The world of project management is notorious for its confusingly similar terms. Three terms commonly lumped together are project, program, and portfolio with many people using them interchangeably. Although they are related to one another, these are three very different concepts with their own definitions and goals.
In this blog, we will examine the characteristics of each, establish how they differ from one another and discuss how they are all managed. In addition, we will compare top Project Portfolio Management (PPM) software tools that help teams with complex projects.
What is a Project?
The Association for Project Management (APM) defines a project as “a unique, transient endeavour, undertaken to achieve planned objectives, which could be defined in terms of outputs, outcomes or benefits”. In layman’s terms, a project focuses on creating a set of deliverables or results within a finite amount of time to a specified standard.
Projects can be different depending on the industry, but they all have some common features. This applies whether the project is building a highway or a wind turbine offshore.
- Clearly defined project goals
- Scope of work
- Schedule
- Specific resources allocated to complete the work
- Budget
- Success Criteria
What is a Program?
The Project Management Institute (PMI) outlines a program as “a group of related projects managed in a coordinated manner to obtain benefits not available from managing them individually”. Each of the projects within a program may be run by completely different departments and managers, however all their outcomes are aligned to the same strategic objective and purpose.
By managing the collection of projects in a holistic way, benefits to the organisation are maximised. PMI reports that organisations with mature program management are substantially more successful than those without it.
Similarly to a project, a program is temporary, once all the related projects are complete, the program is complete.
What is a Portfolio?
The portfolio is typically managed at the organisational level. A portfolio is described as “A collection of projects, programs and other work that is grouped together to facilitate the effective management of that work to meet strategic business objectives.” A crucial point to make is that the projects or programs in a portfolio are not necessarily interdependent or directly related.
Portfolio managers monitor progress, ensure that the projects being chosen support business objectives, and identify ways to improve to further benefit the business.
What’s the Difference between Project, Program and Portfolio Management?
Project Management
Projects are run by project managers who aim to deliver results and meet objectives within budget, schedule and to a high quality. The process of project management involves a range of activities including:
- Coordinating and motivating the team
- Resource management
- Managing variations and budget
- Monitoring actual progress against planned progress
- Risk management
- Making sure the deliverables meet the promised standard
Project management software is invaluable to project management.
Program Management
Whilst project management is concerned with specific deliverables and day-to-day tasks of project execution, program management focuses on the bigger picture of business benefits.
A program manager is less involved with micromanaging all the projects within the program and is more focused on the relationship between the projects and coordinating with multiple teams across different disciplines. This entails making sure there is effective communication and minimal conflict between the different departments, optimal resource allocation and that the projects are completed to the required standard.
Roadmaps are a common program management tool used to define timelines and milestones and translate goals into strategic plans. Program management also involves risk management, analysing the benefits of each project and continuously improving ways of working.
Project Portfolio Management (PPM)
Project portfolio management, or PPM, is the centralised management of one or more portfolios. PMI says the process is about selecting the right projects at the right time as a portfolio of investments.
Portfolio management involves regularly evaluating and assessing projects and programs to prioritize them and ensure they align with agreed goals and objectives.
Portfolio managers identify, prioritise, manage, authorise and control projects and programs in accordance with the organisation’s goals and objectives. If done correctly PPM builds synergies between projects which has positive knock-on effects. For example, it can improve resource management as typically resources are limited and with good portfolio management you have a clearer understanding of your resources and can make more informed, smarter decisions.
Although good PPM increases business value and return on investment, most organisations fail to successfully manage their portfolios. Prioritisation is the biggest challenge for portfolio managers. Research shows that of the portfolio managers struggling with prioritisation, 42% struggled most with saying no to projects whilst 33% struggled most with accurately ‘scoring’ the value of portfolio projects.
Although it is tempting to take on as many projects as possible, this can negatively impact the quality of your portfolio if it is not managed appropriately. This reinforces that organisations must leverage technology such as portfolio management software to improve their organisation, collaboration and visibility.
What are the best PPM software tools?
PPM software is used by organizations with complex projects and large portfolios that need strategic alignment. The PPM software tools help them manage and execute their projects effectively. Here is a brief overview of leading PPM tools, outlining their key features and target customers.
- Proteus is a cloud-based PPM tool making project management easier by providing one central place for accurate information. This helps project managers keep a close eye on progress and address problems promptly and efficiently. Target users: Energy and engineering operators and developers, engineering and energy consultancies and enterprises.
- Planview Project Portfolio Management is a cloud-based Project Portfolio Management (PPM) software. These tools help organizations plan, prioritize, manage, and track projects and resources efficiently. The tools are designed to assist in all aspects of project management, making the process easier and more organized. Target users: IT development, manufacturing, professional services, and finance.
- Oracle Primavera is commonly used for planning, scheduling, and resource optimization. Popular because it can grow, Oracle has advanced options for very large enterprises. Target users: Construction and large-scale project businesses
- Dynamics 365 Project Operations by Microsoft connects sales, resource, project, and finance management in one app for better efficiency. Target users: Companies with projects using Dynamics 365 platform for ERP and CRM.
Conclusion
The key difference between projects, programs and portfolios management is their scope. Projects are a part of programs and portfolios and programs fit into larger portfolios. Project managers, program managers, and portfolio managers need to understand each other’s roles and responsibilities to ensure organisational success. PPM software is essential to achieving this success and it is worth remembering that one size does not fit all. Having a tool that uses the right structure and terminology is key. For organisations working on large, complex engineering projects that require robust planning and comprehensive tracking, Proteus is fit for purpose.