Project vs. Program vs. Portfolio
A project is a temporary effort (has a specific beginning and an end) undertaken to achieve a specific product, service or result. A project may be part of a program or portfolio but a program or portfolio cannot be part of a project. Exhibit A (see below) shows the relationships between projects, programs, and portfolios. Exhibit B below demonstrates the relationship of strategy to portfolios, programs and projects.
Projects and types of projects are sometimes grouped together or managed together as a program. A program is a group of projects managed in order to obtain some shared benefit. Consider an engineering firm specializing in providing construction engineering services to large commercial clients. Projects in this organization may be grouped by commercial client in order to maximize resources and knowledge; both the firm and the client benefit from this grouping. The firm will most likely assign a program manager to manage the grouped projects for each major client.
Projects may also be grouped into programs because of specialty knowledge or other linkages. For example an Information Technology department may group its projects into programs based on the type of software, application or technology. The advantages of managing projects in a program include but are not limited to the following:
- Provides opportunities to leverage resources
- Provides opportunities to leverage specialty knowledge
- Provides opportunities to synchronize projects for maximum benefit
- Improves quality of the product, service or result being produced
- Improves overall control of the projects within the program
- Provides opportunities for additional benefits not available if the projects were managed independently.
Project Portfolio Management
A Project Portfolio is a group of projects and/or programs grouped together in order to achieve strategic business objectives. Project portfolios may differ by goal. A consulting firm may group its projects by geographical region into separate portfolios; each portfolio may then have its own set of business objectives or goals.
Tips for the exam
- Know the difference between projects, programs and portfolios
- Know that a project may be initiated to meet a program or portfolio objective
- Know that a project may be independent of a program or portfolio.
- Know that a portfolio may be comprised of projects and programs.
- Know that a program is comprised of projects.
- Know that managing a program or portfolio requires a different set of skills and management such as the prioritization of projects and maximization of benefits.
For additional clarification, please refer to the 5th edition of the PMBOK®.