Relationship between Programs and Projects
www.ikompass.edu.sg
Purpose of the Standard
Index What is a Program
What is Program Management
Relationship among Project, Program and Portfolio
Role of a Program Manager
Program External Factors
www.ikompass.edu.sg
Purpose of the Standard A standard is a collection of best practices that can be applied to most programs, most of the time. It provides a common framework for running programs.
Uncoordinated projects Firefighting Lack of accountability
Concepts in the standard can be applied across various industries and their application is known to provide value to the organization. The standard helps an organization to create company specific guidelines for how programs are managed. Think of the consequences of not having guidelines when multiple programs are executed in a company. For example, each program manager runs a program the way he or she feels appropriate and thus making it difficult to track expenditures and resource usage.
www.ikompass.edu.sg
Declining results due to:
Lack of alignment to strategy Lack of understanding Inconsistency in project results Low resource utilization Waste and rework Duplication
Purpose of the Standard – Common terminology The standard provides a common terminology for program managers. A common terminology is essential in programs spanning borders, cultures and organizational structures
The Program Management Standard specifies roles and responsibility assignments between program managers, project managers and portfolio managers. This sets the foundation for implementing organizational strategy.
“I thought, as a program manager, I was responsible for approving the change request”
“Well, since its my project, I approved the change request”
A common problem faced by organizations is differentiating what a program manager does and what a project manager does. The standard aims to address this situation. Lack of common program terminology
www.ikompass.edu.sg
What is a Program A Program is defined as a collection of related projects managed in a coordinated manner to obtain benefits and control not available from managing the projects individually
Related Projects Operations
A program can include non project activities like operations. All the elements that make up a program are called components. A key part of defining a program is identifying the components that make up a program. A component can be a project, nonproject work and effort involved in managing projects.
www.ikompass.edu.sg
Effort in Managing
Program
Components that make up a program
What is a Program Discussion Where does your Program Fit?
www.ikompass.edu.sg
Components that make up a program Related projects mean discrete efforts that are grouped together by commonalities between the efforts
Remember the definition of a project. A project is a temporary endeavor to create a unique product, service or result. When you have a group of projects, each with a unique product, service or result, and each of the projects are related to one other, it makes a case for a program.
Structure
A key element of defining a program is to identify the various ways the projects are related.
Parking lot
Shopping complex program with 4 discrete projects related to each other
The shopping complex is made of up 4 projects. The structure, the parking lot, the landscaping and a helipad. While each of these projects are discrete efforts, together they make up a shopping complex program. Helipad
www.ikompass.edu.sg
Landscaping
Coordinated Management Program contains related projects managed in a coordinated manner
Dependency Managing related projects in a coordinated manner involves identifying and managing the dependencies between the projects. These dependencies can be between the projects or between the project and the overall program effort. The landscaping project, which involves planting trees, clearing vegetation and leveling uneven ground, is dependent on the structure project, which involves digging the hole, building the foundation and erecting the structure. The dependencies require coordinated management
www.ikompass.edu.sg
Structure
Shopping complex program with 4 discrete projects related to each other
Landscaping
Benefits & Control Program involves projects managed in a coordinated manner to obtain benefits and control not available from managing the projects individually
Decision of managing projects individually versus managing the projects as a program requires a evaluation of the consequences of managing related projects individually with no coordination.
Structure
Hole being dug at the same place where the trees are already planted due to no coordination
Assuming that structure was being built as a project with no coordination with the landscaping project, the result could be that the landscaper planted beautiful trees at the sample spot wherein the hole was marked for digging. The two projects are managed as a program with collective benefits and control. The benefits and control are not available if each of the projects were managed separately with no coordination.
www.ikompass.edu.sg
Landscaping
Benefits Key to understanding programs lies in understanding the consequences of running a set of related projects individually with no coordinated management
Projects run individually
Running a set of related projects as a program requires evaluation of the dependencies between the projects. The dependencies can be in the form of collective benefits or in the form of control. A benefit is a utility delivered for enhancing current capability or creating new capability in an organization. Benefits from the related projects could be realized at the end of the program or it could be realized in increments during the program lifecycle.
For example, a benefit delivered by the parking lot project is that vehicles coming to the shopping complex have a place to park. This could be realized only at the end of the program when the shopping complex is completely operational
Projects managed as a Program
Benefits – Shopping complex program Projects create unique products, services, results or deliverables. These outcome of projects create benefits. A Program manages these benefits in a coordinated manner.
Project
The shopping complex program has 4 projects with each of them producing unique deliverables. These deliverables together offer collective benefits that are managed as a program If this was not managed as a program, situations such as the garden not being at close vicinity or the parking lot not being convenient or the structure’s design not being congruent with the landscape could arise
www.ikompass.edu.sg
Project Outcome
Project Benefit
Building Structure
Retail Outlets
Garden
Place to relax
Helipad
Chopper services
Parking lot
Drive to mall
Program Benefits
Providing a convenient shopping experience for customers along with garden facility to relax in close vicinity
Examples of Programs Advantages of managing a collection of related projects as programs require a program manager to document the interdependencies that exist between the projects and what happens if these interdependencies are not coordinated.
Outsourcing Program
Service Enhancement Program
Each of these programs are made up of related projects. Lets look at some programs and the possible projects that make up the program along with the collective benefits.
Merger Program
IT Transformation Program
www.ikompass.edu.sg
Kampen Inc Outsourcing Program Kampen Inc is an insurance company with the product portfolio of life insurance, vehicle insurance, health insurance and disability insurance. One of the initiatives that Kampen has undertaken to reduce operating costs is to outsource certain functions.
Program
Outsourcing Program
Projects
Claims Processing
Technical Help Desk
Customer Service Call Center
The outsourcing initiative has been classified as a program with various components. Components include related projects and other non-project work such as operations. Classifying it as a program means coordinated management of benefits from each of the projects Collective benefits If each of these projects were run individually with no coordination, the highlighted benefits may not be realized.
Selecting vendors & technology for the three projects Hiring and training new staff for the three projects Technical and business dependencies between the projects Internal change management as a result of outsourcing
Sloten Airways Service Enhancement Program Sloten Airways has decided to make service improvements to increase their customer base. One of the initiatives is to enhance the current mode of check-in which only includes airport counter check-in. The new program is to add internet, telephone and SMS check-in capabilities
Program
Flight Check in options
Projects
Internet Check-in
SMS Checkin
Telephone Check-in
The flight check-in program is made of three projects, Internet checkin, SMS check-in and Telephone check-in. These three projects need to be managed in a coordinated manner due to the dependencies. Collective benefits Three options for the same customer Sharing same database of customers Collective marketing about new features
www.ikompass.edu.sg
Coordinated development of new features
Baarn Softdrinks Inc Merger Program Baarn Softdrinks has created a protfolio aimed at increasing market share in developing countries. One of the initiatives is to merge with an established company in the new country. Baarn Softdrinks has classified the merger as a program initiative
Program
Cross border Merger
Projects
Product Extension
Distribution Channels
Branding
The merger program is made of three projects, product extension, distribution channels and branding. These three individual projects have discrete benefits as well as collective benefits. The success of the cross border program is determined by the effectiveness of the coordination between the projects. A merger could also include many other projects such as sales, finances, human resource management etc.,
Collective benefits Merged product line affecting branding New entity and new distribution channels Eliminating redundant marketing Merged departments and functions
Zwolle Banking Inc Software Upgrade Program Zwolle Banking has embarked on an initiative to modernize the bank. One of the program’s initiated is to upgrade certain critical software used by the bank’s employees.
Program
Software Upgrade
Projects
CRM Software
Internet Banking Software
Identity Management Software
The software program has three projects, CRM software, Internet Banking Software and Identity Management Software. These three projects have discrete benefits as well as collective benefits. Collective benefits Common operating system Common procurement for resources Ability to mitigate risks arising from the dependencies Common governance structure to monitor and control
www.ikompass.edu.sg
What is Program Management Program Management is the centralized management of the related projects to achieve collective benefits. Collective benefits arise as a result of integrated cost, schedule and effort.
Land Acquisition Project
Centralized management provides for an optimized way of working and producing results. Centralized management is generally applied for costs, schedule, risks and resources for multiple projects. For example, a highway construction program is characterized by centralized management due to the amount of coordination needed between the various projects. Projects like land acquisition, traffic diversion, material procurement, workplace safety, bridge construction etc.,
www.ikompass.edu.sg
Workplace Safety Project
Central Coordination of cost, time, effort
Road Construction Project
Traffic Diversion Project
Centralized Management of Highway Construction program
Relationship among Project, Program and Portfolio Projects, programs and portfolios are organizational approaches to implementing company business strategy. Mature project organizations use a combination of projects, programs and portfolios in a hierarchically structured approach to implement company strategy.
A portfolio is a collection of programs, projects or operational work that may or may not be related to each other. The components, even though not related to each other, are grouped together for a strategic reason. Portfolios represent an organization’s strategic business intent. Let’s look at an example of strategic business intent and the corresponding portfolios.
Business Strategy
• Increase Market Share • Improve Revenue
Portfolios
• Expand to New Markets • Extend Product Line
Programs
• Emerging Markets Program • New Product Introduction
Relationship among Project, Program and Portfolio A collection of sub projects make up a project. A collection of related projects make up a program. A collection of programs and operational work make up a portfolio. Projects, programs and portfolios are structured in a hierarchy during organizational planning
A business strategy can be implemented without portfolios and programs, however, the benefits associated with a structural approach is lost. A company may end up with many projects that are run individually with no coordination and control leading to probable failure.
Business Strategy Collection of programs, projects and operations
Collection of related projects
Temporary endeavors to create a product or service
www.ikompass.edu.sg
Portfolio
Program
Project
Project
Program
Project
Relationship between Strategy & Portfolio Kampen Inc is an insurance company. Kampen’s business strategy for the year includes maximizing shareholder value by increasing profitability. The business strategy is to provide affordable insurance solutions and increasing profit margins.
Mission: To be the world’s Insurance provider of choice
Vision: Market leader in Insurance solutions For realizing this goal, 3 portfolios are newly created. Operational excellence, divestitures and new market expansion. Each of the portfolios will contains programs and operational work. Portfolios represent the organization’s approach or intent for implementing the business strategy. In this example, the organization assumes that these three portfolios will lead to affordable insurance and increased profit margins.
Strategy: 1. Insurance solutions that are affordable 2. Insurance solutions that have mass reach 3. Insurance solutions that are profitable 4.Insurance solutions with disciplined risk taking
Portfolios: Operational Excellence, Divestitures and Product restructuring, New Markets Expansion
Relationship between Portfolio & Program Kampen Inc has three portfolios, Operational Excellence, Divestitures and New Market expansions. Each of the portfolios contain components such as programs and elements of operational work.
The programs that make up each of the portfolios doesn’t have to be directly related to each other. For example, the business automation program is not related to the product restructuring program. However, both these programs contribute to operation excellence. The operational excellence portfolio is a means of increasing profitability for Kampen Inc
Strategy 1. 2. 3. 4.
Insurance Insurance Insurance Insurance
solutions solutions solutions solutions
that are affordable that have mass reach that are profitable with disciplined risk taking
Operational Excellence
Divestitures
New Market Expansion
Six Sigma Program
Product Line Analysis Program
Emerging Markets Expansion
Outsourcing Program
Sell-off Program
New Product Line Program
Automation Program
Transition Program
Operations Product Restructuring
www.ikompass.edu.sg
Information flow between Portfolio and Program Think of portfolios like blocks that contain only those components that add value to the portfolio in terms of realizing the business strategy. Decisions about whether a component should be added into the block or not is based on relative value of a program or component. This decision is made by a portfolio manager
Information flows from the portfolio to the program during the early stages of the program. A Program is initiated based on the inputs received by the portfolio. When the program is being executed, information flows from the program back to the portfolio. This information is mostly about the status of the program.
www.ikompass.edu.sg
Portfolio selection Portfolio decisions Strategic Goals Control Funding
Program Initiation
Reports Updates Change Requests
Program Execution
Information Flow
Relationship between Program & Project Programs are made of a collection of related projects. One of the programs in Kampen’s portfolio is Outsourcing. The outsourcing program falls under the operational excellence portfolio. The Outsourcing program has 4 related projects.
Each of the projects in the outsourcing program have discrete benefits as well as collective benefits. The projects are managed in a coordinated manner with centralized management. Interdependencies between the projects involve having a common support center, technology, communication, procurements, risks, hiring and training.
www.ikompass.edu.sg
Kampen Inc Strategy: “Insurance solutions that are profitable” Operational Excellence Portfolio Business Automation Program
Product Restructuring Program
Outsourcing Program Claims Process Outsourcing
•Common Support Center •Common Procurements •Common Vendors
Help Desk Outsourcing Projects Call Center Outsourcing
•Centralized Hiring and Training Data Center Outsourcing
Information flow between Program & Projects Programs are a way of managing and handling projects in a coordinated manner. Programs provide inputs for projects and involve identifying interdependencies between projects and coordinating the deliverables or outcomes of the projects
Projects are initiated based on the inputs provided by the program. As projects are executed, information on the status of the projects flows back to programs.
www.ikompass.edu.sg
Program Decisions Business Case Control Funding
Project Initiation
Reports Updates Change Requests
Project Execution
Difference between Project Management & Program Management Project Management
Program Management
•
Focused on deliverables
•
Focused on coordination of related deliverables
•
Projects initiated through inputs from a Program
•
Projects initiated through inputs from a Portfolio
•
Focused on tasks and activities that produce deliverables
•
Focused on managing interdependencies between projects
•
Responsible for project resources
•
Responsible for resource allocation between projects
•
Focused on getting the job done
•
Focused on alignment of projects and strategic goals
•
Managing project team members
•
Managing project managers and providing overall leadership
Project Management
www.ikompass.edu.sg
Program Management
Portfolio, Program & Projects – Putting it all together Kampen’s strategy is to increase profits. This is achieved through operational excellence and product restructuring. Operational excellence portfolio contains multiple programs including outsourcing. Outsourcing program has multiple projects including call center outsourcing and help desk outsourcing
“Insurance solutions that are profitable”
Strategy
Portfolios Operational Excellence
Successful projects and a profitable and optimized project portfolio require a project culture based on a common terminology and project methodology with clearly defined roles and responsibilities that are common to the entire organization. PMI’s standards for projects, portfolio and programs provide best practices in the form of standards
www.ikompass.edu.sg
Product Restructuring
Programs Outsourcing
Automation
Projects Claims Processing
Call Center
Help desk
Role of a Program Manager Program Manager is responsible for providing overall leadership to the project managers. This includes communicating the big picture to the project managers which encompasses alignment of a project to organizational strategy. Program managers are responsible for ensuring consistency in the manner in which projects are implemented. This consistency comes from having established standards and guidelines. The PMO supports the program manager in providing these guidelines and standards. The program manager is commercially and financially responsible for the projects and their outcome. The program manager is the primary risk taker for the projects and makes the tollgate decisions, based on an assessment of the project's alignment with the organization's business direction
Role of a Program Manager
Consistency
Compliance
Coordination
www.ikompass.edu.sg
Program Manager Knowledge and Skills Program Manager is responsible for aligning all program efforts in the organization into the same business direction, focusing on customer satisfaction and securing maximum value from of the entire program through an efficient use of resources.
Line Manager
This requires professional program management knowledge, and a shared understanding of how it is applied in the organization. Communication skills, leadership skills, strategic visioning and planning skills and stakeholder management skills are a few of the most important skills for a program manager.
www.ikompass.edu.sg
Support Staff
Vendor
Managing director
Strong communication skills to deal with various stakeholders
Program Manager Skills – Political Climate Stakeholders can positively or negatively influence a program or be positively or negatively influenced by the program outcomes. A Program manager needs to be aware of the political landscape of the organization.
Political landscape in an organization is about power, influence and decision making abilities of stakeholders and groups. Understanding the political climate is important in achieving a positive relationship and setting the ground work for shared attitudes and teamwork.
www.ikompass.edu.sg
“Hidden agendas” “Political landmines” “Balance of power”
Program – External Factors A Program is a component within the larger organization. Other components within the organization outside that of the program can have a great influence on the success of the program.
Program Manager is responsible for identifying these influences and managing them for the overall benefit of the program. Common influences are organizational process assets, enterprise environmental factors and enterprise external factors. Organizational process assets are policies, procedures, tools, templates and lessons learned databases that exist in the organization.
www.ikompass.edu.sg
Best Practices, Lessons Learned, Historical Information, Risk Data, Completed Schedules
Program External Factors – Enterprise Environmental Factors Enterprise Environmental Factors are situations, conditions and circumstances within the company that influences the success of the program. This include enterprise factors such as the organization’s culture, risk thresholds and reporting relationships. Programs should be allowed to focus the on fulfillment of their goals. However, there is a built-in risk in this since the business direction of the organization could be lost or changed. This is why a clear and strategic understanding of the enterprise environmental factors is needed.
www.ikompass.edu.sg
Conditions in the enterprise could change resulting in change of program goals
Program External Factors – Enterprise External Factors Apart from the factors within the company, a program manager needs to have an understanding of conditions outside the company that can influence the program. This includes market place conditions, government regulations, customer trends etc.,
Stock Markets
Government regulations
www.ikompass.edu.sg
Factors outside the company that could influence the program