With ever-increasing focus on delivering return on investment (ROI) in business, many organizations have implemented Program property management sebastopol ca and Portfolio Management functions to improve project success levels. Do you know the similarities and differences between them? Let’s take a closer look at what Program and Portfolio Managers do, and how they can improve your bottom line!
First, let’s get some definitions in place, and do some comparisons. Then, we can look at how organizations implement Portfolios and Programs to realize success. The quick definitions from the PMBOK Guide 5th Edition are:
– A project is a temporary endeavor undertaken to create a unique product, service, or result. Project Management is the science (and art) of organizing the components of a project. It involves the planning of an organization’s resources in order to move a specific project towards completion.
– A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Program Management is the application of knowledge, skills, tools, and techniques to a program in order to meet the program requirements and to obtain benefits and control not available by managing project individually.
– A portfolio is a collection of projects and/or programs and other work that are grouped together to facilitate the effective management of that work to meet strategic business objectives. Portfolio Management refers to the centralized management of one or more portfolios to achieve strategic objectives.
The focus on objectives in these definitions is the key distinguisher between Program Management and Portfolio Management:
Program management is focused on tactically improving a group of mutually beneficial projects, and other initiatives, as a whole.
Portfolio management is focused on achieving strategic business goals from a collection of programs and projects which aren’t necessarily related.
Let’s look at a simple example to explore how the difference impacts a business:
Let’s assume our fictitious company Real Estate Gurus (REG) is in the real estate business to provide housing projects of various types. REG management and board have a strategic goal to improve the net profit of the company.
Debbie has been assigned as the Portfolio Manager. The Portfolio is categorized into buckets that allow Debbie to group projects and programs according to their potential profit (high, medium, low) each with their corresponding risk levels. Debbie’s efforts are focused on increasing the overall profits of the Portfolio. She has selected several high ROI (and high risk) projects to maximize profits.
In Debbie’s portfolio there are projects for new house construction, projects for remodeling of new apartments, projects for marketing new homes, and projects for improving the efficiency of new home designs using IT tools.