently, keeping costs as low as reasonably possible and keeping output at the highest quality level without dealing with conflict between the needs of other projects.

Conclusion

As it has been mentioned, creating change in busy organisations is increasingly difficult. As your organisation grows, so will the number of moving parts and interested parties trying to exert influence and achieve their professional goals. By developing a change management system to incorporate the three central levels discussed in this article you can:

·         Increase output from individual projects

·         Create long term growth with clear vision

·         Prevent bureaucratic gridlock causing stagnation

Staying competitive is difficult enough sustaining your business-as-usual activities without being impeded by additional challenges of creating effective change and innovation within your organisation. By understanding how not just projects, but also how portfolios and programs work will enable your business to optimise your resources into leading the industry instead of trying to keep up.If you are looking to improve your organisation’s project management or change management structures, talk to our team at www.i2a.co.uk/contact for advice and support.