I often hear people talk about various projects or programs they are involved in. You hear about diverse portfolios in terms of investments and businesses. If you’re like me, everything starts to sound the same after a while. While they may seem the same, there are distinct differences and nuances that influence how they are related and how they should be approached from a strategic management perspective.
The Project Management Institute has defined the definitions of project, program, and portfolio as described below.
Project: A temporary endeavor undertaken to create a unique product, service, or result.
Program: A program is a group of related projects, subsidiary programs, and program activities that are managed in a coordinated manner to obtain benefits not available from managing them individually.
Portfolio: A portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.
Consider the fictional example below to illustrate how this could look:
The hospital is made up of several unique programs that serve to meet the overall strategic goals of the hospital. Each program will have its own projects in motion to meet the objectives of the program. For example, the sleep study lab may need to purchase new equipment to modernize the treatment options. The associated project could consist of identifying the new equipment to be purchased, managing the procurement, and equipment installation activities. Once the equipment is installed, the project is complete.
There are differences between the role of portfolio manager vs. program manager vs. project manager.
Portfolio management consists of selecting the right programs and projects needed to meet the objectives of the overall portfolio. This could include optimizing organizational costs and resources across programs and projects.
Program management involves coordinating and controlling interdependencies among the various related projects. Consider managing a hospital’s heart surgery center, which is identified as a program within the portfolio. The program manager would be monitoring both the unit remodel project and website upgrade project. These are both unique projects, that could have separate or shared resources. The completion of both projects will enhance the heart surgery center program and help the program move closer to its goals.
Project management is the work involved in completing the scope of the individual projects (unit remodel, website update, marketing campaign, etc.). Each project could potentially have a unique project team and manager. At the project level, the project manager would not necessarily be concerned with the projects in different programs, but a program or portfolio manager would.
In practice, there will be an overlap in program, project, and portfolio management. Understanding the subtle differences provide insight into how the desired skills of managers may vary between the programmatic levels. For example, a portfolio manager would need to be strategic thinking in nature whereas someone with tactical planning and execution skills may be better suited to manage at the project level.
Every organization has various projects, programs, and portfolios that occur simultaneously, making it difficult for team members to accomplish their day-to-day tasks and find success in their projects. Let netlogx help keep you organized and on track. Contact us today.