How are Project, Program and Portfolio (3Ps) related?

Project, Program and PorfolioWhat does a project do for the organization?

Simply put, a project helps an organization achieve a goal.

Let us recall the definition of a Project -

Project is a temporary endeavor undertaken with a specific start and end date, with an expected outcome of a Product, Service or Result.

What is a Program, then?

Program is a collection of related projects that are dependent on each other and serve a common outcome.

If these projects are to be executed separately, their value to the organization would be lesser than what you get by doing them together under a program. Projects in a program serve the purpose of common outcome.

Exam pointer> Get this subtle difference. If the objective of a Program is only getting a shared benefit (like shared technology, client or resources), PMBOK® suggests that it should be done together as a Portfolio and not as a Program. There may be a question around this in the exam.

Let us look at an example of a Program.

XYZ Construction Company run a program for building a township. This township consists of luxury apartment project, low cost single-family house project, and a commercial purpose office building project.

Example of Program

Figure 1: A program may have one or more projects

A Project may or may not have an associated Program, but a Program will always have Project(s) associated with it.

When you manage this program, there would be certain work that is not part of scope of individual projects. For instance, this program to build township will also include the work of laying roads. However, this may not part of any of the individual projects such as the luxury apartment project, low-cost single-family home project or commercial office project. When these projects are successfully completed you have the township built.

What is a Portfolio?

A portfolio is a collection of projects or programs managed together in order to gain a business benefit.

These programs or projects may or may not be related.

An example of portfolio would be – a clothing firm has a portfolio that serves strategic goals of improving the effectiveness of IT, introducing new brand of teen-clothing, reducing inventory costs, and increasing user satisfaction.

Example of Portfolio

Figure 2: A portfolio will address strategic goals of the organization

Here is a bonus tip-

Two points to remember the differences between the 3Ps (Project, Program, Portfolio):

Project Program Portfolio
Unique Benefit Related projects, shared benefit Achieve a business objective
{project1} {project-1, project-2,…project-X} {project-1.. project-X; program-1…program-Y}

What binds these 3Ps at the organizational level?

Organizational Project Management, or OPM, ties these 3Ps – Project, Program, Portfolio – together at the organizational level and helps it move towards its vision. There are certain aspects of running an organization that are controlled and managed at a level above these 3Ps, such as cultural influences, human resource practices and so on. These aspects support and enable Portfolio, Program and Projects to run efficiently.

There is an entity in an organization that helps manage Projects, Programs and Portfolios..

And it is called Project Management Office (PMO).

The PMO in an organization sets up processes, guidelines and standards to manage these 3Ps. It also helps to share resources, knowledge and best practices across projects in the organization. However, it is not uncommon for it to manage a project completely on its own.

How does PMO help you as a Project Manager?

The Project Management Office does the following –

  • setting up methodologies, practices and standards and train people
  • managing shared resources and communication across projects
  • conducting project audits to check compliance with these practices

Types of PMO

There are different, broadly following three types are used:

Supportive PMO
As the name suggests they support you, the project manager, with templates, best practices and even training. This type of PMO cannot have much control over how project is managed.

Controlling PMO
This type of PMO is a bit more involved with project management. It not only supplies necessary artifacts and procedural help along with training, it demands compliance to the project management practices and methodologies it prescribes. You need to provide constant feedback to PMO on the compliance and implement changes to practices and methodologies it brings in from time to time.

Directive PMO
This type of PMO pretty much manages the project on its own and hence has complete control over how things are done. Generally, whenever a new type of or larger scale project is taken up by the organization for the first time PMO dons this role, to make sure that the project has high chances of success, and to set a benchmark for further such projects in the organization.

basics-ppp-man-asking“Wait a sec. I got the difference between the 3Ps. My office has an IT team that helps us with problems of our computers, and keeps our servers running all the time. They also manage any issues with network connectivity and network security. I have seen that team doing planning, work allocation and holding status meetings. And they do these all the time – there is not ‘a start and end date’. Is it a Project? Or a Program, may be? Definitely not a Portfolio. I am not sure!”

Great point!

These are ongoing activities that produce repetitive service. Such activities are called Operations. Managing them is called Operations Management, or Business Process Management.

Consider few examples –

  • Accounting operations of an enterprise
  • Shop-floor production management process
  • Preparation of daily food for patients in a hospital
  • Stabilization and support of a software product by the maintenance team

Projects can intersect with operations at different milestone points. For instance, a project phase ends and the enhanced product is released to production. Now the maintenance team gets into action, it is trained on usage and troubleshooting new features so it can support customers of this product.

Apart from the fact that operations are ‘ongoing’, rest of the characteristics remain same as that of a project –

  • Performed by individuals
  • Limited by constraints
  • Planned, executed, monitored and controlled (but, not ‘closed’)
  • Address organizational objectives

That’s pretty much you need to know about all the Ps – Project, Program, Portfolio, PMO. Let us move on to understand various constraints a project manager has to deal with.

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