How do you define a project a program
and a portfolio?
These are easy you might already know
the definitions. But do you know what's
the difference between a project, a
program, and a portfolio. Let's figure it
out.
Hey this is Praveen Malik from pmbypm.com
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In this video, I am going to talk about a
project, a program, and a portfolio with
the help of an example.
Stay tuned until the end of this video
and I will tell you the difference
between these three terms. Before you go
ahead please subscribe to this channel
and click on bell icon. This way whenever
I release a new video you will get an
instant notification. In our day-to-day
conversation we use the terms - project,
program, and portfolio almost
interchangeably without realizing that
there is a difference between them. But
there is. To understand the difference
let's look at the definition of
portfolio. The definition is project
programs subsidy portfolios and
operations manage as a group to achieve
strategic objectives. Now at the first
glance this definition might not make any
sense to you. But there's a reason for
this definition. The keyword here is
strategic objectives. A portfolio is run
to meet and achieve the strategic
objectives of a company. Let's take a
look at an example. Let's consider
consumer durable company which
manufactures and sells consumer goods
like AC, television, refrigerator, and
washing machines. Now the company itself
is a big portfolio. A portfolio just
means collection. Company as a whole has
a strategic the objective. The strategic
objective is to sell more units and make
more money for the shareholders. Let's
look at what is a program? The definition
is - Related projects, subsidy programs, and
program activities that are managed in a
coordinated manner to obtain benefits
not available from managing them
individually. Again this definition at
the first glance will not make any sense. But the keyword here is "related". So
let's revisit our example. So we had a
consumer
durables company. One of the divisions of
consumer durables company was television
division. Inside television division
there would be multiple departments like
development department, marketing
department. and manufacturing department.
A television division is a sub-portfolio
of the entire company inside the sub-portfolio
there could be multiple programs.
For example, let us say we want to launch
a new TV set next year. To launch a TV
set the development department, the
marketing department, and manufacturing
department, will coordinate with each
other. They will do multiple activities. The marketing department will give an
insight on what kind of TV set is
required. Development department will
create a prototype. Manufacturing
department will put it into production.
Marketing department will then create
promotions to launch the television in
the market. So all three departments will
work together to launch the new
television set. This coordination can be
considered as a program. Now let's take a
look at a project. A project is a
temporary and they were undertaken to
create a unique product service or
result. Now the keywords here are
"temporary" and "unique". Let's revisit our
industry example. So we were talking
about a company which is manufacturing
and selling television sets. Inside the
television division we had three
departments development department,
marketing department, and manufacturing
department. Let's only consider the
development department. The development
department will initiate new projects
for creating new TV sets, developing new
TV sets. Now you would have understood
the difference between portfolio program
and projects. At a company level a
portfolio looks like this. At the top the company itself is a
portfolio. It will have some sub-portfolio it could have programs and
projects and ongoing operations. Within
the portfolio and sub-portfolio there
could be programs.
The programs could have projects. The
projects within a program are related to
each other. But projects across different
programs are not related to each other. So when you are looking at the
difference between these three terms
remember this - portfolio means strategic
objectives, program means related
projects, and project means temporary and
unique. In my previous video, I talked
about flyover construction as a project. It
is not. It is a program. Let's look at the
benefits accrued from a project, a
program, and a portfolio. A project
creates a final product service or a
result. A program accomplishes the
program goal. A portfolio provides
organizational benefits like reduction
in cost, increase in profits, and good
return on investment. A question for you. Let's say - your goal is to become a
millionaire in next five years. Tell me
is it a project or a program? Please
comment below. I would love to hear your
answers. Thank you for watching this video.
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