Q 445. The terms Project Management, Program Management and Portfolio Management are often confusing and are used interchangeably. Elaborate the differences between these 3 with a suitable example. (Best example clearly explaining the differences will be selected as the winner)

 

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Project management is a temporary effort focusing to create a unique service, product or a result with a defined start and end date. This focuses on following the principles and procedure for managing project from its beginning through its expected outcome.
Program management focuses on managing a collection of projects with an aim to accomplish same or similar objectives of an organizations. They could be a combination of related or interdependent projects identified to achieve a common strategic goal.
Portfolio management focuses to bridge the gap between the strategy and implementation. The main objective is to manage and balance the implementation of changes with potential ROI. This demands to predict outcomes and identify projects that offers the best results. 

Project is an activity with purpose or end results achieved in definite period with start and end time with budgeted resources (money, manpower, material). Example of projects are :

• Enhancement of capacity of a product
• Setting up in-house power generation plant
• Development of new product from Lab to kilo scale

All these projects – will have definite start time, end time, resources, and ultimately clear objective.

Managing such project with tools like CPM, PERT , Gantt charts, schedules  etc is Project Management. Therefore, managing each individual project is Project Management. Project Manager is normally appointed to oversee and achieve deliverable of project including MIS/ review internally along with stakeholders / decision makers.

If there are  

a)       multiple product enhancement projects at different place / geographies with same or different start time, end time, resources – men/material/money involved.

b)      Combination above projects

Managing them requires program management on top of individual project management. Program manager roles requires managing such program management by holistic and taking over-arching control, guiding, and helping in achievement of individual projects with:

• Setting up review and governance process
• Focusing on key deliverable of multiple projects
• Resource requirement, mobilization sometimes inter-movement, prioritization / reprioritization / de-prioritization
• Timely highlighting where help required, management support required

 

Portfolio management is – combination of many program / project management, however with following unique features as example.

A Research & Development division of a pharmaceutical company will have Portfolio Management / Managers

a)       To drive Oncology therapeutic category programs/ projects

b)      To drive enzymatic chemistry products – development program/ projects

c)       To drive peptides as separate portfolio of products

 

Note : Portfolio management like Mutual fund – Large cap Equity portfolio,  Debt portfolio, Sectorial ( bank , pharma etc) portfolio management terms are widely used in stock / mutual fund asset management . However for better explanation and drawing key differences between Project, Program, Portfolio – industry example taken.

Simply put a number of related projects managed together form a program and a number of unrelated projects/programs managed together form a portfolio.

Project Management

A Project is a temporary endeavor that has a start date/time and finish date/time and consumes resources. It is broken down into various tasks. Hence, we can say that a project has a charter, the deliverables, timeframe, budget, commitment of resources right at the beginning of the Project.

Program Management

A program is generally a long-term endeavor that consists of a number of concurrently executed projects. Hence, we can say that a program will align with the organizational strategic goals. The benefits of a program are ongoing and hence it does not have a specific timeframe. It moves from one level of improvement to the next level. The budget for a program is generally earmarked in the annual budget of the organization. Programs are managed at the higher levels of management. A program would accomplish multiple organizational goals, have multiple small deliverables over time, have mid-course corrections, change in plans, have ambiguity in the output, and will be ongoing.
Program management helps the organization select projects based on its long-term strategic goals by constantly addressing the business risk. It helps maintain constant communication with all stakeholders thereby ensuring that the entire organization and its stakeholders are on the same page. By looking at the bigger picture, program management helps to effectively prioritize resources. Overall, it encourages an environment of continuous improvement towards a common strategic goal in the organization.

Portfolio Management
To begin with, a Portfolio has a bigger scope and objectives than program or project management. It deals with macro-management of the organization as against micromanagement in a Project. PMI defines portfolio management as it “ensures that an organization can leverage its project selection and execution success. It refers to the centralized management of one or more project portfolios to achieve strategic objectives.” This centralized management helps the organization achieve its overall long-term strategical objectives by setting project priorities based on the overall business objectives to make sure that the benefits to the business are optimized. It may however be noted that portfolio management does not oversee each individual project or program. PMI Study Circle defines a portfolio as a group of unrelated or related programs/projects. Hence it can consist of multiple programs or projects. As against project management, which consists of similar projects, a portfolio generally consists of dissimilar programs/projects. The KRA for a portfolio is the combined performance of its components which could be projects/programs.
Portfolio Management supports the programs and projects through the optimum allocation and utilization of resources based on the organization’s long-term strategic goals. It results in better economies of scale and fewer risks. It ensures constant communication and better coordination among the stakeholders of the programs and projects leading to lesser conflicts and greater overall success of the programs and projects.

Example
Portfolio. The goal of a political party is to come to/remain in power. In order to come to/remain in power, the party has determined that it needs to focus on primary education, health care and women empowerment. These three focus areas would form the portfolio of the political party.

Program – Primary Education. In the area of primary education, the party may decide on a program to reduce illiteracy in the country. It could break down this program into various projects such as building new schools, increasing the infrastructure in existing schools, training, and induction of new teachers.

Program Health Care. In the area of health care, the party may decide on a program to increase the outreach of health care at the village level. It could break down this program into various projects such as building new hospitals/clinics, increasing the infrastructure in existing hospitals/clinics, training, and induction of new doctors and nurses.

Program Women Empowerment. In the area of women empowerment care, the party may decide on a program to increase the percentage of women in the workforce. It could break down this program into various projects such as encouraging parents to educate daughters, encouraging parents to get daughters married after completing their education, creating a women friendly work environment.

References

https://www.clearpointstrategy.com/difference-between-program-and-project-management/

https://www.pmi.org/learning/featured-topics/portfolio

https://pmstudycircle.com/project-management-vs-program-management-vs-portfolio-management/#:~:text=%20Program%20management%20manages%20similar%20projects%20while%20portfolio,changes%20with%20the%20strategic%20objectives%20of%20the%20organization.

Project is a temporary endeavor to deliver a specific goal in the form of a product or service or a result.

·         Has a start and end date.

·         A project requires planning and has several steps to be followed before the outcome

·         Requires specific, dedicated resources to meet the requirement of various areas

·         There should be a primary customer or sponsor.

·         A project can be uncertain, it has risks associated like delays or budget which impact the project outcome

So, project management would primarily involve the following deliverables:

·         Project goals

·         Resource requirements and scheduling

·         Task scheduling

·         Cost management

·         Project communication plan

·         Stakeholder management

 

Program:

·         A program is a group of projects that are similar or related to one another, they need not be related

Program management would primarily involve the following deliverables:

·         Allocation and prioritization of budgets

·         Define the overall roadmap

·         Resource availability

·         Managing progress and dependencies for various projects

·         Achieving overall program level goals

 

Portfolio:

·         Are ongoing initiative that span across years of existence and are strategic in nature to achieve the overall organization goals

Portfolio management would primarily involve the following deliverables:

·         Align with business objectives

·         Define strategy and goals for the programs

·         Communicate organizational goals and objectives to drive programs and projects

·         Derive the benefits from projects and programs

These are the 3Ps of project management in Organization’s project management for an Interior Design and Architect Solution organization:

 

Project Management
The word ‘project’ in itself indicates that project management involves completion/ delivery of specific project. Project management involves the planning, coordination and oversight of a specific outcome/ output led project, from beginning to end. Project management comprises 5 stages from Initiation to Completion (ref figure 1), which include defining the project charter, budget, timelines and objectives of the project

 

Responsibilities of a project manager typically include the following:

·        Project scoping, scheduling and approvals

·        Resource & Budget management

·        Contingency management

·        Status reporting to stakeholders
 

Projects are time-bound (generally short-term), and come with capital, time and/ or resource constraints, owing to which project management requires stronger tactical expertise, as it largely focuses on the operational and/ or executional aspects of the project such as delegating tasks, regular monitoring of the project progress to ensure meeting scheduled timelines, identifying and dealing with execution constraints and challenges while staying within budget.

An example of project management would include development of a software that meets the pre-defined requirement, or construction of a residential apartment project within a specified budget and timeline.

Program Management

A program is a group of related projects managed in co-ordination together to obtain benefits, that may either not be available otherwise from individual projects and/or the collection of these projects together outweighs managing projects individually. In other words, a program is a large project, one that is made up several smaller inter-dependent projects bundled together in a single program.

Program managers are strategic thinkers, who lead the end-to-end responsibility of the cross-functional program, from strategy to delivery of the set of desired outcomes on an on-going and evolving basis. Further, the objective of a program management office is focused on delivering for the company’s overarching goal and delivering higher stakeholder value.

The program manager also has responsibility for:

·        Prioritizing and budgeting initiatives

·        Defining a cross-organizational roadmap

·        Ensuring resources capacity and availability

·        Managing interdependencies between projects

·        Ensuring program-level goals are achieved

An example of program management would include a program comprising individual projects for development and testing of a software, launching it in market, building customer support infrastructure. Further, monitoring and reporting the performance of this software product on a continuous basis, throughout the various stages of the product lifecycle.

PORTFOLIO MANAGEMENT:

Portfolio management comprises the selection, prioritisation and control of an organisation's programs, in alignment with the organisation’s overall mission. The purpose of the portfolio management is to prioritise initiatives that propel the trajectory of the organisation towards its goals. Most often than not, portfolio management encompasses management of investments for optimising overall business returns and value. A portfolio manager is hence essentially responsible for prioritising investment decisions into various investments (viz. programs and projects), followed by executing investments on behalf of the organisation.

An example of portfolio management would include investments into programs for various software products under the investments of the organisation.

 

BROADLY, the difference may be summed up in the following table.

 

All the answers beautifully explain the difference between the three terms. Johanan's answer has been selected as the best answer for the example to support the explanation.