Portfolio and Program Management: Harmony or Conflict?

Andy Jordan, Vice President of the Project Management Association of Canada.

May 26, 2009

When I first started managing projects there were simply project managers. We knew what had to be delivered and we delivered it to the best of our abilities. Soon after, PMOs came along to add structure to the way that our projects were managed, to standardize processes and tools and to centralize reporting. After that, program management recognized that many projects were related and needed to be managed as parts of the whole--not just from an approach and tools standpoint, but effectively as one large scale initiative.

Now portfolio management builds on that to take a company-wide view of all the projects that are underway -- and to ensure that we leverage organizational resources to maximum efficiency regardless of their specific deliverables.

Lets try and look at ways that program and portfolio disciplines can successfully co-exist--and in fact complement one another for the overall gain of the organization.

Why we need Portfolio Management

Portfolio management is the closest that we get to a corporate view of our projects. In my mind, this level of management doesn’t concern itself with the details of any specific project; rather it looks at all projects in their entirety and considers how efficiently they are consuming corporate resources.

While every organization will focus on different things, I see portfolio management focusing on some or all of the following:

• Return on investment: Are we driving bottom-line benefits at a high enough level for the investment that we are making in projects (eg operational saving, revenue growth, market share expansion, etc)?
• Resource utilization: Are resources assigned to project work spending a high enough percentage of their time actively engaged on projects?
• Skills matching: Are the skills needed by our projects matched by the skills that exist within our organization? And more importantly, are we addressing the gaps that will show up in the next 6-12 months?
• Corporate alignment: Are the deliverables that our project portfolio will realize aligned with the strategic direction that the organization is headed in?

That’s very different than the program management view which is narrower and deeper than portfolio management.

How Portfolio and Program Management work together

There isn’t a conflict between the aims of program and portfolio management. But the concern in many organizations is that there are too many cooks involved: the project manager, program manager and portfolio manager (as well as potentially a project control function, a standards-based PMO, project finance, etc).

My argument is that if your organization is “treading on toes” across these functions, then there is something wrong with the level of focus that one or more of the roles have.

Consider for example the need to skills match:

Suppose you’re a Program Manager and need to obtain a C# developer for one of your projects. If you don’t have anyone in the organization who can code in C#, then you need to work with the project manager to ensure that you can bring in a contractor with those skills in time to complete the work.

A Portfolio Manager will take a wider view and will be looking for trends across all projects--if there are five different programs with a need for C# developers, maybe it’s time that the organization either hired a C# team or trained existing development resources on C# (and the hire vs. train decision will likely be driven by other resource utilization needs).

Leveraging the Portfolio Manager

• The Portfolio Managers can be useful supporters in identifying how your project or program contributes to the corporate objectives.

• They may well be able to give you a broader perspective than your sponsor, and as such can be a strong source of guidance in making decisions around project changes, determining approaches to issues, etc.

• Additionally, they can help you solve issues on projects and programs: they have the broadest perspective on whether those resources are available now or in future elsewhere across the various project teams.

• The Portfolio Managers can provide an additional source of leverage with stakeholders and sponsors. At worst, they can help you understand why the project may not be seen as a top priority at the moment--and whether that requires any changes to the project’s deliverables or timelines.

If done correctly, portfolio management complements program management. In fact, I would go further and suggest that the two roles are capable of working together to create synergy across the organization’s projects.

This article was originally published at GanttHead

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