Date: 01/06/2019

Prepared by: Majed Abdeen

Many Project Managers are actually managing programs or portfolios rather than just projects. When thinking about programs or portfolios as not just large projects, and when we look at the common definitions of all of these structures, we can realize that some projects we already managed before are programs or portfolios. An example to this notion is a GIS system. The common GIS components are (hardware, software, people, methods and data). We can think about managing all of these components as a program, since these components are related projects in order to achieve specific benefits. From this perspective, when we look at some projects we've managed before, we can find that in some projects we were actually program managers or portfolio managers. Therefore, it is critical that organisations (and Project Managers) are able to understand and recognise the differences between projects, programs, portfolios, and mega-projects, as they each require different management approaches to deliver success.

Introduction

Project Managers must understand the differences between projects, Mega-projects, programs, and portfolios, as each requires differing management approaches, skills, and organisational structures in order to achieve success. Importantly, in the literature, there is not always agreement regarding the exact definitions for each concept; for example, Program Management is defined as management of multiple projects, although there is disagreement whether these projects must deliver organisational change or not (Vereecke et al., 2003, p. 1279). However, it is generally recognised that there is an increase in scale, from projects and Mega-projects through to programs and portfolios.

Projects

Projects are defined as temporary endeavours which create unique outputs (PMI, 2017a, p. 4). They have defined durations and specific objectives, with a single point of responsibility in the Project Manager, and are usually focused on delivering organisational-change or a specific asset (Pellegrinelli, 1997, p. 142). Scope may be defined or progressively elaborated through the project lifecycle, and success is based on delivery on Triple-constraints (PMI, 2017a, p. 13). Projects are therefore smaller-scale than Mega-projects, programs or portfolios, and their objectives are formed differently. Project Managers require specific personal and team management skills to lead and support their teams in order to deliver the project successfully.

Mega-projects

Mega-projects are large-scale, costing billions, affecting more than 1 million people, and usually running for several years (PMI, 2017a, p. 11). As a result, they are significantly more complex than projects, thus managers of Mega-projects must deal with significant challenges related to delivering benefits, budgets, and schedules (Zhai et al., 2009, p. 100). In comparison to projects, Mega-projects fail more often, and more significantly due to their size (Mullaly, 2012), thus Project Management is more critical, and Project Managers' communication skills are critical due to the greater number and variety of stakeholders involved (Zhai et al., 2009, pp. 101-102). Mega-projects require unique management approaches to ensure value delivery and achievement of objectives (Zhai et al., 2009, p. 108). Importantly, while Mega-projects may have sub-projects involved, they are neither programs nor portfolios, as, like projects, they seek to deliver a unique result through defined objectives and scope.

Programs

Organisations form programs as they note that the projects, they are undertaking are related through their goals and benefits they seek to achieve (PMI, 2017b, p. 7). The APM notes that organisations choose to manage these projects together as it will provide benefits which are not available if the projects were to be managed separately (Pellegrinelli, 2011, p. 233). This allows the programs to adapt to change to ensure successful and efficient benefits for organisations (PMI, 2017a, p. 13) and provide optimal advantages through doing so (Buuren et al., 2010, p. 675). The program scope, schedule, budget, and goals are comprised of those of each component, thus in contrast to projects, programs may not have a single defined deliverable or a fixed time limit (Pellegrinelli, 1997, p. 145) since they facilitate delivery of project objectives but do not deliver objectives themselves (Lycett et al., 2004, p. 290). Portfolio Management requires specific skills beyond simply Project Management; Program Managers coordinate Project Managers (Pellegrinelli, 1997, pp. 141-142). In contrast to projects, risk management focusses on the strategic level, while resources are managed across projects, and Project Managers are not closely involved in benefits management for their projects (Lycett et al., 2004, p. 293).

Portfolios

Defined as a collection of projects and programs, portfolios are managed in order to achieve the organisation's strategic objectives; their scope changes in line with these, and success is measured based on benefits realisation and portfolio performance (PMI, 2013, p. 13). Components may/may not be related, interdependent, or have related objectives (PMI, 2017c, p. 3). Beringer identifies four portfolio success dimensions (efficiency, synergies, strategic fit, and balance), which highlight the strategic perspective of portfolios, in contrast to that of programs, projects, or Mega-projects (Beringer et al., 2012, pp. 4-5). Thus, Portfolio Managers must focus on structuring portfolios appropriately in line with organisational strategy, managing resources across the portfolio, and portfolio steering to maintain alignment (Beringer et al., 2012, pp. 5-6).

Conclusion

In summary, management of projects, Mega-projects and programs focusses on managing and undertaking activities in the most effective and beneficial way; in contrast, Portfolio Management focusses on undertaking the correct programs to deliver maximum benefit (PMI, 2017a, p. 12). While management of each is aligned with or determined by organisational strategies, it differs in the way management of each contributes to achieving organisational goals (PMI, 2013, pp. 6-7). Thus, organisations and Project Managers must recognise the contrasts between projects, Mega-projects, programs and portfolios. OPM can support organisations to manage each of these successfully to deliver enhanced performance, and results through continuously improving management practices (PMI, 2013, pp. 6,19).

References

Beringer, C., Jonas, D., Gemünden & Georg, H., 2012. Establishing project portfolio management: an exploratory analysis of the influence of internal stakeholders' interactions. Project Management Journal, 43(6), pp. 16-32.

Buuren, A. v., Buijs, J.-M. & Teisman, G., 2010. Program management and the creative art of coopetition: Dealing with potential tensions and synergies between spatial development projects. International Journal of Project Management, 28(1), p. 672–682.

Lycett, M., Rassau, A. & Danson, J., 2004. Program management: a critical review. International Journal of Project Management, 22(1), p. 289–299.

Mullaly, M., 2012. Mega projects: How Different Are They, Really?. [Online]

Available at: https://www.projectmanagement.com/articles/274071/Mega projects--How-Different-Are-They--Really-

[Accessed June 2019].

Pellegrinelli, S., 1997. Program management: organising project-based change. International Journal of Project Management, 15(3), pp. 141-149.

Pellegrinelli, S., 2011. What’s in a name: Project or program?. International Journal of Project Management, 29(1), p. 232–240.

PMI, 2013. Organizational project management maturity model (OPM3). 3rd ed. Newtown Square, Pennsylvania: Project Management Institute, Inc.

PMI, 2017a. A Guide to the Project Management Body of Knowledge. 6th ed. Pennsylvania: Project Management Institute, Inc.

PMI, 2017b. The Standard for Program Management. 4th ed. Newtown Square(Pennsylvania): Project Management Institute, Inc.

PMI, 2017c. The Standard for Portfolio Management. 4th ed. Newtown Square, Pennsylvania: Project Management Institute, Inc.

Vereecke, A., Pandelaere, E., Deschoolmeester, D. & Stevens, M., 2003. A classification of development programs and its consequences for program management. International Journal of Operations & Production Management, 23(10), pp. 1279-1290.

Zhai, L., Xin, Y. & Cheng, C., 2009. Understanding the Value of Project Management From a Stakeholder’s Perspective: Case Study of Mega project Management. Project Management Journal, 40(1), pp. 99-109.