In our continuing look at some of the basics of project management, we’re going to consider some related, similar-but-different terms used in project management: projects, programs, and portfolios. And we’re going to discuss operations management as well.
This material is based on materials from A Guide to the Project Management Body of Knowledge (PMBOK Guide), which is published by the Project Management Institute, also known as the PMI. If you’re not familiar with the Project Management Institute (PMI), they’re the organization that certifies project managers. So–big shots in the field. And if you’re not familiar with the PMBOK, it’s the “body of knowledge” for project management and it includes the standard for project management, ANSI/PMI 99-001-2017. So, important stuff to know about if you’re a project manager and/or if you want to get a project management certification.
And if you’re looking to take some online courses on the topic of project management in order to prepare for the PMI’s Project Management Professional (PMP) exam in order to become a certified Project Management Professional, our Vector Solutions business partners over at RedVector specialize in that very thing–check ’em out!
Also, since you’re reading this article, we assume you’re interested in all-things-project-management, so please help yourself and download the Intro to Agile infographic at the bottom of this article.
Projects, Programs, and Portfolios
If you think these three words–projects, programs, and portfolios–are interchangeable, it’s easy enough to see why. They’re not the same thing, but there’s no reason to kick yourself over not knowing that.
A simple way is to think of these terms as belonging to a hierarchy. Or, if you close your eyes and create a mental image of those nesting dolls that fit inside one another, you’re getting close.
Let’s take a little closer look to explain this more fully.
A project is what a project manager manages, obviously.
According to the PMI, a project is “a temporary endeavor undertaken to create a unique product, service, or result” (PMI, 2017, p. 13).
Additionally, projects “have defined objectives;” their scopes are “progressively elaborated throughout the project life cycle;” and their “success is measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction” (PMI, 2017, p. 13).
Project managers may manage project that fit into either of these three scenarios:
- Stand-alone projects that are not part of a program or portfolio
- Projects that are part of a program
- Projects that are part of a portfolio
And, as we mentioned earlier, projects are managed by project managers (presumably, this is YOU).
So, let’s continue so we can learn more about programs and portfolios.
A program is simply “a group of related projects, subsidiary programs, and program acivities managed in a coordinated manner to obtain benefits not available from managing them individually” (PMI, 2017, p. 11). In the PMBOK, the PMI also notes that programs aren’t big projects–there’s a different word for that, which is “megaproject.” We’ll write more about megaprojects for you later.
In the business world, people often talk about economies of scale. That’s similar to the idea of grouping projects into a program–notice the PMI’s definition mentions “benefits not available from managing them individually” (PMI, 2017, p. 11).
If it’s true that projects are managed by project managers, you may have guessed correctly that programs are managed by program managers. Note that project managers don’t manage programs.
So portfolios are the last of the three terms we want to define for you in this article.
Again according to the PMI and their PMBOK, “a portfolio is defined as projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives (PMI, 2017, p. 11).
Projects, Programs & Portfolios: Distinctions and Overlaps
So as you see, projects, programs, and portfolios create a hierarchy. A portfolio can include programs; a program can include projects; and while a project might be part of a program or portfolio, it doesn’t have to be and it can exist independently as a stand-alone.
Each can have their own different “life cycles, activities, objectives, focus[es], and benefits” (PMI, 2017, p. 11). But they may include or interact with some or all of the same stakeholders, and they may need to use teh same resources. This can create conflict in the organization unless it’s carefully minded.
Then What Is Operations Management?
Operations management is the process by which an organization produces good or services. Project management is not responsible for operations management, although the two may intersect at times. However, project management may be used when changes occur to production processes or when a new product is introduced.
Conclusion: It Pays to Know the Three Ps of Project, Program, and Portfolio
We hope this brief introduction to some terms used in project management was helpful. Stay tuned for more short articles on project management, and don’t forget to check out our online courses on the topic of project management to help you prepare for the PMP exam and become a certified Project Management Professional.
Intro to Agile Project Management Infographic
Download this infographic about agile agile project management, including the Agile Manifesto, 4 Agile Principles, and 12 Agile Values. And check out us for online project management continuing education and certification examination prep courses.