The University of South Carolina Aiken’s MBA with a Specialization in Project Management online program includes a required course that explores the relationship between project management, program management and portfolio management. Think of these as concentric tiers of a hierarchy — program management encompasses project management, and portfolio management encompasses program management. Here we take a comprehensive look at each.
The bottom level of the hierarchy is the tactical management of a single project with a defined end. According to the Project Management Body of Knowledge, the guide that defines the standards of this discipline and sets the terminology, “A project is a temporary endeavor undertaken to create a unique product, service or result.” It should accomplish a specific objective, like the creation of a new product or system. If a project is aimed at setting up a new system for handling customer complaints, once that system is ready to go live, the project is complete after handoff to the client.
Project management is the discipline of using proven knowledge, skills, techniques and tools to meet project requirements. Management of a project includes initiation, development of a plan, coordination, execution, oversight, delivery to the client and closing of the project.
The plan is arguably the most important component of project management, as it includes the budget, steps, timelines and objectives, and all contributors receive it to keep the process focused. The plan identifies the resources required for each step in the timeline so that contributors have what they need, including data, raw materials and equipment.
To ensure that each contributor is executing his or her role properly, the project manager must monitor individual tasks and track them using project management software, like Basecamp or Asana. The software acts as a centralized hub that enables all contributors to know who is responsible for what, and to see the progress of the project. The software also is a portal through which contributors ask questions and collaborate. If there are problems, the project manager works with the team to resolve them, or communicates with the client to revise expectations.
This discipline is the higher level management of a group of similar or related projects; without it, organizational efficiencies would not be possible. For example, if a bakery has a fudge cake, it might join the chocolate chip cookies, brownies and chocolate cupcakes in the chocolate desserts program. The projects are similar, and there likely is plenty of overlap in contributors and tasks, so grouping them provides efficiencies in the resources applied to each product.
The program manager is the person responsible for the chocolate baked goods. He oversees the project managers. The objectives of program management are to align a group of projects with strategic organizational goals and optimize resource utilization to maximize organizational performance. The program manager handles multiple projects, but oversight is more broad, with a focus on processes rather than tasks. Successful program management reduces conflict and increases coordination among projects. A program manager typically has years of project management experience and has successfully managed large, complex projects.
Project portfolio management involves oversight of a company’s proposals, programs and projects to accomplish big-picture initiatives. This management tier provides a higher level of expertise than program management and will offer insight into budget and resource allocation.
Whereas program management focuses on the efficient resource allocation between similar projects (including maintaining budgets and monitoring risk), portfolio management is more strategic and diverse. A portfolio manager oversees dissimilar projects that must be considered together when a business plans for the future. Portfolio management is about determining where the company should invest in order to achieve large strategic objectives.
Graduates of specialized project management MBA programs often move from project management toward program and portfolio management. The scope of their oversight broadens with experience, from micro-management to high-level macro-management. Gaining in-depth exposure through an MBA program can help accelerate this career path and provide the confidence and knowledge to excel at all levels.