Many companies today are turning to establish a portfolio of projects. The focus of goals could be on improving production, Human Resources, Financial, or overall management. It is possible leadership of the organization may establish portfolios for each of these areas. The decision to have multiple portfolios may lie in Return on Investment (ROI) and/or Resource Availability.
According to the Project Management Institute (PMI®), project portfolio management is the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs, and operations.”
Program management is the management of different but related projects. When you have multiple projects connected to each other, you group them together and manage them as a whole “program”.
Programs are the top level of multiple projects and they set the guidelines for the execution of the projects. In past articles, we have talked about Scope, Change Management, Risk, etc. These areas apply to Program Management as well. In fact, these areas are a bit more robust as all projects in this program have to be managed by the guideline set. The interaction and effects of one project may and usually will impact the other projects.
We think a good way to demonstrate this would be to consider vehicles. Vehicles consist of a myriad of systems. Developing a new vehicle platform will require a variety of skills. The company developing will not be able to deliver a new vehicle, if the only thing that changes is the brake system. A new vehicle will require more than new brakes. Delivering a new vehicle will require changes to many systems and subsystems, for example, the suspension, the driveline, the interiors, all of these may be part of the new vehicle. There may be projects for each of the systems that are undergoing changes or introducing new products for these systems. To achieve the benefit from each of the individual projects will require coordination of those projects. This is a good example of program management.
For the company to maximize the return on the effort, delivering this new vehicle, will require the coordination of these projects. The above demonstration is but a simple incarnation of a program as the coordination effort is strictly based upon the projects required to produce the new vehicle. This is not always the case. Programs can have additional programs as well as other effort, for example company improvement efforts. The graphic below provides an example of a new vehicle program that consists of electrical, cab, drive line and chassis projects.
Any one of the projects will not deliver the vehicle. Program managers will be responsible for coordinating the individual projects in a way that will best meet the strategic goals of the organization. For example, consider the organization may want this vehicle platform to be low-cost variant, then the program manager will be required to balance competing project demands to ensure this target is met.
In the case of our new vehicle, the program manager will work with the project managers to ensure prototype parts built are suitable for specific vehicle prototype level. This can include the specific functionalities and performances required for vehicle iterations to maturity. Coupled with this content will be the availability of these prototype parts to make these vehicle builds possible and ensure depending on activities such as customer demonstration and vehicle testing are able to be conducted at the time required to meet the program and launch needs.
We are big proponents of project and product change control. Dealing with multiple projects producing multiple product or subsystems, this is especially important. From experience, it is quite easy for project costs and schedule to be severely impacted by changes in one project components in one subsystem are not coordinated with the other project system under development for this program. From a real-life experience, an automotive program, a change in a cab bulkhead, without notifying the wire harness project comes with severe rework, cost over-runs as well as schedule impacts that delays the program, which is for a new vehicle launch.
Program management is different than project management. Even if you hear these words occasionally interchanged (project managers sometimes referred to as program managers) by neophytes. Program Managers have great responsibility and need to understand the expected program strategic outputs, and coordinate the effort the projects and other actions that the company has put together to achieve that objective. The view of Program Management is at the 30,000-foot level. Rather than focus on the project execution details, the program manager is responsible for ensuring the result meets the organization expectations. They review the component projects status and providing guidance and help resolve conflict that may result between projects when and where required. The projects in a program can be very successful when well managed but can also be a line of dominos should something go wrong.