Introduction

 

Presently, there is a dearth of literature on the concept of program management, while abundant literature is available on the concept of project management and to a lesser extent portfolio management. In industries, the concept of program management is not uniformly established. In some organizations, programs are so loosely defined that the distinction between program and portfolio are largely lost. Worse, in other sectors such as government and defense, a “program” is the word of choice even though in most of these cases, programs are just projects. For example, in 2016 the United States government passed the Program Management Improvement Accountability Act (PMIAA), but the detail reveals that most of the focus is on project management, with some elements of program and portfolio management.

 

Note: For a more concise version of the article, visit https://www.pmoadvisory.com/blog/what-are-programs/.

 

A deep understanding of program management is vitally important for three reasons: 1) In order to advance any field, it is important to define it appropriately. 2) Program management is becoming more important as organizations tackle larger and more complex initiatives, requiring this new management discipline to tightly manage the integrated efforts. 3) Program management is the next logical step in the evolution of project management as well as the natural advance of project professionals beyond managing projects.  This goal of this article is to provide a more specific definition of program and also highlight the distinction between program and project management primarily and with portfolio management secondarily.

 

 

Definition of Program, Project, and Portfolio

 

Project management focuses on the attainment of pre-defined outcomes. PMI defines project as “a temporary endeavor undertaken to create a unique product, service, or results.” (PMI Lexicon, 2020)  The scope entails specific project details and requirements that need to be fulfilled. A program is defined as a logical group of “related projects, subsidiary programs, and program activities managed in a coordinated manner to obtain benefits not available from managing them individually.” (PMI Lexicon, 2020)  But the concept of “related” is not explained, other than some nebulous intent of “obtaining benefits not available from managing them individually.”  Then how is this concept so different from a portfolio? PMI defines portfolio as “projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.” (PMI Lexicon, 2020). Examining the meaning behind these words, the definitions of program and portfolio are remarkably similar. After all, programs and projects are both mechanisms to achieve strategic objectives.

 

These ambiguous definitions of programs and portfolios can cause significant headaches for organizations attempting to implement program management?  Are programs just large projects OR are programs a portfolio of strategically related projects?  Worse, for program management professionals, this confusion can lead them toward wrong paths, especially when they establish and lead programs or prepare for the Project Management Institute’s Program Management Professional (PgMP) certification. This is why in a recent book, Brian Williamson and I defined a program as “a collection of highly related components, such as sub-programs, projects, and other activities. When these highly related components are managed as a program, they can achieve great value and benefits not possible if they were managed separately.” (Williamson and Wu, 2019) 

 

Here I like to distinguish different types of programs, specifically between a “loosely defined program,” which PMI’s definition would suffice, versus a “tightly integrated program” in which the relatedness is defined by dependencies of achieving the program’s strategic objectives.” Here, I like to introduce the concept of program centrality. Program centrality is a measurement of the “tightness” of the components within a program, and it includes three important factors: relatedness, timeliness and commonality of objectives. These three factors are explained later in this paper.

 

Range of Program Types

 

In contemporary business, there is a range of program types as illustrated in Figure 1, from the very tightly integrated programs to more loosely defined programs. Tightly integrated program management concentrates on the collaborative management of two or more projects in which their objectives are highly dependent to achieve long-term benefits and strategic objectives. As such, the failure of one project within the program can detrimentally affect the overall program success. Here are two examples of tightly integrated programs: 1) Creating a new business capability or business function requires a combination of projects such as hiring and training new people, building business processes, and implementing information technology systems. 2) Enterprise Resource Planning (ERP) implementations are typically managed as programs as these endeavors require extensive process redesign, system implementation, adoption projects to manage organizational change, and extensive training of both internal and external stakeholders. In these examples, the failure of one project will probably result in the overall program failure.

 

On the other end, loosely defined programs will probably include projects whose scope is not dependent on other projects; they are essentially different projects bound in a program (Weaver, 2010). For example, a program of website upgrade projects in which the specific upgrades have little dependencies are arbitrarily bundled in a program because there are shared resources. The failure of one of these projects impacts another project only minimally, even though collectively they serve the same strategic objectives.

 

Naturally, toward the middle of the spectrum, there are programs that require some integrated management but the goals are not as intertwined as a tightly integrated program. For example, companies may create a program to build and introduce a new product, and this program has four projects for new product development, supply chain management, manufacturing scale-up, and marketing activities. The tightness of project successes and their contribution toward the program performance is less than the earlier example of ERP implementation but much more than the website program. Note: For those who preparing for the PgMP exam, stay focus only on “tightly integrated program” as you prepare for the exam and the application.

 

Figure 1: Spectrum of Program Centrality

 

Key Differences between Program and Portfolio Management

 

Unlike programs, portfolios are aligned with strategic objectives and as such a portfolio can have components whose relatedness are only the broad strategic aims. Programs have much narrower focus as they exhibit a greater centrality of purpose. The concept of program centrality is composed of the following three factors. Specifically:

1. Relatedness – This factor refers to the interconnection of components such as projects and other activities within the portfolios and programs.
2. Timeliness – This factor refers to the concerted effort and contiguous timeframe of implementation of the components within the portfolios and programs.
3. Centrality of Objectives – This factor refers to the how tightly integrated are the component’s objectives and their contribution toward the overall portfolio or program objectives.

The table below compares program versus portfolio across these three factors:

 

Concept	Portfolio	Program
Relatedness	The work included is related in any way that the portfolio owner chooses. This is typically grouped by same resource pool, work delivered to the same client, work conducted in the same accounting period, or they fit in a similar strategic group.	The work included is interdependent such that achieving the full intended benefits of the program is dependent on the delivery of all the program components as defined in the scope of the program.
	The work may span a variety of diverse initiatives, and these initiatives are largely independent.	The work is all interrelated to achieve a specific benefit.
Timeliness	Are reviewed regularly for decision-making purposes but are not expected to be constrained to end on a specific date. Portfolios have life cycles, but they can be very long duration sometimes spanning across decades. Portfolios can be altered, ended, or merged with other portfolios based on business environment changes.	Temporary and includes the concept of time as an aspect of work. There is an existence on a clearly defined beginning, a future endpoint, and a set of defined benefits to be achieved.
Centrality of Objective(s)	Loosely connected strategic objectives, often clustered in a common strategic group such as product families, business functional groups (e.g. IT portfolio), shared organizational objectives (e.g. revenue generation).	Tighter related organizational objectives, often so tightly intertwined that the failure of one program component jeopardizes the entire program objective.

 

For all these factors, loosely defined programs and portfolios are more similar than different, contributing to a state of confusion with many practitioners and researchers. I believe programs should only include the moderately to tightly integrated programs (right side of Figure 1). This is especially important for program professionals to set apart from project managers and reduce the overall ambiguity.

 

Key Differences between Program and Project Management

 

Examining the differences between programs and projects, there are four key factors of distinction:

1. Uncertainty – This factor is related to risks and unknown throughout the life cycle.
2. Change – This factor describes the dynamism and fluctuations confronted by the underlying endeavor.
3. Methodology – This factor refers to the adoption of a particular approach and system of implementing projects and programs.
4. Complexity – This factor focuses on the intricacies of projects and programs involving ambiguity, unpredictable system and human behaviors.

 

Factor	Project	Program
Uncertainty	The expected outputs of projects are generally more certain than those of programs at the time of inception.	Uncertainty is high at the beginning of a program as the outcomes are not clear.
	As a project proceeds, its ability to deliver on those outputs on time, on budget, and on scope becomes more certain as a result of progressive elaboration.	Programs can change the direction on projects such as canceling projects, starting new projects, or modifying existing components – to adapt to changing circumstances.
	Projects may produce outputs, products or services as planned.	In programs, the outcomes of projects may not contribute to the outcomes that were anticipated. Some outputs may have little value on its own.
Change	Change within a project affects the defined deliverables at the tactical level	Changes within a program affect the delivery of benefits at the strategic level
	Employ change and change management to constraint or control the impact of variability on their baselines.	Proactively use change management to keep the program components and intended benefits aligned with changes in organizational strategy and changes in the environment in which they are performed
Methodology	Projects largely utilizes one methodology or approach for implementation (e.g. traditional waterfall, SCRUM, Lean, etc.)	Programs can utilize a variety of methodologies, depending on the optimal method of component execution and organizational culture. But having multiple methods of implementation incur an additional source of complexity on the program. Nonetheless, the gains offered by flexibility should offset additional management complexity.
Complexity	Complexity due to the uniqueness of projects. It can include the kind of thinking, action, and knowledge required to solve a problem or work on a complex task.	Governance complexity results from the sponsor support for the program and the decision-making processes within the program.
	Organizational complexity focuses on the depth of the organization structure as well as the number of organizational units	Stakeholder complexity arises from the differences in needs and influence of stakeholders.
	Dynamic complexity focuses on the project’s behavior and how it changes over time.	Definition complexity focuses on the agreement of future state by stakeholders.
		Benefits delivery complexity focuses on benefit management.
		Interdependencies among components and not necessarily on issues within individual projects
		Resource complexity is another source of friction.
		Scope complexity arises from the difficulty of clearly defining the deliverables and the benefits of the programs and its components.
		Change complexity arises from the impact change can potentially cause organizational issues.
		Risk complexity arises from a high level of uncertainty due to the extended program life cycle.

 

One common source of confusion that often exists in both the research and the practitioner world is the distinction between program management and project management of very large projects. Realistically, when both are managed well with robust processes and procedures, the differences are a matter of degree than true substance. Possibly, the only true distinction is that program management focuses on the “supra-project” activities as well as “inter-project” supervision while project management concentrates on the “intra-project” activities and tasks.

 

Additional Features of Program Management

 

Longer-Term Orientation and Strategic Goals

Program management aims for the accomplishment of goals synergized into program benefits. A program can have many combinations of projects and other activities to achieve its business objectives. Program managers can sometimes place projects in the different arrangement and define activities with distinct outcomes to achieve strategically important benefits. Program managers must state goals because not all the goals are associated with a single working area. This differs from projects in which project managers are more directly managing project deliverables. In addition, as programs are much larger collection of work requiring significant investments, organizations do not undertake programs lightly and often necessitates a close alignment of program and strategic goals of the sponsoring organization. Due to the much broader scope of work, strategic options of how to realize program benefits, programs can take much longer time to implement.

 

Resource Allocation

With the broader scope, program managers often allocate resources to the various projects and other components within the program. This differs considerably with project managers whose primary job is to make the best use of the allocated resources. To make appropriate program resource decisions, program managers must understand the total resource needs of the program, determine the capability and capacity of the performing organizations, develop resources strategies to fill gaps, work with the component managers in the allocation of the resources, and occasionally adjust resources throughout the program life cycle to optimize the program performance by reallocating resources if needed. Hence, program managers are often negotiating resources among the components as compared with project management.

 

Measurement of Success

How to measure success? In project, the primary focus is the tangible outcome or deliverables. Success metrics for project management are often processes oriented including the ability to deliver agreed scope, on schedule and budget, and at the right quality. For programs, the success metrics are more strategic such as the desired business benefits and the fitness of the outcome. Program management metrics are often beyond the common project management metrics and include the ability to make sound decisions, alignment with strategy, and engagement of key stakeholders. At the portfolio level, the success metrics are closely gained with business and organization metrics and key performance indicators.

On the flip side, the failure of projects, programs, and portfolios can be vastly different. Project failures can be painful, but they rarely threaten the existence of organization. Program failures can be catastrophic and even at a minimum, the resulting pain can be long lasting. At the portfolio level, failure of portfolios generally negatively impact an entire area of the business if not the business itself.

 

Conclusion

Program management is the next logical step in the evolution of project management (Waddell, 2005). A simple conclusion is that programs are different from large projects because they are goal-oriented rather than more focused on deliverables. As organizations confront greater competition and external forces, the ability to deliver large-scale endeavors and achieve substantial benefits becomes more important. In addition to enhancing the likelihood of success, program management can also achieve significant synergy among the components within the program than managing them individually. This synergy can translate to significant savings and improving organizational competitive. As organizations confront larger and more complex endeavors, the time for program management is now.

 

References

 

PMI Lexicon of Project Management Terms (Lexicon, 2020). Project Management Institute, version 3.2. Retrieved from https://www.pmi.org/pmbok-guide-standards/lexicon.

Waddell, D. (2005). Program Management: The next step in the evolution of project management. Problems and Perspectives in Management (3), 160-169. Retrieved from https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/740/PPM_EN_2005_03_Waddell.pdf.

Weaver, P. (2010). Understanding programs and projects—oh, there’s a difference! Paper presented at PMI® Global Congress 2010—Asia Pacific, Melbourne, Victoria, Australia. Newtown Square, PA: Project Management Institute. Retrieved from https://www.pmi.org/learning/library/understanding-difference-programs-versus-projects-6896

Williamson, B. and Wu, T. 2019. The Sensible Guide to Key Terminologies in Project Management, iExperi Press, Montclair, NJ. Glossary.

 

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