The P3MO (Part 2) – Best Practices

High-level View of Project, Program, and Portfolio Management

In part 1 of this series, we defined the P3MO as an acronym for “Project, Program, and Portfolio Management Office.” It’s based on the concept of a PMO (project management office) elevated to cover project portfolio management as well as project and program management. In part 2 we will discuss the relationship between the three components of the P3MO: project management, program management and portfolio management.

Project management ensures the successful completion of initiatives and their associated deliverables within the time, scope and cost parameters agreed to by the end-users of the product, service or result. The project manager manages stakeholder expectations and communication between all team members and stakeholders.

P3MO Relationship Venn - Click on image to enlarge

Program management provides overall leadership and vision to the project management process. The program manager is responsible for delivering value to the community of stakeholders.

Portfolio management aligns the portfolio of projects and other work with the objectives of the organization and ensures that the work delivers value to the business.

The relationship between projects, programs and portfolios

Portfolios are made up of projects, programs and other work. (Other work includes on-going operations, ad-hoc activities and other “business as usual” work.)

The diagram, above, represents a typical portfolio structure.

Where needed, sub-portfolios are possible, in which case they would each be consolidated up into the parent portfolio for the purposes of portfolio optimization, strategic alignment and financial control.

Projects that share a common benefit or serve a common business unit or market may be collected into a program. For example, projects supporting an enterprise-wide directive from the board of directors, such as the acquisition of a new operating company, could be managed as a program. Other examples would be a group of projects serving a single market or geographic region; or the collection of projects supporting the roll out of a new product or service.

A good rule of thumb would be, if managing 2 or more projects together would result in benefits and control not available from managing them individually, then these projects should be managed as a program, with one individual (either the function head or an assigned program manager) accountable for its success.

While the nature of initiatives (projects and programs) is time-based with a defined start and end, the portfolio is on going, its mix of initiatives fluid and changing over time.