What is Program Management and Project Portfolio Management?
The lecture gives you an understanding of various concepts in project management, including What is Program Management?, and What is Project Portfolio Management? Here is a short definition. In Program Management, groups of related projects are managed using the same techniques in a coordinated fashion. Project Portfolio Management is a collection of programs and projects that support a specific business goal or objective.
What is Program Management?
Let us first understand, What is Program Management? Programs are groups of related projects that are managed using the same techniques in a coordinated fashion. When projects are managed collectively as programs, it’s possible to capitalize on benefits that wouldn’t be achievable if the projects were managed separately. As you can imagine, it is often more economical to group projects together to help streamline management, staffing, purchasing, and other work.
The topic What is Program Management may further be elaborated with the following example. building a new shopping mall is a program. Many sub-projects exist underneath this program management, such as excavation, construction, interior design, store placement, marketing, facilities management, and so on. Each of the sub-projects is really a project unto itself. Each sub-project has its own project manager, who reports to a project manager with responsibility over several of the areas, who in turn reports to the head project manager who is responsible for the entire program. All the projects are related and are managed together so that collective benefits are realized and controls are implemented and managed in a coordinated fashion.
The following are some examples of programs, which help you understand What is Program Management?
- A construction firm has programs for building single-family homes, apartment buildings, and office buildings, as show in figure. Each home, apartment building, and office building is a separate project for a specific sponsor, but each type of building is part of a program. There would be several benefits to managing these projects under one program. For example, for the single family homes, the program manager could try to get planning approvals for all the homes at once, advertise them together, and purchase common materials in bulk to earn discounts
- A clothing firm has a program to analyze customer-buying patterns. Projects under this program might include one to send out and analyze electronic surveys, one to conduct several focus groups in different geographic locations with different types of buyers, and a project to develop an information system to help collect and analyze current customers’ buying patterns
- A government agency has a program for children’s services, which includes a project to provide pre-natal care for expectant mothers, a project to immunize newborns and young children, and a project for developmental testing for preschool children, to name a few
Roles of a Program Manager:
A program manager provides leadership and direction for the project managers heading the projects within the program. Program managers also coordinate the efforts of project teams, functional groups, suppliers, and operations staff supporting the projects to ensure that project products and processes are implemented to maximize benefits. Program managers are responsible for more than the delivery of project results; they are change agents responsible for the success of products and processes produced by those projects.
Program managers often have review meetings with all their project managers to share important information and coordinate important aspects of each project. Many program managers worked as project managers earlier in their careers, and they enjoy sharing their wisdom and expertise with their project managers. Effective program managers recognize that managing a program is much more complex than managing a single project. They recognize that technical and project management skills are not enough. In addition to skills required for project managers, program managers must also possess strong business knowledge, leadership capability, and communication skills.
What is Project Portfolio Management?
After understanding What is Program Management?, let us elaborate What is roject Portfolio Management? Project Portfolios are collections of programs and projects that support a specific business goal or objective. Let’s say our company is in the construction business. Our organization has several business units: retail, single-family residential and multifamily residential. Collectively, the projects within all of these business units make up the portfolio. The program we talked about in the preceding section (the collection of projects associated with building the new shopping mall) is a program within our portfolio. Other programs and projects could be within this portfolio as well. Programs and projects within a project portfolio are not necessarily related to one another in a direct way. However, the overall objective of any program or project in this portfolio is to meet the strategic objectives of the portfolio, which in turn should meet the objectives of the department and ultimately the business unit or corporation.
Pacific Edge Software’s product manager, Eric Burke, defines project portfolio management as:
“The continuous process of selecting and managing the optimum set of project initiatives that deliver maximum business value.”
Manager responsible for Project Portfolio Management need to understand how projects fit into the bigger picture of the organization, especially in terms of corporate strategy, finances, and business risks. They create portfolios based on meeting specific organizational goals, such as maximizing the value of the portfolio or making effective use of limited resources. Portfolio manager’s help their organizations make wise investment decisions by helping to select and analyze projects from a strategic perspective. Portfolio managers may or may not have previous experience as project or program managers. It is most important that they have strong financial and analytical skills and understand how projects and programs can contribute to meeting strategic goals.
The main distinction between project or program management and project portfolio management is a focus on meeting tactical versus strategic goals. Tactical goals are generally more specific and short-term than strategic goals, which emphasize long-term goals for an organization. Individual projects and programs often address tactical goals, whereas portfolio management addresses strategic goals.
Roles of a Project Portfolio Manager
Project and program management address questions like:
- Are we carrying out projects well?
- Are projects on time and budget?
- Do project stakeholders know what they should be doing?
Project portfolio management addresses questions like:
- Are we working on the right projects?
- Are we investing in the right areas?
- Do we have the right resources to be competitive?
There can be portfolios for all types of projects. For example:
- In a construction firm, strategic goals might include increasing profit margins on large projects, decreasing costs on supplies, and improving skill levels of key workers. Projects could be grouped into these three categories for portfolio management purposes
- In a clothing firm, strategic goals might include improving the effectiveness of IT, introducing new clothing lines, reducing inventory costs, and increasing customer satisfaction. These might be the main categories for their portfolio of projects. This concept can easily be understood if we have a clear understanding of What is Program Management?
- A government agency for children’s services could group projects into a portfolio based on key strategies such as improving health, providing education, and so on to help make decisions on the best way to use available funds and resources.
In this lecture, you had an understanding of What is Program Management? and What is Project Portfolio Management?. This lecture is a part of diploma project management and online project management degree programs, which are renowned qualifications offered by project management institute uk.
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