Project Managers and project management in general has its own lexicon. Acronyms abound when we speak PM. And we tend to mix terms causing further confusion. Programs are projects, projects are programs and then we add project portfolio to the mix. YIKES!! Can we have a cheat sheet, please??
Portfolios contain the projects and programs that are linked to strategic business objectives. These objectives are defined by the organization’s strategic plan. An organization can have more than one portfolio, each addressing distinct business areas (like marketing) or objectives (introducing products into a new market).
The portfolios exhibit the investments (projects and programs) planned or made by the organization. If projects or programs do not align with strategic objectives, it most likely will not become a part of the portfolio. Also, changes to the strategic business objectives will require a re-alignment of the portfolio.
Programs consist of multiple projects. The projects are related by virtue of common results or collective capability that the program will deliver. There is a benefit that will be derived when the program concludes. A good example of a program is Extreme Home Makeover.
To build the house, numerous discrete projects execute simultaneously, but are coordinated to obtain benefits (the completed house) and control of the end result that would not be possible if managed individually. There are programs where projects deliver benefits incrementally, before the program completes. An example of this is a process improvement program that consists of multiple projects in the program.
Last, but not least, projects. Projects are tactical in nature whereas programs and portfolios are more strategic. Now don’t get me wrong, a project should be linked to a strategy. The company is making an investment for a reason. It is a part of achieving a strategic objective, and does not have to be a part of a program to be in the portfolio. It can be a lone wolf. But a project can be undertaken for other reasons, such as implementing new regulations.
So to sum it all up:
- · Portfolios consist of projects and programs
- Must align with strategic objectives
- · Active for a very long time
- · Reviewed and revised if strategic objectives change
- · Programs consist of projects
- · Active until all components are delivered
- · Projects within the program can deliver their benefits incrementally or when all the projects of the program are finished. Then the program is retired
- · Projects are more tactical in nature, a temporary initiative, with a defined start and end date, undertaken to meet unique goals and objectives, to bring about beneficial change or business value.
Can you tell the difference now?
© 2011 Gwen Miller, PMP