Difference Between Project Program & Portfolio Management

You can easily grasp the difference between project, program, and portfolio by looking at their definitions and understanding the main keywords.

A project is a temporary endeavor undertaken to create a unique product, service, or result.

A program comprises of related projects that are managed in a coordinated manner to obtain benefits, which are not available from managing them individually.

A portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.

A project is a self contained unit. Its main keywords are ‘temporary’ and ‘unique’.

A program is a group of related projects that are managed in a coordinated manner. Its main keywords are ‘related’ and ‘coordination’.

A portfolio is a collection of many things. Its main keywords are ‘collection’ and ‘strategic objectives’.

A portfolio is distinct from the program because it has a collection of many things, which may or may not have any relation between them.

Let us look at project vs program vs portfolio management in more detail with the help of examples and diagrams.

In this post, you will find the comparison between these terms from an Organizational Management perspective. In addition, you will also find a brief explanation of roles of Project, Program and Portfolio Mangers.

You can also look at the following video to understand the difference.

Project Management: Definition, Diagram & Example

A project is a temporary endeavor undertaken to create a unique product, service, or result.

PMBOK Guide

You can also refer to Max Wideman Glossary to read some other standard definitions of Project.

Here is an example of a project – To attain the PMP certification in the next two months. This is unique because you will do it only once in your life and it is temporary because you have set a timeline for yourself.

Project Management simply means application of knowledge, skills, tools & techniques to meet the project requirements. It includes, among many other things, balancing the constraints in a project. These constraints include, but are not limited to, Scope, Time, Cost, Quality, Risk, and Resources.

You can also look at the following video to understand what projects are.

Program Management: Definition, Diagram & Example

A program is a group of related projects, subsidiary programs, and program activities that are managed in a coordinated manner to obtain benefits not available from managing them individually.

PMBOK Guide

You can also refer to Max Wideman Glossary to read some other standard definitions of Program.

The projects within a program share a goal. The program goals will not be achieved or will be partially achieved if some of the projects within a program are not successful.

The projects within a program are related to each other because of the shared program goal and a common outcome.

Each project in a program creates a unique product, service or a result. Outcome (product, service or result) of one project may be used by the other projects within the same program. These outcomes collectively contribute towards the shared program goal.

If two projects share the same technology or resources but do not have a shared goal then they cannot be considered as part of the same program.

Here is an example – A social program to setup and provide good healthcare in villages will include multiple projects for providing fresh water supply, improving sanitation, arranging medicines, and coordinating with different governmental and non-governmental organizations. The shared goal of this program is to provide good healthcare.

Program Management involves coordination among the constituent projects so as to obtain the benefits that might not be obtained if they are managed individually. Program Management may also involve completing some work that is outside the scope of individual projects.

Note: Related projects may or may not be similar. Similarity may come from deploying same/similar technology, using shared resources, working for the same client etc. If the projects are similar but not related, then they should be managed as part of a Portfolio.

Portfolio Management: Definition, Diagram & Example

A portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.

PMBOK Guide

You can also refer to Max Wideman Glossary to read some other standard definitions of Portfolio.

Portfolio is a collection of projects programs, and operational work. The projects and programs within a portfolio are not related to each other. Portfolios are aligned to the business and industrial domain of an organization.

The constituents of a portfolio are used to fulfill strategic business objectives of an organization. Strategic business objectives could include maximization of profits, improving brand & reputation, reducing overall costs, and optimization of resource usage.

Here is an example – I maintain another website, which focuses on income generation through digital media. This website and the other website are part of my work portfolio. They are not related to each other but I use them to achieve my strategic objectives.

Project vs Program vs Portfolio

	Project	Program	Portfolio
Keywords	Temporary Unique	Related projects Shared goal	Collection of Project, Programs and Operations Strategic business objectives
Major Tasks	Collecting project requirements Managing stakeholders Completing project scope Balancing project constraints	Coordination among related projects Controlling inter-dependencies among related projects	Selection of right programs and projects Prioritization of work Optimization of organizational cost, resources etc. Maximization of organizational profits
Benefits	Final product, service or result	Meeting the program goal	Organizational benefits like reduction in costs, increase in profits, and a good return on investments

Just notice the major tasks written in the table above. The role of respective managers is to complete those tasks e.g. one of the roles of a project manager is to collect project requirements.

Examples of Project Program and Portfolio Management

Consumer Durable Company Example

A consumer durable company is in the business of design, development, marketing, and servicing consumer products like refrigerators, washing machines, air-conditioners (AC) etc.

Portfolio Management – The Company, itself, is the largest portfolio. Different divisions like Refrigerator Division, Washing Machine Division and AC Division would be sub-portfolios. Each sub-portfolio would be headed by a Division Head like a Vice President. The portfolio and sub-portfolios will have running programs, projects and operations.

Program Management – Each division within the company would have several running programs e.g. Launch a new line of refrigerators. This program could involve several projects e.g. a design project (refrigerator design), a manufacturing project (setting up refrigerator manufacturing), a marketing project, a servicing project (training post-sales servicing personnel) etc. The projects within the program might be executed at different times by a different set of people but they will be governed by the larger shared goal of “making the new line of refrigerators successful”.

Project Management – The Company would have several running projects at any given point in time. These project may or may not be part of a program e.g an IT project to implement a Customer Relationship Management (CRM) software may not be part of any program.

Real Estate Company Example

A real estate company is in the business of constructing buildings and performing related work to fulfill the unmet public demand.

Portfolio Management – The Company, itself, is the largest portfolio. Different divisions like Commercial Division and Residential Division would be sub-portfolios. Commercial Portfolio could include construction of malls, shopping complexes, and office buildings while Residential Portfolio could include construction of residential buildings, and row houses. Each sub-portfolio would be headed by a Division Head like a Vice President. The portfolio and sub-portfolios will have running programs, projects and operations.

Program Management – Each division within the company would have several running programs e.g. a Residential Township at location X. This program could involve several projects e.g. construction of row houses, construction of a multi-storied residential building, construction of a club house, landscaping project, marketing project etc. The projects within the program might be executed at different times by a different set of people but they will be governed by the larger shared goal of “making the township successful & livable”.

Project Management – The Company would have several running projects at any given point in time. These project may or may not be part of a program e.g a procurement optimization project to reduce material procurement costs may not be part of any program.

Fianl Words

There is a difference between Project, Program and Portfolio but many people use these terms interchangeably in day to day conversations.

Different companies use these terms differently. Many people within the same company use them differently. Usually, there is confusion around the meaning of these term. Each of these terms have a distinct meaning & significance and they should be used appropriately.

Over To You

What is your take on these terms? How do you use them in your organization? Do you use them differently?

I would love to hear from you.