There is more than a possibility that you use terms like program management and project portfolio management in your daily language. Both of these words are common everyday words and have simple meanings. However, in case of organizational management, a majority of people are unaware when to use such terms. These words hold different meanings for different companies. Even within a company, different stakeholders use these terms differently. It is apparent that confusion abounds when it comes to finding out the meaning of these terms.
Project and program
A project is a temporary endeavor done to create a unique service, result or product. Project portfolio management includes a lot of activities, including the balance of project constraints. Such constraints include, among other things, scope, resources, time, risk, cost, and quality.
A program can be described as a cluster of related program activities, projects, and subprograms. These are managed in a coordinated manner so that benefits can be obtained. Such benefits cannot be obtained at an individual level. Projects included with a program share goals. Thanks to shared program goals, they become related among themselves. In case all projects within a program do not become successful, the program’s final goal is either partially met or not met at all.
Each project within a program generates a unique product, result or a service. The outcome of a particular project could be utilized by other projects within the same program. All these outcomes make a collective contribution towards a shared program goal.
Program management
Program management involves the coordination among constituent projects. This will extract maximum benefits which may not be available if they get managed individually. The practice of program management may involve the completion of some work which can be outside the scope of the individual projects. Do note that related projects could be dissimilar as well. The similarity is derived from deploying similar or same technology with the use of shared resources and working for the same client, among other things. In case the projects get to be similar but totally unrelated, then they can be managed as a component of a portfolio.
Portfolio
A portfolio can be described as a collection of operational work and project programs. All programs and projects found within a portfolio may not be always related between them. Portfolio constituents are needed to fulfill an organization’s strategic business objectives. The list of strategic business objectives includes building a reputation, branding, and profit maximization. It also includes resource use optimization and reduction of overall expenses. The portfolios are aligned to the industrial and business domain of any organization.
There could be a number of reasons as to why program management and project portfolio management are frequently lumped together. This is as both are more similar than differing from each other. Managers, within the program or project portfolio, make a number of goal-oriented decisions which are consistent with the expected strategic outcome. They are subjected to strict managerial control. Governance process of both project portfolio management and program management are similar. To give an example, both are known for its roll-up reporting of individual components with the aim of decision making, monitoring, and control.
