Portfolios and programs

Why it matters

As you move up, the questions you are asked change. A project lead asks "how do we deliver this project well?". A program manager asks "how do these related projects together deliver the benefit we want?". A portfolio manager asks "out of everything we could do, which projects and programs should we fund at all?". Understanding these levels helps you see why decisions above you are made, talk to senior leaders in their terms, and plan your own career. You will also almost certainly work with a project management office (PMO), so it helps to know what kinds exist.

Three levels

Project. A temporary effort to create a specific product, service or result. It has a defined scope, schedule and budget. Success = delivering the outputs to agreed quality, on time and on budget.

Program. A group of related projects (and sometimes ongoing activities) managed together because coordinating them delivers benefits that would not be achieved by managing them separately. A program usually lasts longer than any one project, and success is measured in benefits and outcomes, not just outputs.

Portfolio. A collection of projects, programs and operational work managed together to achieve strategic objectives. The items do not have to be related. Portfolio management is about selection and balance: choosing what to fund, setting priorities, and stopping work that no longer fits the strategy.

Worked example: Northside Clinics

Suppose Northside's leadership has a strategy goal: "Make it easy for patients to reach us digitally."

• The booking portal is one project.
• Northside also runs a patient messaging project, a telehealth video project and a website redesign. All share the same patient sign-in, the same records integration and the same clinic staff for training. Managed separately, they would each build their own sign-in, train staff four times and compete for the integration team. Managed together as a Digital Access program, they share components, sequence training once and measure combined benefits (for example the share of patient contacts that happen online).
• Northside's portfolio includes the Digital Access program, but also a finance system upgrade, a building refurbishment and the day-to-day running of IT. The portfolio board decides how to split this year's budget between them. When money is tight, it might delay the website redesign to fund a mandatory security upgrade.

Program management in practice

Program managers spend their time on:

• Benefits management: defining the benefits, who owns them, and how they will be measured after projects close.
• Dependencies and shared resources between projects.
• Roadmaps that sequence projects so that early ones enable later ones.
• Program-level governance and risk, including risks no single project owns.
• Stakeholders and change at an organisational level, for example changing how clinic staff work across all the projects.

Portfolio management in practice

Portfolio managers and boards:

• Score proposals against strategy, value, risk and capacity.
• Balance the portfolio: quick wins and long-term bets, mandatory compliance work and growth.
• Review performance and reallocate money and people, including stopping projects.
• Make capacity visible: there are only so many people who can work on integration at once.

What a PMO does

A project management office is a group that supports or oversees project work. PMI's material describes three broad types:

• Supportive: provides templates, training and advice. Low control.
• Controlling: requires the use of certain methods, templates and reporting, and checks compliance. Moderate control.
• Directive: directly manages projects; project managers report to it. High control.

Some organisations have an enterprise PMO or a portfolio office supporting the portfolio board. As a project lead, the PMO is often where your status reports go, where your business case is reviewed, and a good source of templates and lessons from past projects.

Common mistakes

• Calling any big project a "program". If there is no shared benefit to coordinate, it is a large project.
• Program managers acting as "super project managers" and micromanaging each project instead of managing benefits and dependencies.
• Portfolios that only ever add work and never stop anything.
• Treating the PMO as a reporting bureaucracy rather than a source of support.

Quick recap

• Project: delivers outputs. Program: coordinates related projects for combined benefits. Portfolio: selects and balances work to meet strategy.
• Programs are judged on benefits; portfolios on strategic return and fit.
• PMOs range from supportive to controlling to directive.

Try it

Open the Do tab and test yourself on projects, programs, portfolios and PMOs.