Project Management vs. Program Management vs. Portfolio Management

The program management definition varies according to the source; however, the Project Management Institute (PMI) defines it as “a group of related projects managed in a coordinated manner to obtain benefits not available from managing them individually.” They go on to say “effective program management provides a mechanism for controlling the strategic, financial and operational risks of major endeavors.”

Programs can be viewed in a couple of ways. First, they are a collection of projects that aim to achieve the same or similar enterprise objectives. They are a roll-up of related projects that need to come together to achieve a goal.

The projects within a program may be separate, assigned to different teams, and managed by distinct project managers, but they all aim to achieve outcomes tied to the same strategic objective. For example, there may be multiple projects running independently, yet with interdependencies, all aligned to achieve the singular program goal of reducing customer churn.

But there is much more to program management than a collection of similar projects. The goal of program management is to enable strategic execution by organizing people and teams across departments to work together with a shared purpose.

Effective program management balances and optimizes people and dollars across projects, enabling the enterprise to prioritize and fund the programs that drive the most value.

While project management is more concerned with specific project tasks and deadlines, program management is focused on strategic planning, continuous improvement, and value realization. Program management ensures sets of projects are better aligned to corporate strategies and resources are optimized across the organization with minimal conflicts that can cause delays or budget issues.

One of the most effective program management tools is roadmaps to translate vision into strategic plans. Roadmaps offer a visual way to define program timelines, milestones, and releases while giving managers the ability to justify decisions and communicate the plan across the organization.

Programs often have strategic business objectives that are transformational in nature and cross departments or business units. Program management is the translation of strategic objectives into measurable business outcomes, coupled with the integration of many related initiatives required for the outcome to be realized.

Learn more about how program managers help operationalize strategic plans. Read Program Management: The Key to Strategic Execution

According to the Project Management Institute (PMI), a project is a “temporary endeavor taken to create a unique product, service, or result.” A project is typically a team effort designed to achieve a specific objective and has a defined beginning and end. While projects may be finite, they can vary widely in size and scope.

Project management is the discipline of using principles and procedures to manage a project from conception through delivery of an outcome, such as an application, event, product, or service. This can include:

• Definition of project goals
• Intake and management of requirements
• Breakdown and scheduling of tasks
• Budget and cost management
• Assignment and management of project resources
• Communication of project status against milestones

PMI says portfolio management “is a way to bridge the gap between strategy and implementation.” Instead of focusing on a particular project, portfolio management considers every project or potential project and its potential to achieve business goals. The objective of portfolio management is to effectively balance the implementation of change initiatives with the potential return on investment. It highlights questions such as:

• Do I have the necessary resources and budgets to initiate a new project?
• Are there other projects that can be modeled?
• Are there any current projects that may interfere with this new project?
• Do we need to adjust stakeholder expectations?
• Does this project align with our enterprise objectives?

Effective portfolio management results in organizations being able to predict outcomes and plan for projects that will offer the best results. Portfolio management results in a singular strategic plan that drives transformation programs and facilitates the prioritization of decisions across technology, work, and resources.

Beyond program versus project management, it’s important to understand who manages each and the specific roles assigned to each.

The role of the program manager varies depending on the organization. Some organizations emphasize the business aspects of the role. Others focus on IT or specialized technology and will highlight specific technical and project management qualifications.

Program managers lead the end-to-end charge of the cross-functional program, from shaping the approach to the delivery of the set of desired outcomes. The program manager also has responsibility for:

• Prioritizing and budgeting initiatives
• Defining a cross-organizational roadmap
• Ensuring resources capacity and availability
• Managing interdependencies between projects
• Ensuring program-level goals are achieved

Program managers often report to an Enterprise PMO, Strategic Planning Office, or line of business and have responsibility for managing strategic initiatives that span departments and business units.

Some project managers come with years of project management experience, but in many cases, they are what Project Management Institute (PMI) calls “The Accidental Project Manager” – professionals who simply fall into a project manager position without much experience. An Appleseed Partners survey of 200 people who manage or participate in projects found as many as two out of three participants may not be project management certified and of those, 30 percent consider themselves accidental project managers.

The responsibilities of a project manager may include:

• Project scoping, scheduling, and approvals
• Resource management
• Budget management
• Risk management
• Status reporting to team members and stakeholders

A portfolio manager is responsible for managing and leveraging the life cycle of investments, initiatives, programs, projects, and outcomes to optimally achieve enterprise goals and objectives. Portfolio managers work to optimize their project portfolios, balance capacity against demand, and connect plans and resources to project execution.

In some organizations, project managers, program managers, and portfolio managers work in or with a group or department called a Project Management Office (PMO). The PMO defines and sets standards for how projects are managed within the organization.

The Program Management Office is not typically what is meant when we define PMO. The PMO acronym is most commonly used in relation to a Project Management Office. Yet, Gartner and other authorities have often used the term interchangeably or with slight nuances for a decade or more.

Instead of focusing on the day-to-day project operations and shorter-term initiatives of the Project Management Office, the Program Management Office is concerned primarily with the programs across the enterprise and how those programs are performing towards the broader goals of the enterprise. The Program Management Office has become more prominent with the surge of digital transformation programs that perfectly fit into the wheelhouse of program management, being cross-functional, cross-enterprise, and involve ongoing change.

Just as projects roll up under the programs and the programs roll up under the portfolio, the Program Management Office has an eye on the progress and performance of all the projects within each program to ensure the overall program is meeting key milestones toward strategic objectives.

Gartner says the Enterprise Program Management Office “offers an effective but politically sensitive way to solve the problem of how to address competing plans and unarticulated interdependencies.” Further, it provides insight into “the portfolio of technology investments” and “better visibility into priorities and decisions made by the organization.”

In essence, the Program Management Office works with PMOs and departments to ensure:

• resources are properly allocated across programs
• programs are aligned with portfolio objectives
• programs are effectively prioritized and achieving value

The Program Management Office plays an important role in translating strategic objectives into measurable business outcomes. Compare the responsibilities of the Project Management Office with those of the Program Management Office:

A project portfolio is the group of projects being worked on by an organization.

Project Portfolio Management (PPM) is typically a function of the PMO team and is a formal approach to orchestrate, prioritize, and analyze the potential value from a set of projects. An organization that employs project portfolio management centralizes the identification, prioritization, authorization, and management of projects within a portfolio.

Most PMO teams employ some form of software designed to automate many of the functions required to successfully manage projects and project portfolios. Greater automation leads to greater visibility, deeper insights, and improved efficiency with the use of actionable data. But, one size does not fit all requirements.

Just as there is a difference between the scopes of project management, program management, and portfolio management, there is also a difference between project management software and project portfolio management software. Keep in mind that a project manager is concerned with tasks, deadlines, and output, while a program manager is focused on broader initiatives, roadmaps, prioritization, and resource capacity. Clearly, each requires specialized software geared towards their interests and responsibilities.

Project management software facilitates common project management functions such as the creation of a Work Breakdown Structure (WBS) and Gantt charts. Project portfolio management software delivers the functionality found in project management software combined with additional capabilities required to manage project portfolios. The most recognized project portfolio management solutions deliver capabilities required to manage work and resources across the portfolio such as:

• Centralization of projects
• Project alignment and prioritization
• Real-time analytics to measure and manage projects and resources
• Resource management and capacity planning
• Time tracking
• Project financial management
• Intake and demand management
• Integrated Gantt charts
• Visibility into all types of work – agile, collaborative, iterative, project
• Investment planning and portfolio/program level financial management
• Roadmapping
• Program management
• Dependency management
• What-if scenario planning

It’s important to choose software that performs well for each use case and can scale to meet the changing needs of the enterprise. Home-built or retrofitted legacy applications typically do not provide the level of integration, transparency and ease that a purposely built software solution can offer.

Project management software is within reach for most organizations and well worth the investment. The cost of doing nothing or relying on incomplete or obsolete applications is high and can be attributed to many of the most common pain points felt by many organizations.

According to the PMI “Pulse of the Profession 2020,” highly mature organizations are significantly more capable or meeting their goals on time and within budget and have less scope creep and fewer project failures.

Higher maturity organizations leverage PPM software primarily to provide the necessary visibility that is typically lacking from project management. Without a complete, real-time view of projects, work, and resources in the context of strategy, it is challenging to make informed decisions about where to invest.

This is why Gartner recommends using project portfolio management software, saying, “Continuous delivery is driving more PPM leaders to connect aligned strategic business investments with diversified, changing, delivery-focused, on-time value.”

If your organization never seems to have enough resources to meet incoming demand, PPM software will help your PMO balance, prioritize, and schedule resource capacity. It provides a real-time view into both future and in-flight work across project teams, departments, geographies, and the enterprise, and shows interdependencies. This insight makes it much easier to prioritize and plan resource allocation over time, as well as rationalize the need to hire additional resources.

If your organization’s projects are not aligned with business goals, PPM software will help your PMO centralize demand intake and optimize the project portfolio to deliver on strategic initiatives. With corporate strategies defined, the PPM software makes it easier to see where gaps and disconnects are apparent while also providing data to justify decisions.

If a large percentage of your organization’s projects fail, PPM software will give your PMO team a unified, top-down view of all work and resources so they can proactively manage and project changes and risks. You will be better able to see risks and address them early, before they doom a project to failure and before they consume valuable resources that could have been better spent elsewhere.

PMO teams have always been in a position to provide value. But staying relevant means changing with the times and adapting to changes in technology, management demands, and business needs. Arming your PMO team with the right tools empowers them to drive both the strategic and the day-to-day programs that advance the corporate strategy.

Integrated program, portfolio, and project management require a consistent organizational management structure addressing all three domains. It’s important to remember that while integration is key, the management of these domains should remain separate and complementary at the same time.

Project portfolio management (PPM) software provides an opportunity for organizations to improve PMO performance, make better decisions, and operationalize business strategy by centralizing demand management, prioritizing work, and improving visibility into the portfolio of projects.