A program is a group of interrelated projects, subsidiary programs, and program activities that are managed in a coordinated way to obtain benefits not available from managing them individually.
Program management is often confused with Portfolio management. The main difference is that a program has a defined end point, since it is a series of related projects each with defined end points, whereas portfolios include operational (ongoing maintenance of an asset) activities and hence doesn’t necessarily have a defined end point. For example, staging the Olympics is a program (specific end) whereas a series of government highway paving projects are a portfolio (no end).
Programs are defined by benefits and components:
- Programs attempt to achieve benefits
- Benefits are achieved through the execution of program components (projects or sub-programs).
Naturally, the success of a program is measured based on whether, and to what extent, the benefits have been achieved.
As defined by the Project Management Institute (PMI), programs attempt to achieve benefits through the application of five performance domains:
- Strategy alignment
- Benefits management
- Stakeholder engagement
- Life cycle management
Program Strategy Alignment ensures that the program is aligned with the corporate strategy of the organization, which is normally defined in a vision and mission statement. This includes five components:
- Business Case
The business case is used to justify the organization’s investment in the program. It itemizes the expected costs and the expected return on investment. It includes financial metrics, cost benefit analysis and capital budgeting methods to justify the expenditures.
- Program Charter
Similar to a project charter, the program charter formally authorizes the program and assigns the program manager. It provides the program manager the authority to use organizational resources to carry out the program.
- Program Roadmap
The program roadmap is a chronological representation of the program’s intended direction. Similar to a gantt chart, it graphically depicts the program components in a timeline format. It provides a general overview of the program components that will be used to achieve the program’s benefits.
- Environmental Assessments
The program continually assesses the environment in which it operates, for example market demand, funding, health & safety, regulatory, and political.
- Program Risk Management Strategy
The risk profile of the program is analyzed to ensure it aligns with the risk tolerance of the organization.
In formal terms, a Program Sponsor issues a document called a Program Charter, which creates the Program and authorizes a Program Manager to utilize organizational resources to carry out the program so the organization can realize its intended benefits.
Benefits management refers to the management of the specific benefits that the program is attempting to achieve. This is done in five steps:
- Benefits identification
A benefits register is created to identify and describe the benefits that the program is attempting to achieve.
- Benefits analysis and planning
The benefits are prioritized, and performance indicators are established to measure the achievement of benefits.
- Benefits delivery
Once the first program component is complete, benefits begin to be realized. The program accepts the project deliverables and assists with project closure activities.
- Benefits transition
The benefits usually require transition to an operation and maintenance state. A separate operations group assumes the ongoing operational management and expenses.
- Benefits sustainment
Upon close of the program, the benefits must be transitioned to an operational entity.
Thus, benefits management ensures the stakeholders are focused on the benefits of the program.
All programs have stakeholders. As a minimum, the program sponsor is a stakeholder who is employed by the parent organization and accepts its benefits. But most programs have many more stakeholders with substantially varying interests and management requirements.
Stakeholder engagement consists of the following 5 parts:
- Stakeholder identification
A stakeholder register identifies all of the stakeholders who have either power over, or interest in, the program.
- Stakeholder analysis
An analysis of the stakeholders determines what the level of their power over, or interest in, the project really is. Many stakeholders are similar and fall into groups. Also, the specific needs and requirements of each stakeholder are determined to ensure each stakeholder (and group) is well understood.
- Stakeholder engagement planning
Once each stakeholder is well understood, an engagement plan specific to each one is determined. There are no one-size-fits-all engagement strategies – each stakeholder must be given individualized attention, although stakeholder groups could be treated similarly.
- Stakeholder engagement
The stakeholder engagement plan is carried out.
- Stakeholder communications
Examples abound where projects were considered a failure due to the inadequate consultation of one key stakeholder, even though all technical requirements were fulfilled. Hence, the stakeholder communications are an integral part of ensuring a successful program.
Hence, strong stakeholder engagement results in high likelihood of program success, and the culture of stakeholder engagement is passed down into each program component as well.
Program governance is the domain that establishes roles and responsibilities in decision making. It specifies who gets to make decisions with respect to adding, terminating, or changing program components, and the boundaries in which those decisions are made.
These boundaries are established via three components:
- Governance practices
The program governance plan describes the systems and methods to be used to monitor, manage, and support the program. Program success criteria are identified and interim reporting requirements specified. The monitoring and controlling function is established to ensure the program stays on track.
- Governance roles
Although multiple roles can be fulfilled by the same person, the basic program roles are:
- Program sponsor is the person immediately above the program, within the parent organization. They manage its funding levels and accepts its benefits.
- Program steering committee is a group of participants representing various program-related interests, typically executives from various groups that support the program’s components and operations.
- Program Management Office (PMO) is a centralized place for program management support.
- Program manager is the program leader who is directly responsible for achieving the program’s benefits.
- Project managers manage individual component of the program.
- Other stakeholders like executives, project teams, end users of a product, regulatory agencies, and so forth.
- Governance design and implementation
Each governance component is designed specifically for the program. For example, programs that are significantly influenced by changing legislation might benefit from a governance structure that involves direct interaction with the legislative authorities.
Life Cycle Management
The program life cycle is managed to achieve and maximize the benefits. Life cycle management includes two parts:
- The Program Life Cycle
Programs have three phases:
- Definition consists of defining and authorizing the program. It also includes the planning stage where program success criteria are developed. Benefits are defined. Program scope, timelines, and resources are determined. Stakeholders and risks are analyzed and program governance is established.
- Delivery consists of executing the various components of the program.
- Closure is the activities needed to complete the program.
- Program Activities and Integration Management
Unlike projects, programs must coordinate and sequence components which are interrelated. The information flow requirements between components are often complex. Quality standards, stakeholder engagement, software tools, and many other moving parts can require integration between projects. The program must manage this integration and provide the necessary information to each component of the program at the appropriate time.
Program Management Examples
- An aircraft manufacturing plant has received information that high maintenance levels are required on the engines of one of its models. In response, it initiates a program to review and improve quality in the engine construction and assembly. Firstly, a project is initiated that inspects, and collects data on, many parts of the manufacturing process. Once the data comes in, a second project is initiated that works with suppliers to improve the strength of several parts. A third project makes changes to the assembly process to install the new parts. A fourth project performs testing and obtains regulatory acceptance for the design changes, and a fifth implements the changes.
- An industrial company wishes to build a new factory, shipyard, and rail facility. The design of the facility can be performed by one, large multidisciplinary engineering firm for about 20% of the cost of construction. Due to specialized nature of the work, however, the construction contracts are issued in three parts, the shipyard, the factory, and the railyard. For the owner organization, the “development program” consists of the design project, the shipyard project, the factory project, and the railyard project.
- A university wishes to develop a technology campus. The first project is a planning project to determine several options for its location and cost, and recommend one option to the board. The second project is to purchase the land and prepare it for development. The next set of five projects are to construct five buildings over ten years. Finally, the technology campus program is finished, having delivering the university a series of interrelated projects that accomplished a common goal.