The Relationship Between Project Management and Program and Portfolio Management

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In this article we will discuss the activities involved and the relationship between portfolio management, program management, project management and organizational project management.

In addition, we will look at the role projects have in strategic planning and finally we will discuss the project management office and its importance.

Portfolios, programs and projects are all related and aligned to organizational strategy. In the same manner, portfolio management, program management and project management all contribute to the achievement of the strategic goals of the organization in different ways.

The various activities of these three areas all relate to the organizational project management (OPM). Organizational project management is the systematic management of projects, programs, and portfolios in alignment with the achievement of strategic goals. The PMI concept of organizational project management is based on the idea that there is a correlation between an organization’s capabilities in project management, program management, and portfolio management and the organization’s effectiveness in implementing strategy.

A program is a group of projects that are similar in scope, activities, and have similar subprograms. The purpose of a program is to manage the projects in a coordinated way.

Not all projects conducted within the organization will fall into the same program. however, programs will always have projects.

Program management involves providing the application of knowledge, skills, tools and techniques to the program in order for program requirements to be met.

Program management focuses on the co-operation between the projects to determine the optimal approach to managing them. Usually these projects are interdependent, for example having the same resource requirements, governance structure and similar strategic organizational direction along with this they may face similar issues and change management considerations.

Portfolio Management

The portfolio includes all programs, projects, and subprograms that meet a strategic objective of the organization. Programs and projects do not need to be related in order to be in the portfolio, the only requirement is to contribute the same overall strategic objective(s) of the organization. Portfolio management is the centralized management of one or more portfolios that will help the organization achieve its overall strategic objectives, it is concerned with all projects and programs, part of the management process is to ensure that all projects and programs have the proper resource allocation and that all programs and projects are aligned and support the overall strategic objectives of the organization.

Now we will look at projects and strategic planning

Projects should be created to directly or indirectly assist with the achievement of an organisation’s strategic objectives

Some strategic considerations which lead to projects include:

  • Market demand – Many industries are facing a time of change and great competition. It is important for organizations to recognize the needs of the market and respond appropriately. Because of the importance of responding quickly, effectively and cost efficiently projects are often initiated to address these issues or opportunities
  • Strategic opportunity or a business need – A project may be initiated to develop new product or service in order to expand the organization, increase revenue, or solve a problem that company is encountering
  • Social need – Projects are initiated to help a community or group of people solve issues the people may be facing.
  • Environmental considerations – Companies today are continually looking for new ways to improve their operations to be more “environmentally friendly”.
  • Customer request – Organizations are always looking for new ways to satisfy the needs and wants of the customers, so a project may be setup to meet a specific customer need.
  • Technology advances, technology continually changes, as a result the products, services, and operations of the organization must be continually improved to stay in line with trends, opportunities or threats caused by these developments
  • Legal requirements, organizations are required to follow and meet certain legal guidelines for their industries, project are often developed to meet these requirements.

The Project Management Office

A project management office (PMO) is a management structure that is used to standardize project processes and also allow for the sharing of resources, methodologies, tools, and techniques.

The PMO can be supportive in nature. In this role, the PMO takes on a consultative role to projects by providing templates, best practices, training, access to information and lessons learned from past projects. In the supportive role, the control level the PMO over the specific project is low

The PMO can also have a controlling role, in this role, the PMO would provide support and require compliance through various means. They include having standard project management practices and methodologies, using similar templates and tools. In the controlling role, the control level the PMO has over projects is considered moderate

Finally, the PMO can have the directive role. In this role, the PMO takes direct control of the projects in its remit. In the directive role the control level the PMO over the projects’ processes is considered high.

The PMO can provide a great benefit to the organization through sharing information, identifying and implementing common methodologies, training new project managers and coordinating across different projects.

The role of the PMO will be determined by the organization and the level of structure considered to be necessary

In general project managers are still in charge of their individual projects and PMO is concerned with establishing guidelines and providing support to all projects