Project Management Program Management Portfolio Management
Project Management, Program Management and Portfolio Management are very important terms in project scope management. Although they sound similar, they refer to different concepts. Many PMP aspirants don’t know the differences between them. Knowing these concepts and understanding their differences are essential to pass the PMP Certification Exam. This article we will discuss Project Management, Program Management and Portfolio Management concepts to assist PMP aspirants.
A project is a temporary and unique operation planned to achieve a singular goal such as building a product or developing a system. A project may be a power plant construction, computer program development, disaster relief effort etc.
It has a defined start and finish time, scope, resources, duration, goals to create or build a result. Simply put, a project has a temporary nature which comes to an end when it achieves it’s objective.
For instance you signed an agreement to build a dam for government. You completed the construction, tested the equipments and handed over to the client. You closed the project after the handover. After the competion of your project, you demobilize the equipments and employees from the project site because the nature of project is temporary.
Program is a batch of related or similar projects managed coordinatedly. Because managing them in a coordinated manner provides more benefits than them projects seperately. In other words, programs have several projects that can increase benefits when handled together.
For instance, let’s assume that you have two projects: the first project is a real estate project and the second project is a hospital construction project. Since these two projects are similar in nature, you will keep them under the same program. You are planning to reduce the general expenses by managing them simultaneously. Also you will request discounts from the suppliers because you will purchase high amount of materials for both projects.
Portfolios involve related or non related projects and programs managed together to meet strategic business objectives. Projects and programs that form a portfolio may be or may not be interdependent.
A portfolio may involve several projects and programs. These programs and projects may be related or non related. Business, profit, non-profit, government projects may be kept under the same portfolio.
For instance, let’s assume that you have three projects: the first project is a real estate project, the second project is a software development project and the third project is an expansion of your company’s sales into a new market.
Project management is the process of applying knowledge, skills, tools and techniques to meet the project goals. Therefore project management involves initiating, planning, executing, monitoring and controlling & closing processes to complete a project successfully by meeting the project requirements.
Benefits of Project Management
- Improves customer satisfaction
- Improves the quality of product or project
- Increases risk assessment
- Increases flexibility
Project management is the process of applying knowledge, skills, tools and techniques to meet the program goals.
The main objective of program management is to meet program requirements by managing the projects as a group. Organizations which are experienced in program management are more successful and efficient and than others.
Program management focuses on managing interrelated or interdependent projects. Managing projects by optimizing resource usage increases productivity within the organization.
Benefits of Program Management
- Decreases conflicts among projects.
- Optimizes resource usage among projects so that resource constraints can be minimized by performing effective program management.
- Improves communication, coordination and collaboration among projects
- Improves organizational efficiency, productivity and profitability.
Portfolio management focuses on identifying, prioritizing, authorizing, managing, and controlling projects and programs to meet the business objectives.
Portfolio management is a business process of managing several related or non related projects and programs. Portfolio management is conducted by a portfolio manager or a team. Project and program categorization and performance monitoring of the categories are interrelated processes in portfolio management.
Portfolios involve projects and programs. The main objective of portfolio management is to identify and prioritize projects and programs to use the resources among projects and programs to improve organizational efficiency.
Project Management vs Program Management
- Project management focuses on managing an individual project where program management focuses on managing a group of projects.
- Similar projects form programs. In other words, programs involve similar projects. However a program is not a part of a project.
Program Management vs Portfolio Management
- Program management is the practice of managing similar projects. On the other hand portfolio management is the practice of managing non-similar projects and programs.
- Projects and programs form portfolios. In other words, portfolios involve similar projects and programs. However a portfolio is not a part of a project or a program.
Project management is a process of managing only one project. On the other hand, program and portfolio management are the processes of managing several projects.
Program management involves managing a group of related projects and portfolio management involves managing similar, non-similar projects or different programs.
Project manager is responsible for managing only one project. Program manager is responsible for managing programs and portfolio manager is responsible for managing portfolios. Project managers, program managers and portfolio managers responsibilities and success criterias are different.
In this article we discuss the terms Project Management, Program Management and Portfolio Management which are widely used in project scope management. Note that you may encounter more than one questions in the PMP Certification Exam.
What is a Portfolio Management ?