1.5 Portfolios, Programs, and Projects
Now that we understand what a project is, let us put projects into perspective with portfolios and programs. In section 1.1, we learned that some projects are part of a larger initiative or program. In this section, we will extend that understanding further and introduce portfolios as another organizational level to manage programs and projects.
To understand the concept of portfolios, programs, and projects, think about a well-known automobile manufacturer with a line of pickup trucks—the P150, P250 and P350. For each of these pickup trucks, there are product development teams led by separate program managers. Reporting to each program manager are several project managers who manage the development of the various parts of the complete truck. The program manager reports to the portfolio manager, who is responsible for the entire line of pickups. In addition to the current line of pickup trucks, there is also a research and development (R&D) department that is working on a concept for future trucks. This scenario is represented by Figure 1.10.
As indicated above, portfolio management ensures that the right projects are done and project management ensures that the projects are done right; success requires a balance of both.
For a comparative overview to better understand the responsibilities of portfolios, programs, and projects, see Table 1.2, adapted from the PMBOK Guide.1
| Portfolios | Programs | Projects | |
|---|---|---|---|
| Scope | Business scope that changes with strategic goals of the organization. | Large scope that provides more significant benefits. | Defined objectives. Scope is progressively elaborated throughout PLC. |
| Change | Continually monitor changes in the broad environment. | PMs expect change from both inside and outside the program; be prepared to manage it. | Expect change and implement processes to control and manage change. |
| Planning | Create and maintain necessary processes and communication relative to the aggregate portfolio. | Develop the overall program plan and create high-level plans to assist in detailed component-level planning. | Progressively elaborate high-level information into detailed plans throughout the project life cycle. |
| Management | Manage or coordinate portfolio management staff. | Manage the program staff and the project managers; provide vision and overall leadership. | Manage the project team to meet the project objectives. |
| Success | Measured in terms of aggregate performances of portfolio components. | Measured by the degree to which the program fulfills the needs and benefits for which it was undertaken. | Measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction. |
| Monitoring | Portfolio managers monitor aggregate performance and value indicators. | Monitor the progress of program components to ensure that all of the goals, schedules, budget, and benefits of the program will be met. | Monitor and control the production of products, services, or results that the project was undertaken to produce. |