Posted on 04/11/2010 · Posted in Change, Projects

The terms project, programme and portfolio are often used inconsistently with different organisations having contradictory interpretations of their meaning. This can lead to confusion both within the project management profession and with others in an organisation.  Here I provide my view of these project management terms which will hopefully provide some clarity of definition that I can refer people to in the future.

First a few words on abbreviations; PM is generally accepted as the term for Project Manager, but PPM tends to refer to Project & Programme Management in the UK but Project Portfolio Management in the US!  Not surprisingly I use the UK terminology for PPM and use PfM to abbreviate Portfolio Management.

Projects

This is the easy one!  Most people agree that a project is:

“a temporary endeavour designed to bring about some form of change”.

Generally projects will have the following features:

  • A defined start and end date
  • Deliver a specific product, service or change
  • Resources (manpower and budget) allocated to them that may span the financial accounting period
  • Some unknown elements which will create a degree of risk

Projects can be simple or complex, take a few weeks or several years.  Just because it is large and complex doesn’t mean it isn’t a project.   Some examples of projects are:

  • Migrating to a new company financial system
  • Extending the runway at an airport
  • Developing a new hospital

My general rule is, if the product or change being produced can be defined at the outset then it is a project.

Programmes

This is where it starts to get more confusing.  A programme should be established where there are a number of inter-related projects that all contribute to a strategic objective of the sponsoring organisation.  The key differentiator between a programme and a complex project is that at its outset it may not be possible to completely define the change that is being delivered.  For this reason programmes will have inherently greater risk than projects and will require different tools and techniques to successfully manage them.

Expanding on my examples above the project to extend the airport runway may be part of a programme to increase passenger throughput of a regional airport.  A number of separate projects will all inter-relate to achieve the overall objective, but at its inception the exact detail of how passenger throughput will be achieved is unlikely to have been defined.

In contrast the development of a hospital is a discrete change and although highly complex with multiple sub-projects it would be a project and not a programme because its change can be well-defined at the outset.

Within a programme the overall co-ordination of the inter-related projects will be the responsibility of a Programme Manager. The Programme Manager will be responsible for ensuring the programme  delivers the business objectives and is aligned to the organisational strategy – which could quite easily change during the course of the programme! This requires the various project managers to manage their individual projects to ensure they integrate into the overall programme plan. The role of the Programme Manager becomes one of management of risk, co-ordination of dependencies and re-prioritising projects as required, to leave the detailed planning and implementation to the individual Project Managers.

Portfolios

A portfolio is a collection of projects, programmes and maybe some business as usual activities,  grouped together to provide visibility to senior management and support prioritisation of business objectives.  Having a portfolio approach ensures that the projects and programmes which are directly aligned to the current business priorities are given priority and funding and those that may not have the same strategic importance are given a lesser priority or stopped completely.

The projects or programmes within a portfolio should represent all of the organisations change initiatives across all business and technology areas and will not necessarily be interdependent or directly related.

The Portfolio Manager will be responsible for identifying, prioritising and initiating all projects and programmes as well as monitoring the portfolio to ensure that the constituent projects and programmes continue to deliver against the overall strategic context of the organisation.  The Portfolio Manager will provide the necessary management information to senior stakeholders to enable them to make appropriate decisions on the projects and programmes within the portfolio.

Summary

Whilst Projects, Programmes and Portfolios are all mechanisms to manage change within an organisation the tools, techniques and roles of a Project Manager, Programme Manager and Portfolio Manager are all different and will require different skill sets.  Someone who is a good project manager does not necessarily make a good programme manager or vice-versa.