Portfolio & Program Managements
A portfolio is a collection of projects and programs that are managed as a group to achieve strategic objectives. An organization may have one portfolio, which would then consist of all projects, programs, and operational work within the company.
Program and Portfolio Management as a Subset of Corporate Governance
Program and portfolio management are structures for grouping projects in organizations. As such, they are part of an organization’s overall governance structure. Being solely related to project activities, program and portfolio management is a subset of corporate governance known as the governance of project management. According to the Association for Project Management (2004), the main components of this governance structure for project management are (1) portfolio direction effectiveness and efficiency, (2) project sponsorship effectiveness and efficiency, (3) project management effectiveness and efficiency, and (4) disclosure and reporting.
Program and portfolio management address the question of governance from two parallel perspectives. The first perspective takes into account the interconnectedness of the various project objectives in order to maximize accomplishments of combined project outcomes. This has led to the development of programs, which the Project Management Institute defined as a group of related projects, managed in a coordinated way to obtain benefits and control not available from managing them individually (Project Management Institute [PMI], 2004, p. 368).
What is the difference between portfolio and program management?
Portfolio management has bigger scope and objective than program management.
Difference between Program Management
and Portfolio Management
What are Projects, Programmes and Portfolios?
- A project is a unique, temporary effort with a defined beginning and end that aims to deliver a new product or service – for example, a large event that aims to launch a new product on the market.
- A programme is a singled coordinated effort with multiple independent projects that are related to one another – for example, a range of projects that each focus on a particular area, e.g. the development, GTM, marketing and launch of a new product.
- A portfolio is the prioritised set of all projects and programmes in the organisation which may or may not be related – for example, a company itself will be the largest portfolio but each division would be its own portfolio, e.g. the marketing software, the sales software and the services software.
Portfolio Management Involves Two Main Groups of Processes
- Component Identification: “Is it a genuine component?”
- Characterization: “Where does it fit?”
- Evaluation: “What’s it worth?”
- Selection: “Could it be worthwhile?”
- Prioritization: “How do the selected components compare?”
- Portfolio Balancing: “What’s the best profile as a subset of selected components?”
- Authorization: “Let’s do it!”
Portfolio Risk Management
At the very least, this should address the fact that risk in portfolios occurs at two levels: the component level and the portfolio (aggregate) level.
- Component-level risk should be considered as a component criterion to be included in the Evaluation, taken into account for Prioritization and Portfolio Balancing and then managed at component level.
- Portfolio-level risks are any uncertain events or conditions that could affect the goals or constraints that govern the portfolio such as Strategic Objectives and Governance. They should be identified, addressed, etc. during the Portfolio Planning phase (currently missing!), monitored and controlled at regular portfolio status reviews and reassessed in the “status assessment” process.
Program Management Life Cycle Phases
Pre-program set-up: Identification and commitment of key resources needed for planning, developing the business case, the program charter, and a plan for the Program Set-Up phase. The business case should include a clear statement of the following program considerations:
- Mission – why the program is important and what it needs to achieve
- Vision – what the end state will look like, how it will benefit the organization
- Values – how the program will evaluate necessary trade-offs and balance the decisions to be made
The purpose of the program set up phase is to continue to develop the foundation for the program by building a detailed “roadmap” that provides direction on how the program will be structured and defines its key deliverables.
A program roadmap (sometimes called blueprint or program architecture) is a hierarchical description of the program scope, broken down into program components and delivered in one or more stages (or “release cycles”, “packets”, “tranches”, etc.).
This phase competes with the approval of a mandate to execute the program as outlined in the roadmap.
How it Works
Enterprise project management focuses on the organization, prioritizing and highlighting its business goals and managing and grouping projects to ensure they meet those broader company objectives. The end objective is not necessarily a completed project but a project that effectively provides value to the organization.
Large enterprise organizations typically run multiple complex projects simultaneously. Although these projects do not necessarily seem connected, they all impact the same enterprise organization. Enterprise project management (EPM) refers to the practice of managing projects on a companywide scale. It generally involves implementing strategies and processes to streamline and improve the effectiveness of project management on a large scale.
Traditional project management practices focus on seeing one specific project through with a defined, measurable objective.
Enterprise project management focuses on the organization, prioritizing and highlighting its business goals and managing and grouping projects to ensure they meet those broader company objectives.
The end objective is not necessarily a completed project but a project that effectively provides value to the organization.