RELATIONSHIP OF PROJECT, PROGRAM, PORTFOLIO, AND OPERATIONS MANAGEMENT
There exists a relationship between project program portfolio operations management in large organizations undertakings several projects at a time. This relationship is natural and beneficial for organization’s to effectively use the common resources. To better understand the relationship among project program portfolio operations management, first understand the definition of each of them and then the relationship.
Project: a project is temporary endeavor to create a unique product, service, or result. Temporary mean a project has definite start and finish date. A project may take several years to complete depending upon the complexity, scope, and context of the project.
Program: a program is a collection of similar type of projects and are collectively managed to gain the benefits of being managed together over managing them individually. For example, government start reconstruction and rehabilitation program in the flood or earth quake affected areas in a country. Projects included in the program may be of type; construction and development of educational institutions, construction and development of health care facilities, repairing or new construction of roads, settlement plan of displaced persons, and infrastructural development etc.
Portfolio: projects, programs, sub-portfolios and operations are collectively managed to achieve organizational strategic goals and objectives. Portfolio ensure effective use of company’s resources.
Operations: operations are ongoing and continuous activities (day to day activities) of an organization. For example, operation of power plants, manufacturing and assembling of cars etc. these are ongoing and continuous (24/7) activities. Launching of new and specialized featured car, or construction, erection and commissioning of power plants equipment are the part of project. As these are one time activities.
Project management frameworks, processes, methodologies, models, tools and techniques and standards provide foundation to achieve organizational goals and objectives. A project may have three different scenarios like stand-alone project (construction of a single house), part of a program (new city development), part of a portfolio. Project managers, program managers and portfolio managers interact with each other when a project is the part of program or portfolio. Organizational overall goals and objectives may be based on successful completion of number of projects. In this type of organizations projects are grouped into one program and assigned a program manager to manage this program. A program may have sub-program(s). large projects are not the part of program; these are called megaproject. According to Project Management Institute (PMI), A project may be categorized as mega project if it has a cost of 1 billion US dollars or more, 1 million or more people affected by the project, and a project having lifecycle of many years. Organizations may use project portfolio to manage sub-portfolios, programs, subprograms and projects being undertaken at any specified time. In large organizations, there is strong binding/ relationship of project, program, portfolio, and operations management. Following figure diagrammatically shows the relationship of project program portfolio operations management.
Program management, portfolio management and operations management differ from project management due to their activities, life cycles, goals and objectives, focus, outcomes and benefits. Often portfolios, sub portfolios, programs, sub programs, projects, and operations are engaged with the similar stakeholders and they have to share the same resources of an organization, requirement of share resources may result in the conflict (multiple projects demand the same resource at the same time) in the resource allocation. To avoid resource conflict, there is a need of effective coordination among portfolio manager, program manager and project manager. Organization wide portfolio may have projects, programs, and sub portfolios. For example, in the above figure, project 1, program A and portfolio A is under the organizational portfolio. Program A has sub program A1 and project 3, and portfolio A has program B. Program A1 has project 2 while program B has project 4. In the above figure, project, program, portfolio is in the same organization and some resources are common for all. Resources may be of human, material, financial and physical type. Portfolio management is used to manage programs and projects to achieve portfolio, program, project and organizational strategic goals and objectives. Portfolio management also ensue the effective and meaningful coordination among portfolio manager, program manager, and project manager. This coordination is beneficial for effective use of precious resources like human resource, material resource, financial resource and physical resource etc. resources are allocated to the projects or programs through prioritization. Prioritization may be based on risk associated with the projects or programs, schedule requirements, and resource requirements etc. A project of high priority acquires or use the resources first and low priority projects will acquire or use the same resources later on. Download this article.
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