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Taking the PMP Exam - Part 11 - PMO's Programs and Portfolios

I think that passing the PMP exam requires attention towards the context that the PMI believes Project Managers exist in. That context is a hierarchy of strategic plans (at the top), portfolios of programs or projects, projects and subprojects. Other than the clear break between strategy and project, one can imagine that the stones at the top of the pyramid are the same as the stones at the bottom, but since PMI takes the time to call them separate and different you had better know why. Let's start at the top:

Portfolios A portfolio is a collection of projects and/or programs which serve some strategic business objective. If your company makes hats, shovels, pitchforks and plastic flowerpots and sees some strategic value in adopting some new digging technology, they may put the shovels and pitchforks together in a portfolio and assign someone to look after it. The thinking is that they are pretty much the same line of business. However, the grouping is not limited to business lines. It could be types of projects or even along other categories (placing all "High-Risk" projects together and managing them as a group. Treating the projects as a generic class and measuring them against each other or a common metric is a hallmark of Portfolio Management.

The word portfolio is derived from the financial markets and in a way the objectives are similar - managing the portfolio to maximize value, balance risk and reward, optimize investments. The objectives are fundamentally different from project management which for the most part consists of meeting the requirements. As a result Portfolio management is usually the job of senior managers.

The next step down from the top is a Program. PMBOK's definition of a Program is:

"A program is a group of related project managed in a coordinated way to obtain benefits and control not available from managing them individually"

Let's look at how that is different from Program management. Program management deals with the temporary and unique. A program is generally heterogeneous. There may be multiple simultaneous projects which must be coordinated to meet a larger goal or there may be multiple iterations of a series of similar projects. This differs from a portfolio in that the program manager is still responsible for "getting it done". Program management centralizes and coordinates the management of projects. There is not much more to it than that. PMI is developing a Program Management Certification, so perhaps I'll tackle that one day, but not now.

Subprojects We already covered projects so move on to the next leve, the subproject. A subproject is typically very much like a project, but is broken out (or divided) off to ease management. This is commonly done when the control of an element of work exists in a different sphere of control such as a sub-contractor or external vendor or perhaps a different functional unit of an organization. As such, subprojects can be divided again and again until you run out of project and subproject managers. They are managed in the same way as projects except that some care needs to be taken in some of the process areas, most notably developing clear requirements and defining relationships and dependencies. It is at the interfaces where troubles can build up. Good communication will help to minimize the issues.

The Project Management Office (PMO) I have my questions about the effectiveness of many "project management offices" but surely if project managers are professionals they need a place where they can drink coffee don't they? In line with PMI's goals for the industry of project management, the PMO is a separate organizational unit meant to centralize and coordinate management of projects. It is a broad definition and ranges in practice from a group of project management professionals who provide project management support to being a group of "real" project managers who are actively managing the projects. In my mind it is promoted simply to allow differentiation of some specific sub-set of managment skills and reward and recognition thereof. That said, when done right it has some essential goodness. Here is a short list of things it CAN provide (if done right):

  • Development and implementation of standardized project management methodologies and metrics.
  • Training, development and mentoring of project managers
  • Archiving of historical data and a librarian function
  • Extended analysis of project management success factors
  • Tool selection and support
  • Resolution of issues and assisting in alignment between different individual projects
  • Digesting and packaging project level information for executive consumption
  • Resource allocation and reporting

That wraps up the PMBOK Guide Introduction. Next we move on to the Project Life Cycle. No, it is not something you pedal.

Things to remember:

  • Hierarchy of Strategy:Portfolio:Program:Project:Subproject
  • Different goals and different methods of management at different levels of hierarchy
  • PMO is a centralization of common skills and resources aimed at optimizing the management of a number of projects.
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  • Comments (1)

    James:

    This article has very useful information, it will be helpful for many certification exam aspirants.
    Actually one of my friends first read this article and asked me to visit this page.
    It’s really amazing to read this description, i appreciate your efforts.

    Thanks,
    James

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