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PROGRAM CONSOLIDATION OF PMBOK PREDICTIVE ANALYTICS (PPA)
Dr. Ralf Müller
Umeå School of Business and Economics
Proceedings of the PMI Research Conference 11-14 July 2004 – London, UK
This paper describes the results of a first qualitative investigation into the roles and responsibilities of program and portfolio managers in the industry, which will be followed by a global, quantitative study. The particularities in business perspectives of the two management roles are identified in this paper and related to the empirical, qualitative results of a series of interviews. In their individual context of program or portfolio management the two roles include effectiveness and efficiency improvement tasks, as well as coordination activities from the initiation to the closeout of projects and programs. Portfolio manager roles were found as aiming for shareholder value and achievement of annual plans through economic resource usage. Program managers’ roles focused on the economic and integrative planning of programs, thereby creating stakeholder value through accomplishment of time and budget objectives in their programs. Quality was delegated to the project manager level. The paper outlines the details of the managers’ roles for the achievement of these objectives. The results are then related to the broker and steward model for governance in project-based organizations.
There is considerable confusion about the application of the terms multiproject management, program, and portfolio management. They are often used interchangeably. Multiproject management applies to the management of several smaller and often unrelated projects (Archibald, 2003), whereas program and portfolio management applies to groups of projects that share some sort of commonality (Pellegrinelli, 1997). The extend of confusion around the use of these terms has led the Project Management Institute (PMI®) to recommend that discussions about these topics are to be preceded with a definition of terms (PMI, 2000, p. 10).
Over the past decade project management related literature gradually improved the distinction between project, multiproject, program, and portfolio management. While often used interchangeably in older publications, the concepts of program and portfolio management are increasingly seen as two different means to manage groups of projects. Here program management takes into account the interconnectedness of the various project objectives in order to maximize accomplishment of combined project outcomes. This has led to definitions of programs as groups of projects, managed together to obtain benefits not available from managing them individually (Maylor, 2003; PMI, 2000; Turner & Müller, 2003).
Portfolio management is concerned with groupings of projects along the interrelatedness of their management requirements. This is done to maximize an organization's overall business results through economic use of resources across a group of projects. Here a portfolio is defined as: “an organization (temporary or permanent) in which a group of projects are managed together to coordinate the interfaces and prioritize resources between them and thereby reduce uncertainty” (Turner & Müller, 2003, p. 7), managed through “selection and support of projects or program investments. These investments in projects and programs are guided by the organization's strategic plan and available resources” (PMI, 2000, p. 10).
Past research on portfolio management focused mostly on the management of R&D portfolios. Results show that firms apply three different practices for the management of portfolios. These are (a) maximizing the value of the portfolio by aiming for largest returns on investment (ROI), (b) balancing the risks of the various projects in the portfolio, similar to investment funds, and (c) selecting only projects linked with the organization's strategy (Cooper, Edgett, & Kleinschmidt, 1997, 1998, 2000, 2002). The industry's increased use of project-based organization structures as a means to accomplish corporate objectives has led to the application of portfolio management techniques in new areas such as customer-delivery projects, as well as for shorter and less capital-intensive projects. Portfolios with these projects are managed differently. Here factors such as project size and priorities are taken into account, which leads to different approaches in managing (e.g., portfolios for large and small projects).
Even though program and portfolio management are frequently described in the literature, there is no clear evidence of best practices of practitioners in program and portfolio management. In its continuous effort to improve project management and the related practices of program and portfolio management, PMI has launched a research project on: What are the roles and responsibilities of successful program and portfolio managers?
Results will allow practitioners to improve program and portfolio results for the benefit of their organizations, the economy, and ultimately the society.
This paper provides the first results in a series of papers on roles and responsibilities of program and portfolio managers. The aim of this paper is to analyze the differences in the roles of program and portfolio managers in the industry. For that the next chapter summarizes the current literature on program and portfolio management, followed by a description of the methodology used and the first results. This is followed by a description of the further steps involved in carrying out this study.
Project Portfolios and Their Management
Project portfolios provide common frameworks for management to compare and decide on investments from a variety of possible projects. Originally developed by General Electric/McKinsey and Boston Consulting Group (BCG) were early portfolios that showed a business’ competitive position and market prospects in a matrix or grid, with different positions demanding different marketing strategies for a business (Goold & Luchs, 1996). Over time the technique proved to add value to corporations by guiding the decisions for selection and resource assignments in research and development (R&D) projects, where project management methods were used to do projects right and portfolio management was used to do the right projects (Cooper, Edgett, & Kleinschmidt, 2000). With the increasing use of projects as a means to deliver products and services the use of portfolios for the management of resource-interrelated projects has increased. Here portfolio management techniques guide an organization's management decisions and prioritization for resource assignments across projects (e.g., to maximize economic value, “firefight” troubled projects, minimize risk or maximize a project's long-term ROI).
Related research and literature was found to address three distinctive perspectives, which are:
Portfolio definitions and associated project selection techniques;
Planning and management of project portfolios;
Competencies for portfolio management.
The next three sections address these perspectives.
Portfolio Definitions and Associated Project Selection Techniques
The “right” set of projects in a project portfolio determines a company's future or market growth over time (Wheelwright & Clark, 1992). By looking at a case from the manufacturing industry, the authors recommend to classify projects by the degree of change in the product and the degree of change in the manufacturing process. That allows classification of portfolios in those for:
Derivative projects, which are those involving only minor product and process changes;
Platform projects, with medium levels of change involving development of next generation products and processes;
Breakthrough projects, with highest levels of change through new core processes and products;
R&D projects, which are outside the commercial project groupings listed above, but develop the know-how and know-why of new materials and technologies that eventually translate into commercial development.
Wheelwright and Clark (1992) recommend plotting the projects of an organization in a graphical representation of this classification, then to estimate the desired mix of projects by assessing the resource needs and resource capacity, and subsequently decide on the specific projects to pursue with the existing resources. That allows for decisions on the types of projects to accept, decline, or eliminate in order to balance the strategic mix and a steady stream of projects in an organization. Furthermore, the approach helps to identify the need for future capabilities and development, as well as appropriate training and career programs.
A series of empirical research studies by Cooper, Edgett, and Kleinschmidt (1997a, 1997b, 1998, 2000, 2002) showed that portfolio management in R&D organizations is often performed by keeping an updated list of new and current projects that allows for evaluation, selection, and prioritization of new projects, as well as for acceleration, re-prioritization, or change in resource allocations in exiting projects. By doing this, companies pursue at least one of three goals:
Maximizing the value of the portfolio. This is achieved through various techniques, such as financial models or scoring models, and aim to maximize the desired objectives of the portfolio. This can range from maximizing the commercial value of the portfolio at the given resource constraints (e.g., by using net present value (NPV) or other measures for ROI. These approaches allow for automation of the decision-making processes (e.g., through decision support systems that collect the required data from the respective organizations, process them and prioritize projects as well as automate the resource allocation process (Iyigün, 1993). ROI methods are often criticized for being too number-focused and not taking into account strategic or other nonfinancial aspects. Other methods use predeveloped criteria to score and finally rank projects to identify those of highest priority. These methods lack acceptance, partly due to poorly crafted or outdated criteria, leading to disuse of the models.
Achieving the right balance and mix of projects. Analogous to an investment fund these portfolios balance risk (or other key parameters) to arrive at the perceived optimum for a balanced portfolio. To visualize the result individual projects are plotted in various grids that show the portfolio's balance in dimensions such as strategic fit, risk/return, long-term durability, reward, time to completion, competitive impact, etc. Similar to the maximization techniques described above the balance models are criticized for relying too much on financial data or sometimes unreliable data, as well as a lack of guidance on the “right” balance to be achieved.
Portfolios for linking strategy with projects. This addresses the fit of projects with the corporate strategy, as well as the degree project spendings reflect the corporate strategy. It is achieved either by incorporating strategic criteria in the Go/No-go decisions for projects or by defining funds for different types of projects aligned with the strategy. This method ensures the spending is aligned with the strategy. These techniques are criticized for being too time consuming and somewhat hypothetical as it requires to split resources in the absence of real projects.
A popular method to identify projects that do not or no longer fit into a portfolio is through use of stage gates for project exclusion. This is done by providing an organization's management with certain sets of information at predetermined stages in projects, so that they can decide on the continuation or cancellation of individual projects. Companies using this method showed higher success rates on launch, sales, and profit of their new products (Cooper, Edgett, & Kleinschmidt, 2000).
By looking at all projects in an organization (not only R&D) Kendall and Rollins (2003) recommend to develop portfolios through a three-stage process, which starts by ranking the projects and displaying them by their NPV, risk, internal/external orientation, and originator. The second step involves a ranking by each project's contribution to the sum of benefits from all projects. The third step involves identification of the strategic resource (i.e., the resource that more than any other determines how many projects a company can complete, and then use NPV to identify those projects with highest return for every work week of the strategic resource.
In a related approach Kerzner (2001) recommends to graphically display the portfolio of projects in a grid that outlines the project phases and the quality of resources required. A project is displayed as a circle at the interconnection of phase and resource quality needs. The size of the circle shows the estimated benefits from the project, and a pie chart within the circle shows the percentage completed of the project so far.
These techniques allow for identification of eligible projects for a portfolio. How the portfolio is managed once the projects are selected is addressed in the next section.
Planning and Management of Project Portfolios
A joint management of the portfolio by a team consisting of project managers and line managers (as resource owners) of a portfolio's projects is recommended by Platje, Seidel, and Wadman (1994). This portfolio management team uses the individual project plans as input to develop a feasible (re)allocation plan for resources across the projects in the portfolio. The implementation of this plan is periodically checked and adjusted if necessary. Through that the authors claim to establish stability in both contents and process of the portfolio. Using examples from several industries Turner and Speiser (1992) identified the information requirements for portfolio-level planning by showing four different information systems needed for a synchronized planning at portfolio, program, and project level. These are resource plans, work-package plans, resource schedulers, and team schedulers. Here work-package plans are passed from the project managers to their portfolio managers for overarching resource planning. Work is then assigned to single disciplines using a resource scheduler or to multidisciplinary teams using a team scheduler.
A more dynamic model for managing R&D portfolios was developed by the Defense Metallurgical Research Laboratory in India (Gokhale & Bhatia, 1997). Here project portfolios are managed on two levels simultaneously (i.e., at the project level the methodology and goals are only fixed for a period of approximately three months, then results and methods are reviewed and if necessary revised). From a portfolio perspective all projects are fit into three-month time slices, which allow for reallocation of resources at the end of each time period. The system supports a dynamic approach to the management of projects, while keeping the overall time frame, objectives, and monitoring system constant. Through that approach the system supports mainly projects with clearly defined objectives and less well-defined methods to achieve these objectives (Turner & Cochrane, 1993).
The managerial problems in business development portfolios were identified by Elonen and Artto (2003) by assessing two portfolios and relating them to findings in the literature. The results identified six major problem areas:
Inadequate portfolio-level activities (e.g., through improper implementation of preproject stages and infrequent progress monitoring);
Lack of resources, competencies, and methods (e.g., through inadequate methods for portfolio evaluation, lack of resources, or too extensive composition of steering groups and teams);
Lack of commitment, unclear roles and responsibilities (e.g., at project level, but also between portfolio managers and other organizations, as well as lack of management support);
Inadequate portfolio-level activities (e.g., through overlapping tasks within and among portfolios, weak decision-making, and reluctance to kill projects);
Inadequate information management regarding information about projects and its flow across the organization;
Inadequate management of project-oriented business (e.g., through low prioritization of projects, lack of project-business strategies, frequently changing roles, responsibilities, and organization structures).
The study shows the need for more clarity about portfolio managers’ roles and responsibilities and the strength in implementation of portfolio management practices in organizations. It also showed that many of the problems encountered in real-life portfolio work were not addressed in the current literature, thus a need for empirical research in the realities of portfolio management exist.
The last group of portfolio management literature addresses the competencies of project-oriented companies.
Competencies for Portfolio Management
Using a multimethod approach Gareis (2000) investigated portfolio management competencies, which were aligned with the optimization of the entire portfolio and not the individual project objective. Gareis identified the need for portfolio management as an integrative function to manage the dynamics of project-oriented companies. Responsibilities of portfolio management identified in this study include invitation of participants for portfolio coordination, distribution of information material, as well as steering committee and project meetings. The study also showed that program and portfolio management are distinct activities emerging in organic organizations with empowered and process-oriented employees.
Reviewing portfolio management literature showed little guidance on the roles and responsibilities of portfolio managers. The next section reviews program management literature from the same perspective.
Programs and Their Management
Recent literature describes program management (as defined in the introduction section) to be connected with, albeit different from, portfolio management (e.g., Lycett, Rassau, & Danson, 2004; Turner & Müller, 2003). Program management is often perceived as the top layer of a hierarchy consisting of individual projects (Kerzner, 2001). Goals of program management are in the improvement of efficiency and effectiveness through better prioritization, planning, and coordination in managing projects (Pellegrinelli, 1997), as well as the development of a business focus by defining the goals of individual projects and the entire program along the requirements, goals, drivers, and culture of the wider organization (Lycett et al., 2004). The literature on program management can be classified into three categories:
Program management as an entity for organizational structure;
Program management life cycles;
Competence for program management.
Each of the three categories will be described next.
Program Management as an Entity for Organizational Structure
In this part of the literature program management is often described as the next higher organizational hierarchy level over project managers. Program managers at this level are often described as the interface between higher management and operational-level execution of a firm's tasks. A project manager's pivotal role is to link upper management's strategy with their operational implementation through projects in the most economic way. Given their organizational position program managers actively set the context for projects and project managers to operate, thus set their operational framework (e.g., Pellegrinelli, 2002).
An approach to manage the organization of projects within a program was developed by Levene and Braganza (1996) from two case studies. Their ready-to-be-tested concept used program management to overcome the problems of business process reengineering projects. These projects often suffer from a lack of focus and senior management involvement, as well as from isolation as “one-off” projects. Levene and Braganza suggest increased awareness of the interfaces between project outcomes in a program and a simultaneous tracking and planning of the program. By implementing planning steps on a “rolling wave” basis the outcomes of projects in a program can be interlinked and a more realistic and feasible plan developed.
In a theoretical paper Gray (1997) describes a continuum of hierarchical management structures for programs. This spans from loose programs, such as multiproject groups managed under a single project management umbrella with little control and empowered project managers, to highly controlled projects that are a function of the project management planning activity and controlled by the program manager and the program stakeholders. Gray suggests choosing a management structure depending on desirability and feasibility of either approach. Thereby a decision on the desired approach should be taken on the basis that management structure yields the most beneficial outcome of the program, and what management structures are in fact doable for the organization running the program.
Program Management Processes and Life Cycles
Due to the close link between projects and programs the processes of both concepts are often described as being similar in nature, albeit different at the detailed level. Along the definitions in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (PMI, 2000) program management processes are often described as a sequence of steps (e.g., PMI, 2003; Lycett et al., 2004; Thiry, 2004) for:
Initiation or identification (definition of objectives and scope, scope initiation, establishing of support structures);
Planning or definition (refinement of objectives, project and program plan development);
Executing (monitoring progress and aligning program with business and benefits goals);
Controlling (performance, change, quality, and scope control);
Closing (administrative closure and ensuring benefits delivery).
However, PMI (2003, p. 127) states that these steps are most likely helpful but not complete explanations of the program management processes.
Thiry (2004, p. 252) identifies in a theoretical paper a program life cycle along a hierarchy of projects, programs, and strategy:
Formulation (sense making, seeking of alternatives, evaluation of options, and choice);
Organization (strategy planning and selection of actions);
Deployment (execution of actions—projects and support, operational activities, and control);
Appraisal (assessment of benefits, review of purpose and capability, and re-pacing, if required);
Dissolution (reallocation of people and funds, knowledge management, and feedback).
Thiry (2004) describes the activities related to the execution stage of the program as assessment and management of the environment, communication, and identification of emerging challenges. That includes focus on interdependencies of projects, program managers’ level of intervention in assessing major deliverables, and the output-input relationship of projects in the program, as well as audit and gateway control.
During the control phase of a program Thiry (2004) defines the activities in assessing the need for plan reviews and changes, consideration of key performance indicators against deliverables, and decisions to continue, realign, or stop projects.
The competences required for program-level activities are described in the next section.
Competence for Program Management
Based on a case study in a large global consultancy Pellegrinelli, Partington, and Young (2003) identified a framework of program management competences. This consists of four levels of competencies with 17 attributes grouped by three groups of relationships that are to be managed. These relationships are those between the self and the work, the self and others, as well as between self and program environment. The four levels represent an increasingly widening view from focus on details only to appreciation of contextual and future consequences. Lower levels entail the understanding of the details and the relationships between activities. The next level works at a summary level without getting swamped by details. The third level entails the understanding of the entire program plus activities to understand the issues and outcomes for key stakeholders. The highest level holds an overall view of the program and selected details, and appreciates the impact of program decisions and actions outside the program as well as potential future consequences.
In line with many other authors Pellegrinelli, Partington, and Young (2003) identified a major difference in the requirements for project managers and program managers. Here the former should be more focused on strict planning, management, and solving of technical issues, whereas the latter should be increasingly tolerant for uncertainty, more embracing for change and more aware of the wider business influences. Therefore, program managers need to be better improvisers than implementers of structural approaches (Pellegrinelli, 2002).
The Perspectives of Project, Program, and Portfolio Managers
Program and portfolio management are seen as distinctive approaches to management, mostly described as coexisting in organizations due to their effect of balancing different perspectives toward managing project-based organizations. A project can be simultaneously managed as part of program or portfolio (Archibald, 2003). So its management is not exclusively a domain of the project manager. Aspects of goal or economic optimization from a wider organization view are likely to influence the planning and execution of projects. Using the classification of projects by their nature as temporary organizations (Turner & Müller, 2003) we can now identify the different perspectives of project, program, and portfolio managers toward a project- and project-oriented work in organizations. These are:
Perspectives of project, program and portfolio managers on the nature of the project
Exhibit 1. Perspectives of project, program and portfolio managers on the nature of the project
Project managers therefore use their project to bring about change in an organization or develop a new product. A project approach is used to manage the inherent uncertainty. Program managers perceive projects as temporary organizations and production functions for the accomplishment of higher-level goals. Finally, portfolio managers perceive projects as an agency to utilize an organization's resource in an efficient way.
Looking at the combined roles of project managers, program managers, and portfolio managers described in the literature above it shows that:
Project managers focus on the quality aspects of each stage, such as the quality in planning, development of products, and capturing of knowledge.
Program managers are more concerned with the individual project's fit in the overall program along the timeline and the overall fit with the permanent organizations strategic objectives.
Portfolio managers are mostly concerned with the economic assignment of resources across the various projects.
This reflects the well-known objectives of quality, time, and costs (focused on by project manager, program manager, and portfolio manager, respectively) at the level of the permanent organization, thus indicating the projectization of organizational structures (see Exhibit 2). The alignment of roles with the organization can therefore be described with the project manager being the representative of the project, and the portfolio manager as the representative of the permanent organization, with the program manager bridging the two organizations through the sum of projects going on in a program in order to achieve the organization's objectives.
Organizational perspective of project, program, and portfolio manager and the link to permanent and temporary organization
Exhibit 2. Organizational perspective of project, program, and portfolio manager and the link to permanent and temporary organization
The literature review above provided insight into the differences between programs and portfolios, as well as the different business perspectives required for the two roles. However, it did not provide a clear understanding of the roles and responsibilities of these managers. That will be addressed in the rest of the paper. In the next section the method for a first inquiry in the roles and responsibilities of program and portfolio managers are described.
The inquiry into roles and responsibilities is done using a multimethod approach. It starts with a qualitative inquiry using a series of interviews. This is done to identify the context and practices in assigning roles and responsibilities to program and portfolio managers. The qualitative approach follows Yin's (1994) methodology for case-study research. Using a grounded theory approach (Glaser & Strauss, 1967) the roles and responsibilities of the two groups of managers will be identified by continuous comparison of interview results. The results from this assessment will be described further on in this paper. In a future step the findings from the qualitative assessment will be empirically tested using a large-scale survey and a quantitative assessment. This sequential multimethod approach will allow for credible results through the use of qualitative and quantitative methods, which together provide for highest levels of generalizability and existential realism (McGrath, 1982). The qualitative inquiry was started with a series of eight interviews with program and portfolio managers in different industries and geographies.
Industry, company, country, and role of interviewees
Exhibit 3. Industry, company, country, and role of interviewees
Semistructured interviews were held as face-to-face meetings and telephone calls. The interviews were tape recorded for subsequent analysis.
The persons interviewed had different roles and titles in there organizations, and titles varied from project manager, director of project management R&D, total project manager, office manager, department manager, product manager, director of project management office, development manager to vice president. The grouping of individuals in program or portfolio managers was based on the individual's tasks in an organization. One example is the project manager for a railway construction project with a budget of $430 million U.S. dollars, a duration of five years and with more than 25 larger subprojects. This person was labeled as a program manager due to the complexity of the undertaking with a number of larger and smaller projects that together make one large program deliverable. Another is the department manager who runs a number of projects to develop and maintain an IT system for a client. In this program both the number of projects as well as the projects duration was smaller compared to the railroad case. Here the two roles of program and a portfolio manager were intertwined. In this case the person's activities were sorted according to the profile of either program or project manager. Generally, the interviewees’ activities (what and how of their work) classified their role. Criteria used by their managers to evaluate the interviewees’ program or portfolio were classified as the interviewees’ responsibility.
Portfolio Manager Roles and Responsibilities
A portfolio of projects was defined as a group of projects managed to meet strategic business objectives. Analysis of the interviews showed patterns in responsibilities, roles, and tools used. These are described in the following.
Portfolio manager activities are done both before and after a single project or a program is started. These activities are grouped in the three categories of effectiveness, coordination, and efficiency (see Exhibit 4).
Roles of portfolio managers
Exhibit 4. Roles of portfolio managers
Prior to involvement in project-related activities portfolio managers perform business planning and resource planning activities in relation to the organization's annual plan. Upon identification of new projects they engage in project selection activities, which differ by the nature of their organization. R&D organizations evaluate upcoming projects against a set of predetermined criteria (e.g., the product roadmap, resource availability, or customer priorities), and either accept, change, or reject a project for entering the portfolio. Customer delivery projects are assessed against strategic parameters such as profit margin or strategic value of the business before they are accepted. That ensures doing the right projects (i.e., achieve effectiveness in managing the portfolio of projects). Coordination of activities as well as tasks to improve portfolio efficiency are subsequently started. Resource procurement and continuous project plan reviews for changes in resource requirements are completed in order to match resource availability (e.g., contingent on other projects) with resource needs of the new project. This continues throughout the execution of the project with every change in resource requirements caused by any one of the projects in the portfolio. Once the new project is in the execution stage fixed interval reporting is used to identify troubled projects and to trigger remedial action or cancellation of the project. Throughout the execution stage of projects portfolio managers participate in internal steering group meetings, where they disseminate portfolio-related reports, which are aggregations of project reports, and determine project prioritizations in collaboration with other members of the steering group. For those projects that are identified as being inefficiently managed portfolio managers initiate reviews, coach project managers, or handle issues otherwise. For efficiency improvement they are engaged in overall process improvement activities of their organization.
These activities are performed using a wide set of tools (e.g., aggregated Red / Yellow / Green reports accumulated from individual project reports into an overall list of risky projects and their potential impact on business results). Other tools used are time and cost information from enterprise resource planning (ERP) systems, profit and loss statements, as well as product roadmaps and strategic plans.
The common responsibility of portfolio managers is the leveling of resources across projects with the objective of maximizing the economic use of resources within a portfolio. Furthermore, they are often responsible for achieving financial objectives in managing their portfolio (e.g., by lowering the negative financial impact of troubled projects). Through their responsibilities for financial results in relation to the annual business plan they become indirectly accountable for shareholder value. Even though traditional project performance indicators for projects within a portfolio are important for the portfolio manager but often dealt or delegated to program managers and project managers.
Program Manager Roles and Responsibilities
A program was defined as a set of projects managed together to achieve a higher-level common objective, not achievable by any one of the projects alone (Müller & Turner, 2003).
The analysis of program manager roles identified a series of commonalities with the role of portfolio managers, albeit with a different perspective (see Exhibit 5). While portfolio managers aim to maximize the intended results for their organization and their annual report across all projects in a portfolio, the program managers intent to maximize the results for the achievement of their program's objective. Due to the temporary nature of their programs they take a more short-term stance toward the business when compared with the long-term view of the portfolio manager.
Roles of Program Managers
Exhibit 5. Roles of Program Managers
Similar to portfolio managers the roles of program managers differ substantially between ex-ante and ex-post actions in project execution. Effectiveness in the ex-ante stage is achieved through identification of appropriate business opportunities, which is followed by coordination of activities for resource planning and identification of synergies between projects to lower overall efforts or maximize results otherwise. In parallel with developing the optimum program plan the selection of appropriate resources starts in order to staff projects and allocate potentially critical resources. During the execution of projects the activities are similar to the ones of portfolio managers, but performed in the context of the program (not the portfolio). That includes identification of bad projects within the program in order to start remedial actions, which are listed under efficiency improvement and comprise triggering or performing project reviews, coaching project managers, or taking over issues that are escalated from the project level. Throughout the execution of projects in the program the program manager participates in customer steering group meetings where aggregated reports are disseminated and overall program governance takes place. Coordination activities between the individual projects take place within and outside of these steering groups in order to improve program execution. Continuous improvement of existing processes and procedures is a typical task for program managers.
These activities are performed using tools that aggregate project information, such as aggregated project plans using MS project, or spreadsheets/databases for skills per person and people per project. Programs with a larger number of subcontractors also benefit from a subcontractor database that integrates these functions.
Responsibilities common among program managers are foremost planning activities, including milestones, risk plans, and a master plan for their program. Furthermore, they are responsible for the time and budget objectives of their program, the delivery of the contracted results or end product, as well as the relations with the program's stakeholders.
The findings about the roles of program and portfolio to transfer and merge knowledge between different interests in a network of internal and external relations managers resemble the broker and steward model, which was empirically developed by Turner and Keegan (2001). Their investigation in governance mechanisms in project-oriented firms identified two distinct roles, independent of the mix of large and small customers or projects in a firm. The roles are described as an extrovert, entrepreneurial broker who builds and maintains the relationship of a supplier organization with a client. Brokers typically have sales and account manager titles and serve as an ambassador for the selling firm and resource investigator of the client firm. During the interviews for the present study many program managers mentioned that they are part of a sales organization and involved in bidding for and winning new projects, thus perform part of the brokering role. The steward's role is to put together the network of resources to deliver the project. Similar to the description of the portfolio manager role stewards ensure the availability of the right person at the right place and time taking into account the long-term objectives of the supplier and the interaction with neighboring projects and their resource needs. The project manager then manages the process to deliver the project. That also reflects the perspectives outlined in Exhibit 2. But why are these two distinct roles? In an attempt to answer this question for their broker and steward model Turner and Keegan (2001) argue that the broker has to adapt to the external culture of the customer, whereas the steward adapts to the internal culture of the resource pool. That is equally important for the program and portfolio manager role and adds to the justification for having two distinct roles.
The first results from an investigation into the roles and responsibilities of program and portfolio managers showed that both positions share a variety of commonalities in the roles, but differ in their perspective and context. While portfolio managers focus on the annual results for their organization, program managers focus on the maximization of results related to the contract or program objective. To that end portfolio managers are ultimately responsible for the overall financial results of the organization, while program managers are the highest-level instance for time commitments in programs. Responsibility for quality in the deliverables was found to be delegated to the project manager. The two managerial roles are rarely found in a pure form. Especially in smaller organizations the managers often have additional responsibilities such as department or product management. Differences within each of the managerial groups were found in the extent managers were responsible for program or project results, hiring of personnel, or managing staff reporting directly to them. The larger number of interviewees was in staff positions (i.e., without direct reports). Especially these cases highlighted the integrative task of program and portfolio managers in linking the different organizational entities into a cohesive whole. The nature of a program or portfolio as a cross-organizational grouping of projects puts the program and portfolio managers at the interface of otherwise separated organizations. Through that their role becomes one of organizational integrator, potential escalator of issues across organizational boundaries, coordinator of resources, and consultant to management teams in various organizations. Examples are geographically organized marketing organizations (e.g., one in Japan, which was linked with R&D in North America, at the same time it was linked with industry specialists, production management and the functional line organization in the global Headquarters, all in different countries). Program and portfolio managers are pivotal in establishing these cross-organizational links by enabling the potential for synergies in wide and diversified organizations.
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