The Relationship among Project Management, Program Management and Portfolio Management

Project management is to apply knowledge, skills, tools and technologies to project activities to meet the requirements of the project. Project management can be achieved through rational use and integration of project management processes required for a specific project. Project management enables organizations to implement projects effectively and efficiently. ?

Program management refers to the application of knowledge, skills and principles in the program to achieve the goals of the program, and to obtain benefits and control that can not be obtained by managing the components of the program alone. Project components refer to projects and other projects in the program. Project management pays attention to the interdependence of the project itself to determine the best way to manage the project. Plan management focuses on the dependencies between projects and plans as components to determine the best way to manage these projects. Specific management measures for project set and dependencies between projects include:

Adjust the organizational or strategic direction that has an impact on the goals and objectives of plans and projects; ?

Assign a series of programs to program components; ?

Manage the dependencies between program components in order to realize the program in the best way; ?

Manage project risks that may affect multiple projects in the project; ?

Resolve constraints and conflicts that affect multiple projects in the project set; ?

Solve problems between projects and programs as components; ?

Manage change requests within the same governance framework; ?

Allocate the budget to multiple projects in the project set; ?

Ensure that the plan and the projects it contains can achieve benefits. The establishment of a new communication satellite system is an example of the project set, which includes the design and construction of satellites and ground stations, satellite launch and system integration.

Project portfolio refers to projects, project sets, subprojects and businesses jointly managed to achieve strategic objectives. Portfolio management refers to the centralized management of one or more portfolios in order to achieve strategic objectives. The programs or projects in a portfolio are not necessarily interdependent or directly related. The purpose of portfolio management is:?

Guide the investment decision of the organization. ?

Choose the best combination of programs and projects to achieve strategic goals. ?

Provide transparency in decision making. ?

Prioritize team and physical resource allocation. ?

Improve the possibility of realizing the expected return on investment. ?

Realize the centralized management of comprehensive risk prediction of all components. ?

In addition, portfolio management can also determine whether the portfolio conforms to the organizational strategy. In order to maximize the value of the project portfolio, it is necessary to carefully examine the components of the project portfolio. Determine the priority of each component, so that the component that is most conducive to the strategic objectives of the organization has the required financial, human and material resources. For example, an infrastructure company with the strategic goal of "maximizing return on investment" can combine oil and gas, power supply, water supply, roads, railways and airports into a project portfolio. In these merged projects, organizations can manage interrelated projects as a portfolio. All power supply projects are classified as power supply project portfolio. Similarly, all water supply projects are classified as water supply project portfolio. However, if an organization's project is to design, build and operate power stations, these interrelated projects can be grouped into a project group. In this case, the power supply project team and similar water supply project team are the basic components of the infrastructure company's project portfolio. ?

From an organizational point of view, project, plan (team) and portfolio management:

The focus of planning and project management is to implement plans and projects in a "correct" way; ?

Portfolio management focuses on developing the "right" portfolio and projects. ?