Management Skills:
Exceptional Project Management - Projects, Programs and Portfolios
Recently I have been asked to explain the differences between a project, program and portfolio and how best to manage each.
Essentially, a project is a set of activities with a start and end that produce a unique output. Each project will involve initiating (starting), some work being undertaken and then closing (ending). Hopefully it will include some planning (of the work to be done), execution (doing the actual work) and some monitoring of progress to enable control of the activities.
A program is a group of closely related projects. The idea behind programs is that it may be more effective to manage related projects in a coordinated way. In practice this means that if two or more projects are involved in creating dependent parts of a product or service then they will probably benefit from some additional focus on the interdependencies between the projects.
Another way to think about this is that a program is a large project, creating a single outcome, which has been split into multiple smaller projects to make it more manageable.
A portfolio is a collection of projects that share common resources (such as staff or funding) but which may be otherwise quite independent. Portfolio management focuses on prioritization of work to use resources effectively and meet strategic business goals.
There may be a single portfolio, which is used to manage all of the organizations projects, or multiple portfolios focused on different strategic outcomes or covering different pools of resources ( for example different business units may have separate portfolios).
So a project is a way of managing work, a program is a collection of related projects and a portfolio is a collection of projects and programs which share common resources and support achieving business objectives.
Management of programs is similar to management of projects, in fact as a project becomes larger it begins to look more like a group of smaller projects. The role of a senior project manager transforms into that of project director and then into program manager.
In comparison, the management of a portfolio is very different. Portfolio management is mostly about prioritizing the use of scarce resources and deciding what gets done, when. Thus, portfolio management focuses on understanding the strategic needs of the business and determining where money and effort should be invested to maximize the benefits. Portfolio management also includes monitoring and reporting on the overall value being created by these projects to enable senior management to make more effective investment decisions.
Christopher Young:
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Subject:
Management Skills
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