Concepts
Often, these tasks are classified as projects, programs, and portfolios. Individuals preparing for the Certified Associate in Project Management (CAPM) examination must understand the subtle differences between these three core concepts. Let’s delve deeper into distinguishing features of projects, programs, and portfolios.
Projects
In the realm of project management, a project is described as a temporary endeavor undertaken to create a unique product, service, or result. Temporary doesn’t mean short; it means that every project has a definite beginning and end. The duration of a project may vary greatly, depending on its nature and complexity.
Take, for example, the construction of a residential building. It involves defining a plan, assigning roles and responsibilities, estimating costs, and setting deadlines. It starts with land acquisition and ends when the building is ready for occupation.
Characteristics of a project can be outlined as:
- Temporary Endeavor: Each project is unique in its existence and longevity.
- Definitive Beginning and End: Projects have a clear start and finish.
- Creation of a Unique Product or Service: The outcome of a project could be a product, service, or result, but it should be unique.
Programs
A program refers to a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. A program could include elements of work outside of the scope of the discrete projects in the program. Essentially, a program aims to achieve a broader objective which can be broken down into multiple projects.
For instance, a city development plan can be considered a program. It might include projects like building infrastructure, developing public parks, instituting waste management systems, etc. Each of these projects is managed collectively under the broader “city development program”.
Characteristics of a program are:
- Collection of Related Projects: A program comprises numerous inter-related projects.
- Broader Objective: Programs aim for broader objectives compared to projects.
- Greater Benefits: Coordinating projects under a program can often lead to greater organizational benefits and better management of resources.
Portfolios
A portfolio refers to projects, programs, sub-portfolios, and operations managed as a group to achieve strategic objectives. Portfolios may or may not include projects or programs that are inter-related. The projects or programs in a portfolio are aligned with the strategic objectives of the organization.
An example could be a software development company that has a portfolio including software development projects, customer support programs (program for managing and training customer support staff), and daily operations.
Attributes of a portfolio can be summarized as:
- Strategic Alignment: Every project or program within a portfolio aligns with the organization’s strategic objectives.
- Diversity of Projects and Programs: A portfolio may contain a variety of projects and programs that may or may not be interrelated.
- Achievement of Business Goals: Portfolios are crafted in a way that contributes to the realization of businesses’ overall goals.
The tabulated comparison can clarify further:
| Aspect | Project | Program | Portfolio |
|---|---|---|---|
| Objective | To create a unique product, service or result | To achieve a broader objective via coordinated management | To realize strategic business objectives |
| Scope | Defined and limited | Broad, including related projects | Broader and strategic alignment |
| Management | Managed by a project manager | Coordinated and managed by a program manager | Governed at strategic level |
Understanding the distinct characteristics of projects, programs, and portfolios is critical for CAPM exam takers. It sets the foundation for effective management, enabling one to properly allocate resources, manage risks, and achieve strategic objectives.
Answer the Questions in Comment Section
True or False: A project is a temporary endeavor to create a unique product, service, or result.
- True
- False
Answer: True.
Explanation: A project is indeed a temporary endeavor undertaken to create a unique product or service. It has specific goals and objectives, and a definite beginning and end.
In project management, a program is a series of related projects managed together to accelerate benefits and to control costs. True or False?
- True
- False
Answer: True.
Explanation: A program includes an integrated project set to achieve strategic objectives. Program management coordinates, directs, and oversees the execution of multiple projects that are bundled together.
True or False: A portfolio is a collection of unrelated projects.
- True
- False
Answer: False.
Explanation: A portfolio is a collection of projects, programs, and related activities that are grouped together to meet strategic business objectives. They may not necessarily be interrelated or directly connected.
Single Select: Which of the following is NOT a characteristic of a project?
- A. Temporary
- B. Unique
- C. Ongoing
- D. Defined scope
Answer: C. Ongoing
Explanation: By definition, a project is not ongoing. It has a start and a finish; it is temporary and not a day-to-day business process.
Multiple Select: Which of the following are components of a portfolio?
- A. Programs
- B. Sub-projects
- C. Projects
- D. Day-to-day operations
Answer: A. Programs, B. Sub-projects, C. Projects
Explanation: A portfolio can consist of programs, projects, and even subsidiary or sub-projects. However, day-to-day operations are not considered part of a portfolio.
True or False: A program manager is responsible for overseeing multiple individual projects.
- True
- False
Answer: True.
Explanation: A program manager oversees and coordinates the execution of multiple related projects to ensure that the program achieves its strategic objectives.
True or False: Project, program, and portfolio management are not connected at all.
- True
- False
Answer: False.
Explanation: These three are significantly interrelated. Portfolio management is the centralized management of one or more portfolios. Program management is the coordinated management of multiple related projects, and project management is the management of individual projects.
Single Select: Which is responsible for delivering a strategic objective?
- A. Project
- B. Program
- C. Portfolio
- D. All of the above
Answer: C. Portfolio
Explanation: A portfolio is designed to achieve a strategic company objective or benefit. Projects and programs within the portfolio all contribute to reach the strategic objective.
True or False: Projects are permanent fixtures in an organization.
- True
- False
Answer: False.
Explanation: Projects are temporary in nature. They have a defined beginning and end.
Single Select: Who has a more strategic role?
- A. Portfolio manager
- B. Program manager
- C. Project manager
- D. All have the same role
Answer: A. Portfolio manager
Explanation: The portfolio manager plays a more strategic role, as they deal with high-level business objectives and align projects and programs in a way that benefits the organization as a whole.
Multiple Select: Which of the following have specific and measurable objectives?
- A. Projects
- B. Programs
- C. Portfolios
- D. All of the above
Answer: D. All of the above
Explanation: Projects, programs, and portfolios all have specific and measurable objectives that need to be achieved.
True or False: Program management is about managing related projects in a coordinated way.
- True
- False
Answer: True.
Explanation: Program management indeed comprises managing several related projects in a coordinated fashion to obtain benefits and control not available from managing them separately.
Great explanation on the distinction between a project, program, and portfolio. Really helpful for anyone preparing for CAPM!
Thank you for this post. I’ve always been confused about these terms, but now it’s much clearer.