At any given time, a development organization is running several projects funded by different donors. In small organizations, projects are often handled on a first-come-first-served basis or based on who makes the most noise.

As development organizations grow, there comes the point where it becomes necessary to prioritize and manage the range of projects from a strategic viewpoint. Otherwise, they face challenges due to the need to provide adequate support and resources to all the projects and make a strategic decision about their priorities. The organization needs to evaluate if a proposed project is aligned with the organization’s strategy, mission, and vision, not making those decisions can lead to many projects that do not receive the appropriate resources or supervision and projects that do not contribute to the long-term development goals of the organization.

Development organizations can benefit from a Project Program Portfolio Framework that helps structure how decisions are made. There is often confusion when it comes to defining projects, programs, and portfolios. Sometimes a program is called a project, and sometimes a project is called a program. Sometimes project portfolios and programs are mistakenly used interchangeably. These three components require quite different strategies to manage them successfully.

Project Management generally exists in a hierarchy, starting with the strategic plan, and projects are the vehicle used to execute the strategic initiatives of the organization. Project management is about “doing the projects right."

The organization may utilize programs as a means of grouping related projects together, thus ensuring that the interrelationships are managed across them and leveraging economies of scale (i.e., shared administration, management of benefits, etc.). Program Management ensures that the interrelationships are managed to achieve efficiencies and effectiveness of resources across projects aligned to reach a program goal.

Programs and projects can be further grouped together as a portfolio. Portfolio Management focuses on alignment with organizational strategy, setting priorities vs. resource and/or financial constraints, and ensuring the right mix of initiatives to meet organizational goals. This is not unlike the management of a financial portfolio.

Project Portfolio Management is about "doing the right projects", it is the process for ensuring that only the projects that will add value to the organization are selected for inclusion in the project portfolio. Also, portfolio management is ongoing and cyclical, while program and project management are temporary.

It's not enough to manage projects efficiently; they must also be managed effectively within a project portfolio and ensure they are delivering the expected benefits to the beneficiaries and helping achieve the organization's development goals.

Want to learn more? Register for the next session of our online course Organizational Project Management and start building your project management skills. 

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