Project, Program & Portfolio Management: Key Differences

All businesses need to implement efficient project management into their operational model, and the burning question most face is “project management vs portfolio management?”?

Modern, agile organizations are constantly looking for innovative ways to improve processes and optimize their resources, so it is crucial that projects are well-managed and timeous.

While most projects are temporary and unique, portfolios tend to be ongoing initiatives that involve cohesive and strategic objectives. A project manager will look at the requirements of an individual task or objective. On the other hand, portfolio managers assess all programs and projects, to help prioritize work and ensure the benefits realization.

The Relationship Between Project Program and Portfolio Management

The relationship between project, program, and portfolio management is best understood by defining what the function of each part is.

• A project is a temporary undertaking by a company – such as developing a new product or offering a new service.?
• A program is a collection of projects that are either related to each other or similar in nature – often coordinated and managed as a group instead of independently, which aim to jointly reach the same business objective.?
• A portfolio is a collection of different programs and/or projects that may or may not be related to each other.

It is clear from this explanation that project management vs portfolio management cannot be discussed without understanding program management. Essentially, projects fit into larger programs that, in turn, fit into larger portfolios.

With that being said, let’s explore how project management is different from portfolio management – and where program management fits into this picture.

What Is Project Management??

When considering the different parts of project management, the project aspect is at the bottom of the pyramid of the hierarchy. It is described as a temporary undertaking that creates a unique service, product, or result. Once the objective of this project is reached, that project no longer exists.

The purpose of project management is to manage a project in order to achieve its objectives efficiently and effectively. This process entails starting the project, creating a plan of action, implementation, and controlling the activities for the duration of its lifecycle. The final point would be to close the project.

In essence, project management is spearheaded by a project manager and involves applying skills, knowledge, and techniques to meet the objectives.

What Is Program Management?

A program sits in the middle of the pyramid and is a collection of related projects that are strategically coordinated. This is done collectively, to enjoy the control and benefits that are non-existent if those projects were to be managed individually.?

From this, it’s safe to say that a program will consist of multiple projects – similar or related – that are managed at a higher level.

All programs are managed under program management. This is the centralized coordinated management of a program where strategic objectives are met through the management of interrelated or similar projects collectively to achieve a specific result.

Program management is effective as it optimizes the use of resources amongst multiple projects. By doing this, it reduces friction and enhances the performance of the organization. A by-product of this approach is better coordination and communication amongst projects.?

A program manager would typically oversee this function in an organization.

What Is Portfolio Management?

A portfolio can be described as a collection of projects or programs that may or may not be related to each other. A portfolio can contain multiple projects or programs that are dissimilar.?

All portfolios are managed under portfolio management with a centralized system of management. This is particularly helpful in identifying, prioritizing, and authorizing different programs or projects, helping the organization meet its strategic objectives.

This person is tasked with setting the priorities of projects and programs, based on the predetermined objectives of the organization. These priorities are determined by the benefit they provide to the organization.

With portfolio management, resources are allocated and used optimally among the many different programs or projects. There is also improved communication and coordination amongst projects and programs, including a reduction in conflicts.

Project Management vs Portfolio Management: Key Differences

Based on the various roles, we can begin to understand the differences. While the dissimilarities between project management vs portfolio management are central to our discussion, these variances wouldn’t make complete sense without examining program management.

Project management is mainly focused on the following:?

• execution of a single project;
• regular reporting on the status of that project;
• ensuring that compliance is processed and being adhered to;
• the effective management of resources;
• facilitating project prioritization; and?
• managing the process of change management at a project level.

Program management is focused on:?

• the development of a roadmap;
• regular reporting on the performance of the program;
• interdependent resolutions;
• tracking of budgets across various projects;
• reducing risks;
• program governance; and
• managing the process of change management across the enterprise.?

Essentially, program management operates in an oversight capacity for project management.

Portfolio management – also known as project portfolio management – entails managing a company’s proposals, programs, and projects to accomplish organizations' strategic goals and ensure benefits realization?throughout?the product or?service?lifecycle. Portfolio management provides the highest level of overview for both projects and programs while providing deep insight into resource and budget allocation along with ongoing benefits management.?

Portfolio management is crucial in providing insight into future projects, as it uncovers where smarter investments can be made while also identifying gaps in current activities that have the potential to hinder future ones.

Final Thoughts

The success of the corporate strategy relies on new projects and programs. At QVISTORP, we take the guesswork out of your portfolio management needs.? Our state-of-the-art software will help you to operationalize your strategy and enable agile project portfolio prioritization throughout the entire lifecycle – essentially making your life a whole lot easier!?

Get in touch with our team today and take your business to the next level.

Krzysztof Janusz, KJ