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Project, Program or Portfolio Management?

By Terry Deacon
The terminology used in project management can be confusing. Even
project management has multiple meanings. In the past it was only
associated with projects, but two decades ago that began to change.
Today the term project management is understood to include
program management and portfolio management.
The distinction between a project, program and portfolio is generally
not well understood. However, it is important to know the difference
because each has a special role to play. They need to be managed
differently if the organisations strategy is to be successfully
transformed into reality.
Clearing up the confusion
Whats the difference between a project, program and portfolio? This is clarified in three
watershed documents published at the end of 2007.
In the USA the Project Management Institute (PMI

) published The Standard for Program

Management and The Standard for Portfolio Management. In the United Kingdom the Office of
Government Commerce (OGC) published their Managing Successful Programmes.
You may ask, why program in the USA and programme in the UK? In North America they use
program for a group of related projects and for computer software. In UK, RSA, Australia, etc.
they use programme for a group of related projects, but program for computer software. I
shall use program for a group of related projects in this article.
What is a Project?The International Organisation for Standards (ISO) has a rigorous definition of
a project. A project is a unique process consisting of a set of co-ordinated and controlled
activities with start and finish dates, undertaken to achieve an objective conforming to specific
requirements including the constraints of time, cost and resources.
What is a Program?The PMI describes a program as: A group of related projects managed in a
coordinated way to obtain benefits and control not available from managing them individually.
Programs may include elements of related work outside the scope of the discrete projects in a
program (e.g. ongoing operations such as maintenance or research). Programs are a means of
achieving organisational objectives and realising benefits, often in the context of a strategic
What is a Portfolio?The PMI describes a portfolio as: The effective, centralized management
(including identifying, prioritizing, authorizing and controlling) of a collection of projects or
programs and other work that are grouped together to meet strategic business objectives. The
projects or programs of the portfolio may not necessarily be interdependent or directly related.
The term program / program management has come to mean different things to different
people. Some organizations and industries refer to ongoing or cyclical streams of operational or
functional work as programs e.g.
Maintenance program
Social responsibility program
National educational program
The disciplines of operational or functional management address the above type of work,
therefore this form of program is not considered in this article. This could be an area where the
concept of Management By Projects (MBP) is applicable.
True program management deals with specific, finite programs i.e. they have a predetermined
beginning and end for its group of component projects. For example:
Organisational restructuring program
Converting a national banks ATMs to Smart Card technology
Programs and projects can be executed under portfolio management. Examples are:
NASAs space program (portfolio)
Reconstruction & Development Program (RDP)
Some organizations refer to a large project with sub-projects as a program. The management of
large projects remains within the discipline of pure project management, and as such, is already
covered in the PMIs PMBOK

GuideFourth Edition. Examples of this are:
Traditional township development using separate consultants and contractors for town
planning, housing, roads, sewerage, electrification, etc.
Design and construction of a nuclear power station
If an endeavour is split into multiple, related projects with explicit management of the benefits
(e .g. optimising resource usage and benefits), then the effort becomes a program, and program
management is applicable to managing that effort. For example:
Township development using one consultant and main contractor for housing, roads,
sewerage, electrification, etc. who have been mandated to optimize design, share
resources, and use labour-based construction to impart skills to uplift the local population
Regional Transportation Upgrading Program with explicit management of the benefits
(e.g. adding commercial value, optimising resource usage and benefits)
It is important to know the difference between a project, program and portfolio because each
has a special role to play and needs to be managed differently.
Project, program and portfolio managers can now focus on the key success factors in their
appropriate field, thus enhancing the probability of successfully transforming their endeavours
from strategy to reality.
Terry Deacon is CEO of ProjectPro Management Services, an accredited provider of project and
program management training. The next program management course will be held in Gauteng.
See www.projectpro.co.za or call 012 346 6674 for details.