Project/Program Portfolio Management (PPPM)
By PH Lohnes, PMP
The Program Level Perspective: Managing Resources.
The program level is likely the most difficult to manage since it has a relationship to its components: related projects for an efficiency gain, and its up link: the portfolio that is managed from an investment perspective. The program level, however, of the three levels is the one where education has the most impact, where experience is not the most important characteristics of the level manager. Please do not let your head explode when reading this before completing the entire blog. The program level is where I place and recommend that organizations place their least experienced project managers — those just out of graduate or business school, those just obtaining their credentials. While this seems backwards, you must understand the program level perspective in order to grasp this recommendation.
The perspective of the program level for its characteristics are (from a previous post):
- Focus on the tactical level of organizational activities
- Component utilization of the resource(s), i.e., HR, equipment, and material
- Objective is to manage resources across its projects and activities efficiently
- Goal is to manage the resources within the primary constraints of its components
Preceding the discussion of the program perspective, an understanding of the makeup or population of a program is necessary since at the engagements involved during my research period, the organizations did not understand how to assign projects and activities to a program. First, the program must be a collection of “related” projects and activities, not an eclectic “grab bag” of components placed under the management of highly compensated, so-called senior project manager. Efficiency is the watch word of the program, and only when related components are managed to increase the utilization of assigned resources does a program context make sense. Secondly, the program manager can be a less experienced project management resource since the necessary skills and knowledge to effect the benefits of a program can be learned in a classroom or seminar or self-taught venue. Management to resource efficiency is a matter of numbers not neurons.
Now, since the focus of the program level is from the tactical advantage point, a program manager is enjoined to make decisions that are best for the utilization of the organization’s resources applied or assigned to his/her program — not from an investment perspective (portfolio) or deliverables perspective (project). The program is in place to take advantage of economies of scale. An example is in order to help understand this concept:
Take a developer building a housing subdivision of say 50 homes built from 8 different floor plans: a very normal construction situation. Each of the 50 homes would constitute a project with a quality perspective — the production of “fit-for-use” deliverables while the overall subdivision would constitute the effective deployment of a program. Each project would be managed to optimize its schedule and budget while not limited by the impact their decisions would have on other projects: deliverables are the only focus for the project level manager. Thus it would make sense to have an electrician, plumber, and mason on tap to keep the project on schedule and budget; however, it would not be an efficient use of resources for the developer to have 50 electrical, plumbing, or masonry contracts. Here is where the program manager would stage the 50 projects to multiplex the three crafts across the 50 projects producing the efficiency of resource utilization that programs should be focused upon delivering.
Achieving the objective of resource efficiency involves all project resources not just the human capital type; however, the effective management of the human resource components of a program would be enough of a valid effort to justify the management of just these important project resources. The program manager must manage the projects against all the primary constraints with the quality constraint being the preview of the project level (discussed in the next blog post).
Finally, the goal of the program level to is to achieve its objective of resource efficiency within the framework of the primary constraints of scope, cost, time, quality, and risk. These management principles are the backbone of many industry project management bodies of knowledge, and can be effectively taught and applied without the necessary experience needed by either the project or portfolio manager. The program manager is recommended be where the least experienced project management personnel should deployed until they begin to gain the executional experience needed to be an effective project level manager.
Thus, the program level aligns with its portfolio in that one of the most effective methods for managing investments and maximizing the benefits is to reduce the inefficiencies of resource utilization. This reduces the overall cost of the portfolio investments thereby increasing the benefit/cost ratio or an excellent proxy for a return on investment (ROI) measure of the overall portfolio performance.
The program level perspective therefore is focused on the tactical utilization of assigned resources towards the maximization of efficiency within the primary constraints demanded of the program components.