In my previous blog post, while demystifying the journey from strategy to execution, I promised to clarify why a strategic initiative can be a project, program, or Portfolio. Making good my promise is essential in the sense that many believe that every project must be a component of a program. In a similar vein, some practitioners wallow in the thought that a program must be a component of a portfolio for any project to make a strategic sense. It is good to start by succinctly highlighting their basic definitions before striving to relate them to the essence of the strategic initiative.
A portfolio is the strategic endeavors that materialize through concerted procedural business decisions towards optimizing investment value in the organization's operational system. Corporate entities use portfolio management to coordinate subsisting processes for planning strategy and appraising investment operations, programs, and projects to ensure optimal value in delivering the endeavors. Most people would summarily apply it to mean the right selection of programs and projects while the latter is about doing them right.
The essence of a program is to deliver strategic benefits through endeavors that might be multiple, one-off, repetitive, or related. A tacit observation from my years of experience in operating systems indicates that most organizations run on programs to deliver benefits to their patrons towards sustaining the values at the strategic level. One of the approaches to bring strategic focus to programs is 'managing by projects' by structuring some of the operational endeavors into short-term realizable projects.
A project is a bunch of temporary endeavors to deliver a unique product or service within a specified time, cost, quality, and performance parameters. Project Management presupposed applying knowledge, skills, tools, and techniques to project activities towards meeting the project requirements (Project Management Institute, 2017). The organizational perspective of Project Management includes the entire concept of using corporate enabling practices of project, program, and portfolio management to execute organizational strategy producing better results, better performance predictably, as well as a sustainable competitive advantage (Project Management Institute, 2013).
Following the above definitions, an initiative can be a project, program, or Portfolio because each of them can individually or collectively be used to deliver strategic objectives. Depending on your Project Program Portfolio Office (P3O) design, an initiative can take the form of any of the Ps to yield the desired strategic value. Sometimes, it becomes an issue of nomenclature, depending on the initiative's size and budget. Stay tuned for the post on PMO vs. P3O. It is promising, educative, and engaging.
References:
- OGC (2011) Management of Portfolios, Axelos, Norwich.
- Project Management Institute (2017). PMBOK® Guide – Sixth Edition. Newtown Square, PA: Project Management Institute.
- Project Management Institute (2013). Organizational project management maturity model (OPM3), Third Edition. Newtown Square, PA: Project Management Institute.
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