Program Management
Key differences between Project, Program and Portfolio Management
To understand the fundamental difference between Project, Program and Portfolio Management, let's dive into what the words 'Project', 'Program' and 'Portfolio' actually stand for. These are very similar sounding functions but very different in nature.
Projects according to the Project Management Institute (PMI) are the temporary endeavors undertaken to create a unique product, service or outcome. Projects are generally bound by cost, resources, scope and time constraints with a clearly defined end-date.
Programs on the other hand are the collection of interconnected/related projects, or subsidiary programs working towards a bigger long-term business objective focusing on achieving strategic benefits and organizational growth, which would not have been possible if managed separately.
While Portfolios refer to the group of related or unrelated projects, programs, subsidiary portfolios and operational work managed as a group to achieve strategic objectives.
Now that we have a clear understanding of the three terms — Project, Program and Portfolio — let's look at the differences in their management and application.
Project Management
According to PMI, this is the application of knowledge, skills, tools and techniques to meet the project requirements within defined constraints of time, cost and scope. The overall project management falls into these five categories:
- Project Initiation
- Project Planning
- Project Execution
- Project Monitoring and Controlling
- Closing
Program Management
According to PMI, this is the application of knowledge, skills, and principles to obtain benefits and control not available by managing the projects or subsidiary programs individually. It focuses on the coordinated and effective delivery of benefits derived from the pursuit of a group of projects and other programs whose outcomes are related.
Portfolio Management
According to PMI, this is the centralized management of one or more related or unrelated portfolios, programs and projects. Portfolio Management focuses on the establishment and use of good practices when choosing programs or projects to sponsor, prioritizing their goals and work associated, and ensuring that they are sufficiently resourced.
- Portfolio Managers ensure that programs and projects are selected, prioritized, and staffed according to the organization's strategic plan.
- Program Managers focus on delivering organizational benefits through coordinated management of projects and subsidiary programs.
- Project Managers focus on delivering specific outcomes from their individual projects required by an organization.
Benefits of Program Management
- Better management and coordination of the interconnected projects and tasks
- Proper resource utilization
- Resolve interdependent resource constraints
- Improved overall organization performance and benefits realization
Benefits of Portfolio Management
- Best utilization and allocation of resources among the projects or programs
- Continuous support to programs and projects
- Less conflicts and improved communication and coordination among programs and projects
Source: Project Management Institute (PMI)