Blog Post Image

Differentiate Between Terms Programme And Portfolio; 5 Points

Paul Naybour Paul Naybour

Published: 8th March 2013

This is a tough one, but I enjoyed your podcast on this. I know what I want to say but am struggling put into the correct words and I haven’t seen any other attempts at it posted:

 

i) Programmes are focused on delivering ONE strategic change to an organisation e.g. to develop a new car model, or to merge  two financial institutions. However, portfolios are different in that they consist of ALL projects, programmes, businesses and investments being run and resourced by the host organisation, with particular focus on the return on investment e.g. ROI from investing in and selling new car models, or the incremental operational savings vs. the capital cost of upgrading machinery.

ii) An organisation can have MULTIPLE programmes, whereas they can only have ONE portofilio, broadly speaking. For example, a car manufacturer may have MULTIPLE car development programmes, but only ONE portfolio of business interests containing those programmes and other investments. Some organisations may have multiple portfolios if required by geographical, functional or cultural divisions.

iii) Programmes consist of a series of connected, INTERDEPENDENT projects aimed at delivering a target strategic change. Portfolios, however, consist of any number of INDEPENDENT projects, programmes, businesses and investments being run and resourced by the host organisation, the goals of which are to meet the business objectives of the organisation at the time.

iv) Programmes are typically sponsored and supported at the senior management level to give sufficient political weight to help ensure programme success. However, portfolios must be sponsored, in essence, at the highest echelons of an organisation (board level, CEO etc) as portfolio management is effectively an on-going business planning process.

v) Programmes have different customers throughout their lifecycle. Portfolios contain projects and programmes that themselves have their own customers, either internal or external. However, the portfolio itself serves only one customer – the host organisation.

  1. Paul says:

    Ramzi I really like this answer, as you say it was a hard question and you have demonstrated that you clearly understand the difference between programmes and portfolios

Leave a Comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.