ISO 21502: 2020 Clause 4.2.5 Projects as stand-alone, part of a programme or part of a portfolio

Project Management 11 Minutes

Projects can be organized as components of programmes or portfolios or can be stand-alone . See Figure below for examples of how projects relate to other components. The fundamentals of project management are the same in all situations, but a typical difference is how the project governance works, in particular the level of reporting and decision-making. If a project is part of a programme or portfolio, its objectives and governance should be aligned with the governance of that programme or portfolio.

An example of relationships between portfolios, programmes and projects

In project management, projects can exist in different organizational contexts and may be categorized as stand-alone projects, part of a program, or part of a portfolio. These distinctions reflect the varying levels of strategic alignment and coordination within an organization. Let’s explore each of these concepts:

  1. Stand-Alone Projects:
    • Definition: A stand-alone project is an individual initiative with specific objectives, scope, and deliverables. It is typically managed independently, and its success is measured based on its own goals and outcomes.
    • Characteristics:
      • Clear and defined project boundaries.
      • Distinct project team and project manager.
      • Specific start and end dates.
      • Unique project resources and budget.
    • Example: Building a new office facility, developing a software application, or organizing a marketing campaign.
  2. Programs:
    • Definition: A program is a collection of related projects and activities that are managed and coordinated together to achieve strategic objectives. Programs are often characterized by their focus on organizational benefits and the alignment of projects to strategic goals.
    • Characteristics:
      • Comprising multiple projects.
      • A program manager oversees coordination and integration.
      • Shared resources and interdependencies among projects.
      • Common strategic objectives and benefits.
    • Example: Establishing a company-wide IT infrastructure, implementing an organization-wide change initiative, or launching a new product line with multiple associated projects.
  3. Portfolios:
    • Definition: A portfolio represents a collection of programs and projects that are managed as a group to achieve organizational objectives. Portfolios are aligned with the organization’s strategic goals and priorities, and they involve the management of resources, risks, and priorities at a higher level.
    • Characteristics:
      • Includes multiple programs and projects.
      • High-level oversight by portfolio managers.
      • Strategic alignment with organizational goals.
      • Resource allocation and optimization.
    • Example: Managing a portfolio of projects related to business expansion, technology innovation, and process improvement to achieve overall organizational success.

Key Distinctions:

  • Strategic Alignment:
    • Stand-Alone Projects: Typically aligned with specific operational or departmental goals.
    • Programs: Aligned with broader organizational objectives and benefits.
    • Portfolios: Aligned with the highest-level strategic goals of the organization.
  • Management Level:
    • Stand-Alone Projects: Managed at the project level by project managers.
    • Programs: Managed at the program level by program managers.
    • Portfolios: Managed at the portfolio level by portfolio managers.
  • Scope and Complexity:
    • Stand-Alone Projects: Have a focused scope and are relatively less complex.
    • Programs: Involve multiple projects with interdependencies, addressing complex challenges.
    • Portfolios: Encompass a mix of programs and projects, often spanning different areas of the organization.
  • Resource Management:
    • Stand-Alone Projects: Resources are dedicated to the specific project.
    • Programs: Share resources across multiple projects within the program.
    • Portfolios: Optimize resource allocation across various programs and projects.
  • Risk Management:
    • Stand-Alone Projects: Risks are managed within the scope of the project.
    • Programs: Manage risks that impact the success of multiple projects within the program.
    • Portfolios: Focus on overarching risks that affect the achievement of strategic objectives.

In practice, organizations may have a mix of stand-alone projects, programs, and portfolios to effectively manage and execute their strategies. The alignment of projects, programs, and portfolios with organizational goals is essential for achieving success at both the project and organizational levels.

Projects can be organized as components of programmes or portfolios or can be stand-alone .

Organizations can organize projects as components of programs, portfolios, or as stand-alone initiatives based on their strategic objectives, resources, and overall management approach. The decision on how to organize projects depends on factors such as the complexity of the projects, the alignment with organizational goals, and the need for centralized or decentralized management. Here are guidelines for each approach:

  1. Organizing Projects as Stand-Alone:
    • Characteristics:
      • Independence: Each project operates independently with its own set of goals and objectives.
      • Management: Each project has its project manager responsible for its planning, execution, and closure.
      • Resources: Dedicated resources are allocated to individual projects.
    • When to Choose:
      • For small, straightforward projects with clear objectives.
      • When projects have minimal interdependencies with other initiatives.
      • When there is a need for project autonomy and quick decision-making.
  2. Organizing Projects as Components of Programs:
    • Characteristics:
      • Coordination: Projects are coordinated and managed together to achieve common objectives.
      • Program Manager: A program manager oversees the interdependencies and overall success of the projects.
      • Shared Resources: Resources are shared among projects within the program.
    • When to Choose:
      • When multiple projects are interdependent and need coordinated management.
      • For initiatives that contribute to a common organizational goal or strategic objective.
      • When there is a need for centralized control and oversight.
  3. Organizing Projects as Components of Portfolios:
    • Characteristics:
      • Strategic Alignment: Projects are selected and managed to align with overall organizational strategies.
      • Portfolio Manager: A portfolio manager provides high-level oversight and ensures alignment with strategic goals.
      • Resource Optimization: Resources are allocated strategically across different projects and programs.
    • When to Choose:
      • For organizations with diverse projects and programs spanning various business areas.
      • When there is a need to prioritize and balance resources among competing initiatives.
      • To ensure alignment with overarching organizational goals and strategies.

Key Steps for Organizing Projects:

  1. Strategic Planning: Align projects with the organization’s strategic objectives.Identify the overall goals that projects are expected to achieve.
  2. Project Selection: Assess and prioritize potential projects based on their alignment with organizational strategies and available resources.
  3. Create Programs or Portfolios: Establish programs or portfolios based on the nature and alignment of projects.Designate program and portfolio managers to oversee coordination and alignment.
  4. Resource Allocation: Determine resource requirements and allocate resources strategically, considering the needs of individual projects, programs, and the overall portfolio.
  5. Governance Structure: Define the governance structure for projects, programs, and portfolios. Establish communication and decision-making processes.
  6. Monitoring and Control: Implement monitoring and control mechanisms to track progress, manage risks, and ensure alignment with organizational goals.
  7. Adaptability: Remain flexible and adaptive to changes in organizational strategies, project priorities, and external factors.
  8. Continuous Improvement:Regularly review and assess the performance of projects, programs, and portfolios.Implement lessons learned to enhance future project management practices.

The choice of organizing projects depends on the organization’s structure, goals, and the complexity of its initiatives. Many organizations use a combination of these approaches to optimize project management and ensure the achievement of strategic objectives.

How projects relate to the components of programmes or portfolios.

Projects, programs, and portfolios are interconnected components in the realm of project management, each serving a distinct purpose and level of organizational management. Understanding how these elements relate to each other is crucial for effective project management. Projects are the basic units of work, and they are grouped into programs and portfolios to achieve higher-level strategic goals. Programs provide coordination and synergy among related projects, while portfolios focus on strategic alignment and resource optimization across multiple programs and projects. The successful delivery of projects contributes to the success of programs, and the success of programs, in turn, contributes to the success of portfolios, ultimately supporting the achievement of organizational objectives.Here’s a breakdown of how projects relate to the components of programs and portfolios:

  1. Projects:Projects are temporary endeavors with defined objectives, scope, and deliverables. They are executed within a specified timeframe and have a clear start and end date.
    • Role: Projects are the building blocks of both programs and portfolios. They are the individual initiatives undertaken to create unique products, services, or results.
  2. Programs:Programs are collections of related projects and activities managed and coordinated together to achieve strategic objectives that an organization cannot achieve through individual projects alone.
    • Relationship to Projects:
      • Aggregation: Programs aggregate multiple projects that contribute to a common goal.
      • Interdependencies: Projects within a program often have interdependencies, and the success of the program is contingent on the successful completion of its constituent projects.
      • Shared Resources: Projects within a program may share resources, and the program manager oversees the coordination of these resources.
  3. Portfolios:Portfolios are collections of programs, projects, or a combination of both that are managed and governed as a group to achieve strategic objectives.
    • Relationship to Projects and Programs:
      • Aggregation of Programs and Projects: Portfolios aggregate multiple programs and projects that align with the organization’s strategic goals.
      • Strategic Alignment: Projects and programs within a portfolio are selected and aligned to support overarching organizational strategies.
      • Resource Optimization: Portfolios involve strategic resource allocation and optimization across various programs and projects to maximize organizational benefits.

Interconnections:

  • Strategic Alignment:
    • Projects: Aligned with specific operational or departmental goals.
    • Programs: Aligned with broader organizational objectives and benefits.
    • Portfolios: Aligned with the highest-level strategic goals of the organization.
  • Management Level:
    • Projects: Managed at the project level by project managers.
    • Programs: Managed at the program level by program managers.
    • Portfolios: Managed at the portfolio level by portfolio managers.
  • Scope and Complexity:
    • Projects: Focused scope and relatively less complex.
    • Programs: Involve multiple projects with interdependencies, addressing complex challenges.
    • Portfolios: Encompass a mix of programs and projects, often spanning different areas of the organization.
  • Resource Management:
    • Projects: Resources are dedicated to the specific project.
    • Programs: Share resources among projects within the program.
    • Portfolios: Optimize resource allocation across various programs and projects.
  • Risk Management:
    • Projects: Risks are managed within the scope of the project.
    • Programs: Manage risks that impact the success of multiple projects within the program.
    • Portfolios: Focus on overarching risks that affect the achievement of strategic objectives.
  • Benefits Realization:
    • Projects: Deliver specific outputs or outcomes.
    • Programs: Aim for cumulative benefits derived from the collective success of constituent projects.
    • Portfolios: Seek to maximize overall organizational benefits through effective management of programs and projects.

The fundamentals of project management are the same in all situations, but a typical difference is how the project governance works, in particular the level of reporting and decision-making.

This is an important aspect of project management—the universality of its fundamentals contrasted with the variability in project governance structures. While the fundamental principles of project management are generally applicable across various situations, the specific mechanisms of governance, reporting, and decision-making can vary based on organizational culture, industry, project complexity, and other factors. While the core principles of project management are universally applicable, the governance structures, reporting mechanisms, and decision-making processes can vary based on contextual factors. The adaptability of project management practices allows organizations to tailor their approach to best suit their specific needs and circumstances.Let’s explore this distinction:

Universality of Project Management Fundamentals:

  1. Project Life Cycle: Projects typically progress through stages such as initiation, planning, execution, monitoring and controlling, and closure, regardless of the industry or organizational context.
  2. Scope, Time, and Cost Management: Defining and managing project scope, establishing timelines, and managing costs are fundamental aspects of project management applicable to any project.
  3. Risk Management: Identifying, assessing, and mitigating risks is a universal practice to enhance project success.
  4. Quality Management: Ensuring that project deliverables meet specified quality standards is a common objective in project management.
  5. Stakeholder Engagement: Engaging stakeholders, understanding their needs, and managing their expectations are critical aspects irrespective of the project’s nature.
  6. Communication: Effective communication is crucial for project success, encompassing internal team communication, stakeholder communication, and reporting.

Differences in Project Governance:

  1. Reporting Levels:
    • Low Complexity/Small Projects: In less complex projects, reporting may be more informal, with regular team meetings and updates shared among team members.
    • High Complexity/Large Projects: Larger projects or those in regulated industries may require more formal reporting structures, including detailed progress reports to higher levels of management and stakeholders.
  2. Decision-Making Authority:
    • Decentralized Decision-Making: In some organizations, project teams may have the authority to make decisions at the project level, especially in agile or matrix organizational structures.
    • Centralized Decision-Making: In other situations, especially in hierarchical organizations, decisions may need approval from higher levels of management.
  3. Project Governance Committees:
    • Presence of Committees: Larger projects or those within complex organizations may have governance committees, such as steering committees or project boards, overseeing major decisions.
    • Absence of Committees: Smaller projects may have more streamlined governance without the need for formal committees.
  4. Regulatory Compliance:
    • Highly Regulated Industries: Projects in industries such as finance, healthcare, or aviation may have stringent regulatory requirements, impacting governance structures and reporting.
    • Less Regulated Industries: Projects in less regulated industries may have more flexibility in governance practices.
  5. Project Manager’s Role:
    • Empowered Project Managers: In some organizations, project managers have a high degree of empowerment and autonomy in decision-making.
    • Limited Empowerment: In other contexts, project managers may have more constrained decision-making authority, with major decisions requiring higher-level approval.
  6. Project Size and Complexity:
    • Small and Simple Projects: Smaller projects with straightforward requirements may have leaner governance structures.
    • Large and Complex Projects: Larger projects, particularly those with high complexity, may necessitate more elaborate governance frameworks to manage risks and ensure alignment with organizational strategies.
  7. Cultural Considerations:
    • Organizational Culture: The overall culture of an organization can influence how governance is implemented, including the level of formality and centralization.

If a project is part of a programme or portfolio, its objectives and governance should be aligned with the governance of that programme or portfolio.

This is a fundamental principle in project management—alignment between the objectives and governance of individual projects and the higher-level governance of programs or portfolios. This alignment ensures that projects contribute cohesively to the broader organizational goals and strategies. Let’s delve into the key aspects of this alignment:

  1. Consistent Objectives:
    • Program and Portfolio Objectives: Programs and portfolios are established to achieve overarching organizational objectives. The initiatives within them, including projects, should align with and contribute to these higher-level goals.
    • Project Objectives: The objectives of individual projects within a program or portfolio should align with and support the specific goals of that program or portfolio.
  2. Strategic Alignment:
    • Program and Portfolio Strategy: Programs and portfolios are designed to implement strategic initiatives. Their governance structures ensure that projects collectively contribute to the strategic direction of the organization.
    • Project Strategy: Projects within a program or portfolio need to align their strategies with the overall strategy outlined by the higher-level governance. This ensures that every project contributes meaningfully to the desired organizational outcomes.
  3. Governance Consistency:
    • Program and Portfolio Governance: The governance framework for programs and portfolios defines how decisions are made, risks are managed, and resources are allocated at a higher level. This framework ensures consistency and strategic alignment.
    • Project Governance: The governance structures of individual projects should be consistent with the broader governance framework established by the program or portfolio. This alignment ensures coordination, transparency, and adherence to organizational policies.
  4. Resource Allocation:
    • Optimized Resource Allocation: Programs and portfolios often involve the optimization of resources across multiple projects to achieve maximum organizational benefit.
    • Project Resource Alignment: Projects within a program or portfolio should align their resource requirements with the overall resource allocation strategy outlined by the higher-level governance. This ensures efficient resource utilization and minimizes conflicts.
  5. Risk Management:
    • Integrated Risk Management: Programs and portfolios often include risk management strategies that address risks at a higher level, considering the interdependencies between projects.
    • Project Risk Mitigation: Projects align their risk management efforts with the broader risk strategies outlined by program or portfolio governance. This helps in identifying and mitigating risks that may impact the collective success of initiatives.
  6. Reporting and Communication:
    • Coordinated Reporting: Programs and portfolios typically require coordinated reporting to stakeholders at higher organizational levels.
    • Project Reporting: Individual projects contribute to this coordinated reporting effort by providing updates that align with the information needs of the program or portfolio governance.
  7. Change Management:
    • Integrated Change Control: Programs and portfolios often have change control processes at a higher level to manage changes that may impact multiple projects.
    • Project Change Alignment: Projects align their change management processes with the higher-level change control processes to ensure that changes are coordinated and in line with the overall organizational strategy.

By ensuring alignment between the objectives and governance structures of individual projects and the broader program or portfolio, organizations enhance their ability to achieve strategic goals cohesively. This alignment fosters collaboration, efficiency, and effective utilization of resources across the entire organizational hierarchy.

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Pretesh Biswas has wealth of qualifications and experience in providing results-oriented solutions for your system development, training or auditing needs. He has helped dozens of organizations in implementing effective management systems to a number of standards. He provide a unique blend of specialized knowledge, experience, tools and interactive skills to help you develop systems that not only get certified, but also contribute to the bottom line. He has taught literally hundreds of students over the past 5 years. He has experience in training at hundreds of organizations in several industry sectors. His training is unique in that which can be customized as to your management system and activities and deliver them at your facility. This greatly accelerates the learning curve and application of the knowledge acquired. He is now ex-Certification body lead auditor now working as consultancy auditor. He has performed hundreds of audits in several industry sectors. As consultancy auditor, he not just report findings, but provide value-added service in recommending appropriate solutions. Experience Consultancy: He has helped over 100 clients in a wide variety of industries achieve ISO 9001,14001,27001,20000, OHSAS 18001 and TS 16949 certification. Industries include automotive, metal stamping and screw machine, fabrication, machining, assembly, Forging electrostatic and chrome plating, heat-treating, coatings, glass, plastic and rubber products, electrical and electronic equipment, assemblies & components, batteries, computer hardware and software, printing, placement and Security help, warehousing and distribution, repair facilities, consumer credit counseling agencies, banks, call centers, etc. Training: He has delivered public and on-site quality management training to over 1000 students. Courses include ISO/TS -RAB approved Lead Auditor, Internal Auditing, Implementation, Documentation, as well as customized ISO/TS courses, PPAP, FMEA, APQP and Control Plans. Auditing: He has conducted over 100 third party registration and surveillance audits and dozens of gap, internal and pre-assessment audits to ISO/QS/TS Standards, in the manufacturing and service sectors. Other services: He has provided business planning, restructuring, asset management, systems and process streamlining services to a variety of manufacturing and service clients such as printing, plastics, automotive, transportation and custom brokerage, warehousing and distribution, electrical and electronics, trading, equipment leasing, etc. Education & professional certification: Pretesh Biswas has held IRCA certified Lead Auditor for ISO 9001,14001 and 27001. He holds a Bachelor of Engineering degree in Mechanical Engineering and is a MBA in Systems and Marketing. Prior to becoming a business consultant 6 years ago, he has worked in several portfolios such as Marketing, operations, production, Quality and customer care. He is also certified in Six Sigma Black belt .

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