Latest revision as of 11:05, 26 February 2021

Abstract

This is not a tool or a theory, more help to clarify the relationship of Projects, Programs and Portfolios. And helps to navigate the differences.

This wiki page will go into the description and distinctions between Project, Program and Portfolio. It will start with defining the three different topics, by using standards and recognized books on each of the three topics. Afterwards, the distinctions between the three will be clarified. The topics platforms and lineage will also be mentioned and clarified, due to the comparability between these two and the more well-known types. However, the main focus will be explaining the first three topics and the importance of knowing what kind, a manager is trying to manage. Through the reading on the page, an example will be followed so it will be possible to see a direct and hands-on use of the topics. Through the page reference to PRINCE2, Dansk Standard (DS) and books published by Project Management Institute will be used as background material to verify the statements. These books will also provide the key element for each of the topics which will be compared to each other to come up with the best and most clear way to navigate through these key differences. The page will also show how they differ by looking at how the topics handle; Scope, change, planning, management and success. The outcome from this wiki page will provide a clear and easy understanding of the difference in what a project, program and portfolio are.

[edit] Project

So for a start, the definitions of a project can be looked upon. There is a lot of different definitions of a project on this page that will focus on the acknowledged definitions from DS and PRINCE2.

"... a unique set of processes consisting of coordinated and controlled activities with start and end dates, performed to achieve project objectives. Achievement of the project objectives requires the provision of deliverables conforming to specific requirements.” - (ISO 21500:2012)^[1]

"A temporary organization that is created for the purpose of delivering one or more business products according to an agreed business case." - PRINCE2 ^[2]

So be looking at these two definitions it is clear to see the importance of understanding that a project is a temporary organization. This means that when the project has a lifecycle. This lifecycle can both be short and long depending on the project. So it can be said that a project is made to die. This part of a project is explained on the wiki page "The Project Charter" [[1]]. Thereby not said that a project can not have deliverables beyond the end of a project. Which mean that a done project can still have deliverables after the project is done.

Figure 1: Organizational State Transition via a Project. Figure 1.1 in "A guide to the project management body of knowledge" By Project Management Institute

After a project is done one of the things which are used to evaluate the project is, whether the project has been a success or not. This can be done in multiples ways by using different tools. One of the more known tools is "the Iron triangle"[[2]] but it also has its limitations and mentioned in this wiki page "Limitations of the iron triangle" [[3]]. Other tools can be used which can be seen on these wiki pages; [4],[[5]], [[6]].

[edit] Project Example

Throughout this wiki page, an example will be used to show what all the theory is talking about. The example will be looking at a car brand. Later on, the car brand will change to clarify understanding. If looking at the theory used in the project part it can be compared to how car brands make new cars. A whole new car is a project for a car brand. When brands start the project they do not necessarily have an end date for the overall project. But they have a start date and an end goal, a brand new car. As DS mentioned "a unique set of processes consisting of coordinated and controlled activities with start and end dates" here it can be compared to, the designers who need to design a new car and the mechanic who needs to build a new motor. At the end of the project, all of these activities will be combined and the result will hopefully be a new car. So by finishing this project the business values in the organisation will be changed due to a new car will be introduced to the market. Whether the project in itself is a success or not can then be looked at with different tools.

[edit] Program

Now looking at a program. Once again the definition of a program will be obtained by comparing acknowledged well-known writing.

"A programme is generally a group of related projects and other activities aligned with strategic goals." - (ISO 21500:2012)

"A temporary, flexible organization structure created to coordinate, direct and oversee the implementation of a set of related projects and activities to deliver outcomes and benefits related to the organization's strategic objectives. A programme is likely to have a life that spans several years." - PRINCE2

".. 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 of the discrete scope of projects in the program." - Project Management Institute

Figure 2: Illustration of a program.

So by looking at these three definitions it can be seen a program is a group of projects which have the same strategic goals. It is also worth mentioning that the lifetime of a program can be for several years. It makes sense since the program is a group of projects. A good way to explain the key difference between a project and a program is: If you have a project, and remove one of the activists, the project will most likely be a failure, and thereby not deliver the benefit to the organization. But if you have a program and remove one of the projects, the program can still be beneficial for an organization. The figure, which is shown to the right, is an illustration of a program that has five projects in it. It is seeing the length of the project is different and none of the projects is depending on each other. When the DS is talking about other activities it is things like controlling the economy of the program.

Also, the program can be evaluated on the success. The program's success is measured by the programs ability to deliver its intended benefits to an organization. So the way to measure the success of the program can in a way be compared to the way of doing it in projects. But in a program, the outcome and the benefit is much more important than in a project. A program is a comment element of a portfolio, which will be defined in the next sections.

There is several wiki page on how to manage programs in different ways [[7]][[8]]. There is also different books how you can to manage programs, eg "The standard for program management" by the Project Management Institute.

[edit] Program Example

An example of a program could be looking at a car brand once again. When a car brand makes a new car, they are most likely making differents models of one car. When you see eg. the Peugeot 208 series, they have different types. This man is compared to a program. They all share the same strategic goal, to make a medium car, but they do still have it in both petrol and diesel type. Here it is often seen the cares have different types of motors and gears. This is a very good example of the above theory. When thinking at the overall benefit of makings these cars, most likely make a profit. Would it be possible to obtain a profit without one of the types of cares? Yes. Here a comparison with a project can be done. By seeing if you can remove one of the elements from a car, and still have the benefit, profit. Would it be possible to remove eg. the motor and still sell the car? No. So here it can be seen that in the program an element can be removed and still obtain the benefit, but it is more difficult in a project.

[edit] Portfolio

"A project portfolio is generally a collection of project and programmes and other work that are grouped together to facilitate the effective management of that work to meet strategic" - (ISO 21500:2012)

"The totality of an organization's investment (or segment thereof) in the changes required to achieve its strategic objectives." - PRINCE2

Figure 3: Illustration of a portfolio.

When looking at these definitions it can be difficult to see how a portfolio differ from a program. These two definitions fail to mention that the activists within the portfolio may be related or unrelated, may be independent or interdependent, and may have related or unrelated objectives. This is the big difference between a program and a portfolio. This means that the programs or projects within a portfolio may not be directly related or interdependent, they are linked to the organization’s strategic plan using the portfolio. An illustration of a portfolio is shown in figure 3, to the right. Here is can be seen that the different program and project is not related but is still in the same organization, here shown as a green cloud. Like project and program, a portfolio does also have a lifecycle. One main difference here is that a project and a program have a more limited duration, the portfolios do often have greater longevity and management attention. The closure of a portfolio can occur then it is no longer required eg. when the portfolio’s components are decommissioned or moved to another portfolio. The life cycle of a portfolio often mentioned as ongoing processes and functions that occur to a set of portfolios, programs, projects, and operations within a continuous time frame. For an organization can remain competitive and financially stable the portfolio lifecycle needs to be adaptive and flexible to constantly change needs from all influences, internal and external.

When looking at an organization they most likely have more than one portfolio, depending on the size of the company. Each of these portfolios will be addressing unique or different organizational strategies, goals, business, functional and objectives. The size of portfolios can also vary, some portfolios do maybe only have one program and three projects, others have five programs and teen projects. The larger portfolios may contain subsidiary portfolios and are usually structured as a hierarchy. Common project portfolios include product lines, information technology portfolios, enterprise project portfolios, and others.

Also, a portfolio can be evaluated on success. A portfolio success critical can be found in the portfolio concept box[[9]], here some of the pages are "Best Practices for Project Portfolio Selection[[10]], Project Evaluation and Selection for the Formation of the Optimal Portfolio [[11]] and Application of Balanced Scorecard in Portfolio Management [[12]]

[edit] Portfolio Example

If staying in the car world. One often sees an organization often have a vary of portfolio and projects. If looking at the big car companies, they often own more than more car brand. Here the difference car brand can bee considered a portfolio. So if looking at eg. Volkswagen Group, they have 12 different car brands^[4]. Hereunder the car brands as Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda Auto, MAN, Scania, Volkswagen and is also part owner of Suzuki Motor Corporation. When seeing this an comparing it to a portfolio. One can say that the differences brand is a portfolio exiting of different types of cars. When looking at eg. Audi, they have A1, A2, A4, Q2, Q7 etc. Here the types of car are not related other than the overall strategic, making a profit for Audi. Looking to compare an Audi Q7 series and the A3 series, the only thing they have in common it the logo in front of the car. So here a clear example of a portfolio can be seen.

[edit] Others types of multi-project management models

When talking about multi-project management the two must comment ones are these to the above-mentioned method, program and portfolio. But there are also other constellations one man organize project. Here two other ways to do it will be shortly introduced. The two is Platforms and Lineage.

Figure 4: Illustration of a Platform.

[edit] Platforms

The way the platforms handle multi-projects is to use some of the same things in a different project. It is considered one of the most ambiguous terms in tech. Platforms can be seen in contrast to products. A product is building something to ship to customers, a platform is building a place where other builders or creators can build things to ship to customers. By using product and process commonalities the cost for a project will be reduced. Here an example could once again be in the car world. It is often seen that a car brand use the same undercarriage for different cars. This way they safe money by not using the time to design a new one and exploit the scale of production.

[edit] Platforms Example

When Volkswagen Group wants to make a new car, then they could have the design of an undercarriage the car should use. Then when Audi will make a project, "make a new car" they can use the undercarriage. The same one will then also be used in SEAT and Škoda. Then the difference project at the different car brands will safe the money, going into making this. And this is actually the case here. The Audi A3, SEAT Leon, Škoda Fabia and Volkswagen Golf are all four made on the same undercarriage, some of them also share motors which is very alike.

[edit] Lineage

Figure 5: Illustration of Lineage.

Lineage is a new way on how to create a completely new business, based on managing a project sequence ^[5]. The project lineage management is a way to expand the initial move into a diversified range of products and a multi-continent deployment while keeping the key specificities of the pilot project. Typically, different generations of product innovation are developed, and profitability may arise during such a sequel. This way of doing the project has been used a lot by Apple, both to make the iPod, iPhone, and iPad ^[6]The main idea of doing projects this may is to keep the key specificities. This way of doing projects is often used in an innovative organisation due to the learning efficiency is extremely good.

[edit] Lineage Example

As mentioned before, Apple uses this kind of management. So the example will take "place" in apple. If one has heard interviews with founder and former CEO Steve Jobs[13]. He is telling about how the goal of the iPhone to make a touch screen that could easily be used, and the screen should be the entire front of the phone. Here it is clear that Jobs had a clear goal for what he wanted to be done. The pathway to do it was in a way formed; first, develop a good touch screen, two make it possible for the screen to fill the entire front. Here it can be seen the first project has to be done before the second can start. Here the knowledge of the touch screen will be exploited in the second project.

[edit] Summary

To make a summary of the relationship of projects, programs and portfolios. It can be said that portfolios consist of programs and project which is not necessarily related to each other but they are managed as a group to achieve strategic objectives. Where a program is a group of projects. And finely a project is a temporary endeavour undertaken to create a unique product, service, or result.

A good and clear way to compere this three topics is to compare how they differ in a managing way. The "Project Management Institute" has made a table in some of their standards which explain it very well. The most important takeouts will be presented here below.

[edit] Limitations

Figure 4: Picture illustrating tools used in a wrong way. Picture taken of https://qablog.practitest.com/being-wrong-is-actually-great/.

Once again this page is not a tool nor a theory, but help to clarify the relationship of Project, Programs and Portfolios. This page can help to navigate what type you are managing, and that way help you in the right toolbox for Project[[14]], Program[[15]] and Portfolio[[16]].

When looking at the way to navigate in what kind of management one is supposed to use, one can quickly be locked to only the most common way of handling a project. Yes, there are many tools for the different types of managers, if one chooses to do it in these more traditional ways. These tools can be good if the manager is using the tool in the right way. The tool will be disturbing for the project/program/portfolio if the tool is used the wrong way. Therefore it can be important for the manager to known which toolbox to look in.

The manager also has to remember that maybe the traditional way is not the best way to do precisely what you want to do. Eg does Midler, C., & Silberzahn, P. (2008) describes a very successful example of using Lineage^[7] which was a new way to use projects. Also if looking at the example from the Lineage section, it can be seen that apple, did use a "new" way of doing the projects. The company Apple inc. will most likely be considered a success. This shows that doing it in a more distributed way can also be good. Thereby not said one should ignore these more known topics.

[edit] Annotated bibliography

As mentioned on the wiki page, difference material is used to provide a clear view of these topics. The three key references are DS, PRINCE2 and standards from Project Management Institute.

Why use these three different references?

DS - ISO 21500 is a danish standard developed to make a clear with on how to manage projects. This standard does provide a clear view of how to manage a project. The DS does also briefly mentions program and portfolio. But the main focus is project management.

PRINCE2 is one of the most widely used methods for managing projects in the world. It is a structured project management method based on experience drawn from thousands of projects and from the contributions of countless project sponsors, project managers, project teams, academics, trainers and consultants. The key reason to use the PRINCE2 is to use a cross-reference to the DS. This is done due to it is designed to be generic so that it can be applied to any project regardless of project scale, type, organization, geography or culture. This way the page is not only telling about how the nordic way of doing projects.

The last key reference is some of the standards published by the Project Management Institute. Here the A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE^[8] , Standard for Program management six editions and Standard for Portfolio management six editions.

[edit] References

1. ↑ ISO21500. 2012. Guidance on Project Management. International Organization for Standardization.
2. ↑ PRINCE2 (PRojects IN Controlled Environments)
3. ↑ A guide to the project management body of knowledge (PMBOK guide) / Project Management Institute. six edtion
4. ↑ Volkswagens homepage, showing the 12 car brands https://www.volkswagenag.com/en/brands-and-models.html
5. ↑ Midler, C. (2013). Implementing a Low-End Disruption Strategy Through Multi-project Lineage Management: The Logan Case. Project Management Journal, 44(5), 24-35.
6. ↑ Kock, A., & Gemünden, H. G. (2019). Project Lineage Management and Project Portfolio Success. Project Management Journal, 50(5), 587–601.. [. https://doi.org/10.1177/8756972819870357]
7. ↑ Midler, C., & Silberzahn, P. (2008). Managing the robust development process for high-tech startups through multi-project learning: The case of two European start-ups. International Journal of Project Management, 26(5), 479-486.
8. ↑ A guide to the project management body of knowledge (PMBOK guide) / Project Management Institute. PMBOK guide. Description: Sixth edition