Project vs. program vs. portfolio management, explained
Project, program and portfolio management are related, but they represent three distinct disciplines. Learn about the responsibilities and goals of each and how they differ.
Some company titles are similar to others or used interchangeably, which can cause confusion, and such is the case with the roles of project manager, program manager and portfolio manager. Some similarities exist, but they each have a different scope.
The distinction is further complicated when an employee has one job title but performs multiple roles. For example, a worker might be a project manager and also perform the tasks of a program manager. However, the important distinctions are that a project manager controls the schedule and budget for a single project, while a program manager has responsibility for multiple projects, and a portfolio manager is responsible for building a list of requested projects and committed work.
Learn more.
What is project management?
Project management involves running a project. Projects are managed to ensure they are completed on time and on budget, and also so the project manager can control any unexpected issues that arise.
Project management also involves managing processes for change requests, scheduling issues and budget overruns. A lack of strong project management will result in failure for many undertakings.
What is a project?
A project combines a group of related tasks to create an output, such as a new product, a release or a service. Projects have a defined beginning and end.
Examples of project management
In the context of software development, project management involves overseeing the development of a new product or new version of an existing application. When a project team is formed, one person is assigned the role of project manager. They manage the project from start to end.
Another example is when a vendor works with a customer to implement the software that the vendor has sold to the client. A project team is assembled, composed of employees from the customer and vendor, with someone designated as the project manager.
What is the responsibility of a project manager?
Some of a project manager's responsibilities include controlling the project schedule and budget. They strive to keep the schedule up to date as the project progresses, including marking tasks as complete, adjusting due dates and dependencies, and working with team leaders to understand schedule challenges.
The project manager is also responsible for updating key stakeholders. If the project is not progressing according to plan, the project manager is responsible for figuring out how to keep the project on schedule and on budget by working with the project team on potential solutions.
What is program management?
Program management involves scheduling and managing multiple related projects, with the aim of achieving a company's overall goals through those projects. It is used when a goal is too large to complete in one project or when breaking a program down into smaller pieces seems advantageous.
What is a program?
A program is an overall plan to achieve a company's goals by aligning multiple projects and dependencies to attain a certain goal. Unlike a project, the program does not always have a clear end date.
Examples of program management
A company might use program management when the organization plans to work on a major release of an application but continue to deliver smaller updates along the way. In this case, program management would involve planning and aligning the major release project with the small projects that are delivering ongoing maintenance updates.
Another example is when multiple vendors are involved in delivering a large product. Each vendor might be part of a project to deliver their specific component, while the overall program has responsibility for ensuring that all components are planned and tracked and that the final product meets the strategic objectives of the program.
What is the responsibility of a program manager?
The program manager has responsibility for multiple projects. They work with each project manager and key stakeholders to align projects and meet the overall program's goals.
The program manager often plans future projects while remaining informed about current projects so they can make adjustments to the overall plan as needed.
What is portfolio management?
Portfolio management is a level above project and program management. It involves reviewing a list of possible projects and programs and systematically selecting the ones that will deliver the biggest impact as well as provide the best return on investment. The objective is to maximize a company's resources, both in terms of employees and funds, while meeting the company's overall strategic goals.
What is a portfolio?
A portfolio includes all the requested projects and ongoing tasks of a team or company. The list is then prioritized based on impact, cost and availability of resources.
Examples of portfolio management
An IT department often receives requests to implement new software or complete other types of projects. The amount of resources required to complete all the work often exceeds the amount of time and money available. Therefore, someone must list the projects, calculate their costs and have IT prioritize them, with input from the company's leadership team and the people making the requests.
A department within an organization might have multiple wish list projects. As the list grows, decisions must be made about the timing of each and whether some will be removed from the list altogether, given their low impact or high cost.
What is the responsibility of a portfolio manager?
The portfolio manager is responsible for building the list of requested projects and committed work as well as gathering the information necessary to prioritize the list. This includes meeting with key stakeholders and company leaders to make sure that all projects moving forward have full support as well as the resources needed to complete them successfully.
Project vs. program vs. portfolio management: What are the differences?
The three different management types can be considered in terms of a hierarchy. At the top is portfolio management, which involves deciding which projects and programs will move forward. The portfolio manager is also responsible, at a high level, for all ongoing projects.
Program management, which involves overseeing multiple related projects, comes next. Finally, at the bottom, individual projects have a defined start and end. Created to achieve a pre-defined goal, they are self-contained.
How do they work together?
All three management types are designed to achieve one or more strategic objectives but at different levels of granularity.
Portfolio management is the gatekeeper for all projects. Once a project is approved, it can move on to the next step. When a project is large, it might be broken down into smaller phases or sub-projects. When this occurs, a program manager is assigned to manage the whole program and make sure that each project is well defined and that each builds on the others.
Projects are initiated to fulfill the requests approved by the portfolio manager. Smaller or one-off projects might not be part of a program -- for example, a project to upgrade a company's website. Once that project is complete, the project team can move on to other projects.
Smaller companies will often follow an informal process for portfolio management. Also, a program manager will frequently take on the role of project manager as well when the program and its future direction is clear. For example, a program manager might be responsible for a product that is under development, with clear expectations that many projects will occur over several years as the product undergoes multiple major and minor releases.
Eric St-Jean is an independent consultant with a particular focus on HR technology, project management and Microsoft Excel training and automation. He writes about numerous business and technology areas.
