Program Management in Today’s Enterprise
What is Program Management (and what it’s not)
The Project Management Institute defines program management as the grouping of projects for the sake of managing them together for increased benefit realization. But really, it’s much more than just a collection of similar projects. Programs are meant to create change in the organization to create growth, often through innovation. Executing on strategy is difficult since there is often a lot of uncertainty and it requires expertise across the organization who have their day-to-day priorities. Program management enables the organization to fund, prioritize, and allocate resources who are often viewed as leaders and have deep knowledge about current organizational capabilities. Program management is not:
- Managing an extra-large project. Programs are designed to consist of related smaller projects, but the fact that a project is big does not mean it is a program. Programs must be able to execute projects that align to business goals.
- An execution tactic. Programs are intended to deliver on a specific goal or objective of the organization, and involve a high degree of planning in addition to execution, financials, and outcome delivery.
- Ongoing. Programs typically run longer than projects, but have a definitive end.
Program management thrives in organizations that embrace uncertainty leveraging continuous planning as a part of their strategic roadmap and process. From idea to delivery, programs are vital to successfully integrating strategy with execution.
Project Management vs. Program Management
Project management and program management might sound like similar practices, but they are very different. Project management refers to the coordination and oversight of a set of tasks completed to produce a product or service. This is commonly defining a detailed project plan, managing a budget, balancing resources against capacity, measuring output, and generating necessary reports. Projects often have a defined budget, scope, and timeframe to be completed. Projects also have clear metrics and goals which determine their success and failure – even if those goals are simply to be completed on time and on budget.
Programs have a strategic business objective and often there is uncertainty around the work to be done so they should be approved and funded prior to any projects being defined. They often cross silos and will result in change to the organization. Program managers rely on project managers to help with execution while maintaining the responsibility for coordination and prioritization across the organization to aid in successful delivery of individual projects for the program. While many program managers do not have direct authority over project management or its team members, they should illustrate leadership and influence across the organization. Program Managers do not micromanage but rather coordinate and collaborate with not just project managers but the enterprise toward shared goals. Program management is common in larger, more mature enterprises mainly because the need is greater as organizations scale and innovation is easily stifled.
THE KEY DIFFERENCE BETWEEN PROJECT AND PROGRAM MANAGEMENT IS THE SCOPE. PROJECT MANAGEMENT FOCUSES ON TASKS, DEADLINES, AND TACTICAL EXECUTION. PROGRAM MANAGEMENT FOCUSES ON STRATEGIC PLANNING, CONTINUOUS IMPROVEMENT, AND BENEFIT REALIZATION.
Portfolio Management is a centralized grouping of projects, processes, and work to ensure strategic success. Portfolio management objectives are to balance the right mix of resources, finances, and managing risk while considering size, scope, and complexity of projects. Portfolios can be classified not just on strategic goals, but any classification that makes sense to the business – department, region, product, etc. With high emphasis on strong portfolio management practices, businesses are able to realize increased benefits and direct impact on the strategic goals of the organization.
Are you Ready for Program Management? Execute on Strategy, not Projects
Project failure is an issue that has plagued project managers for decades. Project failure rates are now on the decline as organizations are getting strategic about project selection and taking a vested interest in program management. See above image from the Pulse of the Profession report which shows project success rates over time, currently on the rise.
The report further states that strong project and program management practices combined with strategy implementation in programs is what results in increased success.
Just as programs cannot simply be classified as large projects, program management skills don’t come from simply managing large projects. It takes a different set of skills and fine tuning to successfully deliver programs. 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 can leverage 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 initiatives goes across the organization and bridges 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 which 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. Looking across all the work an organization is doing, it may become evident that they are aiming for perfection when they have already achieved enough value and it is time to shift focus to other strategic initiatives. No company needs to be the best at all their business capabilities. They need to be the best at the ones that will drive growth.
- 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 things done. 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.
Realize the Benefits
Leveraging program management practices is necessary to execute 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 the projects and what value they should achieve. 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 view of the strategy. Translate what the organization is willing to fund and the kind of return is believed to be achieved. Create financial metrics that can be measured incrementally to avoid creating long programs that stifle agility. It’s also important to realize that individual metrics alone don’t tell a complete story. While mature organizations require at a minimum ROI, IRR, NPV, and payback period, they alone only tell half the story.
- Operational metrics: Determine what you want to improve and how you can measure it. But, don’t assume there is only one path to obtaining it and do not assume that it is already known. Operational metrics, if done right, 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, to which will determine how to improve 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 increase in number of tickets answered increase 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 another 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 what is needed. The metric helps to realize what will, and more importantly sometimes, what won’t achieve it.
- Business Capability metric: Successful strategic execution requires organizations to understand what they are good at 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: This is an area that should be looked at throughout the duration of the program. There is always a risk factor and driving toward working on projects that have the greatest chance of success or the greatest impact to 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 external stakeholders.
These are just a few of the key metrics to think about when setting up your program to ensure maximum benefit realization. Keep in mind other KPIs that 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 which is very different from project manager skills. When an organization might be ready to start building and executing programs, good program managers must be developed. For more information on how to empower program managers with solutions and tools that fits their needs to build and execute strategic programs within your organization, read more about Planview’s solutions and products and explore the additional resources below:
Why Strategy Execution Unravels—and What to Do About It, (2015) Harvard Business Review. Retrieved March 2015