Project, program and portfolio are the terms often used in Project Management. Also there difference is necessary to understand in order to advance your career in project management, program management or portfolio management. Let us see what each of these term means with some examples.
According to PMI, ‘A project is a temporary endeavor undertaken to create a unique product, service or result’. Temporary nature of project means that it has a defined beginning and end in time, and therefore has defined scope and resources.
A more sophisticated definition of a project is, ‘A whole set of actions limited in time and space, inserted in, and in interaction with, a politico-socio-economic environment, aimed at and tended towards a goal progressively redefined by the dialectic between thought (the project plan) and the reality’ (Reference: PMJ Jun 2010, p13)
Another definition of project is, ‘A time-constrained operation to realize a set of definable deliverables up to quality standards and requirements, the scope of which fulfills the project’s objectives’ (Reference: IPMA)
A township has to be established for which divisions are made to carry out the work sequentially. Each house or building is considered to be the separate project which involves the set of complex activities like excavation, foundation and super structure etc.
A summary of some characteristics of a project is given in the table below:
|Set of Activities||To generate the deliverables with-in limited constraints||Unique Product, Service or Result|
A program can be defined as, ‘A group of related projects that is managed together. Programs usually include an element of ongoing activity’ (Reference: PMK96)
A program can also be defined as, ‘An endeavor of considerable scope encompassing a number of projects.’ (Reference: PMK87)
Projects involved in a program may not be similar but they are always inter-dependent.
If construction of a residential building is considered as a project then the construction of row houses and other residential buildings in same colony is a program as the goal is to make a township work successfully with all necessary facilities. So, the constituents involved are inter-dependent and share the same larger objective.
A summary of some characteristics of a program is given in the table below:
|Related Projects||To coordinate among different dependent projects which share the same goal||Generation of maximized organizational profit by meeting the final goal of the program|
A portfolio is defined as, ‘The totality of an organization’s investment, or segment thereof, in the Changes required to achieve its Strategic Objectives’. (Reference: PMG OGC 2009)
A program can also be defined as, ‘A group of projects or other items that are being worked on at the same time or have been completed and are used as an indicator of ability’. (Reference: OTOB p271-4)
Portfolio is basically a collection of project programs and operational work to achieve the business objectives. The constituents of portfolio maybe similar but they are not related.
A portfolio for the same example is the completion of housing society which includes programs, projects and subsidiary portfolios like residential buildings, commercial plazas, parks, schools and hospital etc whereas, portfolio management will play the role in optimizing the costs, prioritization of work and selection of projects and programs.
|Collection of programs, projects and subsidiary portfolios||To obtain the strategic business objectives||Increased profit on investment and reduction in costs|
PMJ Jun 2010, p13: Project Management Journal: Jun 2010, p13
IPMA: ICB-IPMA Competence Baseline v.3.0
PMK 96: Various original authors quoted in A Guide to the Project Management Body of Knowledge (known as “PMBOK®”) reprinted with the permission of the Project Management Institute. Please refer to the entry PMBOK® for details
PMK 87: Various original authors quoted in Project Management Body of Knowledge Glossary of Terms, Project Management Institute 1987
PMG OGC 2009: Portfolio Management Guide, OGC, 2009
OTOB p271-4: Baker, S & K. Baker. On Time/On Budget, Prentice Hall, Englewood Cliffs NJ, 1992