Program Management in Today’s Enterprise
Many people interchange “program management” with “project management,” assuming, perhaps, that their meanings are basically the same. While the two terms are interrelated, they are vastly different in how they are approached and by whom.
The enterprise program management office (EPMO) often leads program management for outcomes aligned with achieving corporate objectives. One of its primary charters is to orchestrate coordination and interdependencies of cross-enterprise projects comprising the program that together realize strategic goals.
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Was ist Programm-Management?
According to Gartner, program management is the coordinated planning, management, and execution of multiple related projects that are directed toward the same strategic, business, or organizational objectives. Program management is more than a collection of similar projects or organizing projects under the same umbrella. Effective program management ensures people and teams are focused and collaborating across departments who are working together to achieve a shared strategic vision.
Multiple programs run concurrently, each meant to create change in the organization to foster growth through innovation and market expansion, digital transformation, and efficiencies. Executing on strategy is difficult due to some uncertainty. Program managers across the organization focus on ensuring alignment to priorities and shifting as priorities change.
Because projects often compete for resources in terms of people and dollars, program management must also balance those resources across projects. Program management enables the organization to fund, prioritize, optimize resource capacity, and manage interdependencies and conflicts. Program managers are viewed as strategy execution leaders and have deep knowledge about current organizational capabilities.
Program management thrives in organizations that embrace uncertainty, leveraging continuous planning as a part of their strategic roadmap and portfolio funding process. From idea to delivery, programs are vital to successfully integrating strategy with delivery.
Program Management vs Project Management
Program management and project management might sound like similar practices, but they are very different. Program management is common in larger, more mature enterprises mainly because the need is greater as organizations scale, and driving change requires more cross-organization coordination.
Programs have a set of outcomes to achieve one or more strategic business objectives. There is often dependencies and uncertainty around the work to be done. They cross silos, require alignment of resources, and result in change to the organization.
Program management ensures people and teams are focused and collaborating across departments who are working together to achieve a shared strategic vision.
Project management refers to the coordination and oversight of a set of tasks completed to produce a result and that result is directly aligned with the program it falls under. Common project management tasks include defining a detailed project plan, managing a project budget, allocating and assigning resources, and generating reports indicating status against schedule and budgets.
Projects often have a defined budget, scope, and timeframe to be completed. Projects also have metrics and goals which determine their success and failure – typically on time and on budget.
The key difference between program and project management is the scope. While program management focuses on the broader strategy, continuous improvement, and benefit realization, project management focuses on the specific tasks, deadlines, and tactical execution necessary to achieve the overall program goals. When executed properly, they are synergistic and complimentary.
Program Management Enterprise
Many PMOs are evolving into enterprise program or project management offices (EPMOs) to meet the changing needs of the business, most notably, the increased focus on digital transformation. Gartner found that EPMOs are more apt to develop innovative, high-value products or services based on customer or business needs. This requires a greater emphasis on enterprise planning, delivery and performance to respond to increased digital business demands.
The EPMO is in the ideal position to support digital transformation, serving as a central point to manage cross-company program management. Instead of groups across the company working in silos, they come together to effect a change in capabilities. Technology, products, customer service, marketing and other groups must be coordinated to ensure all are working towards the same enterprise vision through various programs.
Still, EPMOs face challenges to operationalize strategic plans. Studies consistently find that two-thirds to three-quarters of large organizations struggle to implement their strategies.
An adaptive program management approach is necessary to translate strategic vision across the enterprise to deliver outcomes that often impact or change organizational processes. Program management is an effective way to realize benefits quicker and at higher value while creating scale and bridging organizational silos.
Program managers can create outcome-driven program plans and roadmaps connecting dependencies cross-functionally to manage them holistically while ensuring the organization prioritizes the execution of strategy.
Are You Ready for Program Management? Execute on Strategy, not Projects
A few things to consider when thinking about program management:
- Drive a strategic plan while balancing against day-to-day realities: Programs create change. They leverage a set of projects to deliver that change incrementally and measure the value they create back to the strategic goals. This allows programs to manage the change they create while evolving as new information is learned.
- Operationalizing strategic execution moves across the organization and bridge silos: Dealing with multiple departments, multiple products, or moving targets is challenging. The organization knows the priorities if there is a roadmap. A strategic roadmap with the work required across the organization highlights dependencies while having a roadmap to resolve conflicting priorities.
- Seeing the bigger picture: Programs are tied to strategic goals and are funded to create value that needs to be measured through the life of the program. Realizing the impact that the program has on the organization will help drive the decisions for the program and its projects. The ability to adjust, prioritize, and make decisions is important as goals are achieved. In addition, visualizing and managing the complex inter-project relationships within a program allows program and project managers to have a clear understanding of how work schedules can impact each other. This clarity facilitates the inevitable schedule adjustments required to ensure a successful delivery by resolving potential scheduling conflicts
- Passion for collaboration: Program managers spend most of their time communicating, collaborating, and coordinating cross-functionally throughout the organization. They know the business and how to get work done efficiently. They trust in the project managers to deliver while measuring the results so they can focus on delivering benefits and realizing the organization’s strategic goals.
Benefits of Program Management
Leveraging program management practices is an effective way to execute cross-functionally and realize strategy. Programs allow the organization to translate strategy into actionable goals to measure performance and mitigate the risk of failure. Metrics should be measurable, attainable, and aligned with the overall goals of the program.
What you decide to measure will drive not just the program but will help define projects and their intended value. How and what is delivered may change; the strategic goals of the program usually don’t.
If they have, then the strategy has changed, and the organization needs to react accordingly. That is why it is so important for programs to be a translation of strategy and not some side-list aligned to it. Some examples of program metrics include:
- Financial metrics: Define the investment and its return from the viewpoint of the strategy. Identify financial metrics that can be measured incrementally to avoid waiting until completion, which will stifle the agility to shift along the way. While mature organizations require at a minimum ROI, IRR, NPV, and payback period, they alone tell only half the story.
- Operational metrics: Operational metrics, if done correctly, can help program managers handle uncertainty. For example, improving customer experience is not always immediately a financial gain (though hopefully in the long-term it is) but absolutely can be a goal of a program that is part of a strategy around reducing customer churn. Metrics on customer experience are then needed to determine what needs to be done to improve customer experience. Understanding the metric drives the program, and ultimately, its projects, will determine how to improve the customer experience. The first project in the program could be to understand what could improve the metric of customer experience. For example, would improving the customer experience through shorter wait times, improved ticket turnaround times, or an increase in the number of tickets answered improve the customer experience and, ultimately, reduce customer churn? The program plan does not need to know how they are going to improve those processes, but that they expect it to achieve the goals. Execution activities determine if more support staff is needed for the team, what new technologies could improve the throughput of ticket resolution, or if introducing a new process to handle complex and exception type of tickets is needed. The metric helps to realize what will, and more importantly, what won’t, achieve it and it’s a critical component to effective program management.
- Business capability metrics: Successful strategic execution requires organizations to understand what they do well and what business capabilities they should focus on. This may even be a pre-requisite for creating operational metrics. Quantify where the organization is today and where they want to be for the chosen business capabilities to track, monitor, and assess the impact of what is being delivered throughout the program.
- Risk: Risk should be looked at throughout the duration of the program. Balancing risk with working on projects that have the greatest chance of success or the greatest impact on the organization is essential in assessing the value of the program. Risk needs to be assessed, managed, and mitigated where possible, but it is important to know the risk of the program at any given time and communicate that to stakeholders.
These are just a few of the key metrics to think about when setting up program management to ensure maximum benefits realization. Keep in mind other Key Performance Indicators (KPIs) are important for specific projects, and the program as a whole, and make sure they are defined and communicated from the start.
Program management aids in strategic execution and results in more time spent on the enterprise, establishing metrics, measuring performance against strategic goals, communicating, managing priorities, and managing business change across departments.
For more information on how to empower EPMO leaders and program managers with solutions and tools that fit their needs to build and execute strategic programs within your organization, read more about Planview’s solutions and products and explore these additional resources below:
- What Does a Program Manager Need to Execute on Strategy?
- How Do You Turn Strategic Goals into an Executable Plan?
- Forrester – Programs Provide a Clear Road Map For Strategy Implementation: Create a Living BT Roadmap
- Gartner – Optimize Outcomes with Program Management Across Product Lines
- Four EPMO Styles Are Evolving from Visibility to Transformation