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Managing Programmes and Portfolios (MPP) Module M32494

Projects, Programmes & Portfolios

Objectives LO1

• Evaluate the Significance of a Programme and Portfolio

What is a Project? & Project Management?

• Project = A temporary organisation, usually existing for a much shorter time, which will deliver one or more outputs in accordance with a specific business case. A particular project may or may not be part of a programme. Whereas programmes, deal with outcomes, projects deal with outputs” (MoP, 2011)

• Project = ”A unique, transient endeavor undertaken to bring about change and to achieve planned objectives” (APM, 2019).

Projects are…. (APM, 2019)

• Unique, time bound – Uses project management techniques to focus on the key objectives

• Risk aware – Only mitigate high priority risks

• Capital funded – Funded by loans, investment capital etc.

• Specialist skills – Range of skills (need is temporary)

• Create outputs – Also know as products or deliverables

• Focussed on standard of output – Continuous improvement of process

Project Management Definitions

• The application of processes, methods, knowledge, skills and experience to achieve specific objectives for change (APM,2019)

• Planning, monitoring and control of all aspects of the project and the motivation of those involved in it to achieve the project objectives on time and to the specified cost, quality and performance (MoP, 2011)

Project Management (ILX MoP, 2019)

Project Management is about…

• Defining the rationale for the investment • Capturing project requirements • Developing project scope • Preparing a Business Case to justify the investment • Securing corporate agreement and funding • Selecting the life cycle • Developing the Deployment Baseline • Developing and implementing the Project Management Plan • Leading building and motivating the project team • Managing risks, issues and changes on the project • Controlling, monitoring and controlling progress against the plan

(schedule) • Managing costs against the project budget • Maintaining communications with stakeholders and the project team • Handing Over and Closing the project in a controlled fashion when

appropriate

What is a Programme & Programme Management?

• Programme = “A temporary, flexible organization created to co-ordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the organization’s strategic objectives. A programme is likely to have a life that spans several years” (MoP, 2011).

• Programme = ”A unique, transient strategic endeavor undertaken to achieve beneficial change and incorporating a group of related projects and business-as-usual (activities)” (APM, 2019).

• Programme Management = “The action of carrying out the co-ordinated organization, direction and implementation of a dossier of projects and transformation activities (i.e. programme) to achieve outcomes and realise benefits of strategic importance to the business” (MoP, 2011).

Benefits of Programme Management

• All projects are focussed on the strategy

• Projects are planned in the optimum order, recognising the dependencies between them to minimise delays

• Project outputs are transitioned into outcomes and benefits realised

• Infrastructure projects are justified by the programme business case

• Economies of scale: – Cost reductions by procuring resources across several projects

together instead of one at a time – One programme office to support all projects instead of multiple

project offices

• Risk managed at programme/strategic level

• Wider stakeholder community is engaged throughout.

The Nature of Different Programme Types

2 Guide to developing the Programme Business Case

Chapter 1: Introduction

Figure 1. The different nature of different programme types Focus of programme

Making and delivering

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External or societal changeOrganisational change

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Vision-led, Outcome driven, Ambiguity and clarity co-exist,

Proactive adjustment to scope, loose levers

Vision-led, Benefits driven, Good clarity / Some ambiguity,

Reactive adjustment to scope, clear levers

Specification-led, Output driven, High clarity / Low ambiguity,

Reactive adjustment to scope.

Making and delivering: where the change being delivered is based on making and delivering new facilities, the programme will tend to be led by the specification of the outputs required – Figure 2, bottom left. There will be relatively low levels of ambiguity about what the programme is to deliver. The scope will be reasonably well defined and adjusted according to circumstances.

Organisational change: where the change is more focused on changing the way an organisation works, the programme will tend to be led by a vision of the desired outcome and the benefits it will deliver – Figure 2, (middle). There will typically be some level of ambiguity about what the precise changes are and how they will be delivered; but there are fairly clear levers that can be employed to achieve the vision.

External or societal change: where the change is focused on interventions and improvements in society, the programme will be driven by the desired outcome, but will typically be highly ambiguous and complex to define in terms of what it will involve – Figure 2, (top right). The scope may need to be adjusted as ambiguities are clarified over time.

Developing a Programme Business Case applies to all types of programmes and needs to be undertaken by trained people who have the capabilities and competencies to undertake the tasks involved.

How does a programme align with the strategic planning process? A programme is a major undertaking for most organisations and that involves significant funding and change for the parties involved.

Figure 2 below shows a typical environment for programme management.

(HM Treasury, 2018)

Project and Programme Management (ILX MoP, 2019)

Coal Power Station to Nuclear: Outputs & Outcomes (ILX MoP, 2019)

• Outputs = Tangible or intangible product delivered by a project (i.e. deliverables or product).

One project concerned with buying land, another produce plans for a new power station

• Outcomes = Changed behaviour that results from use of an output and leads to realisation of a benefit.

Instead of burning coal to generate electricity we are using nuclear energy – benefit to reduce Co2

Projects v Programmes (APM, 2019)

Programmes Projects

Tend to be long term endeavours Shorter time frame

Based on achieving a strategic vision Focussed on delivering outputs on time, on cost to the required standard

Has a business case

Has a business case but infrastructure/enabling projects rely in the programme business case for justification

Focussed on creating outcomes and benefits Focussed on delivering outputs

Greater ability deliver economies of scale

Less ability to deliver any economy of scale

Wider group of stakeholders Restricted group of stakeholders

Manages the dependencies between projects

Manages the dependencies within projects

Situations where Programmes could be used…

• Large construction project: – High speed 2 (HS2) rail

• Split into different projects land aquisition, tunnel construction, signaling, rolling stock, stations and local infrastructure (access roads).

• Local Community Initiative: – To provide stronger, greener, safer communities (vision)

• Split into different projects for street lighting, street furniture, health awareness and community policing.

• Organisational change: – Virgin and O2 merged in a 50:50 Joint Venture in June 2021 with

a programme to rationalize operational departments of both organisations

• Split into different projects for marketing, cost saving by merging call centres, combining technologies, rebranding, sale.

What is a Porfolio? & Portfolio Management?

• Portfolio = “The totality of an organization’s investment in the changes required to achieve its strategic objectives “ (MoP, 2011).

• Portfolio = “A Portfolio of projects and/or programmes used to structure and manage investments at an organizational or functional level to optimize strategic benefits or operational efficiency” (APM, 2019).

• Portfolio Management “The totality of an organization’s investment (or segment thereof) in the changes required to achieve its strategic objectives” (MoP, 2011).

• Portfolio management “The selection, prioritisation and control of an organisation’s projects and programmes in line with its strategic objectives and capacity to deliver’ (APM, 2019)

Portfolio Management (ILX MoP, 2019)

Typical Environment for Portfolio and Programme Management

3Guide to developing the Programme Business Case

Chapter 1: Introduction

Figure 2 Internal or External operating environment

Political, Economic, Sociological, Technological

Influence and Shape

Define Scope and Prioritise

Initiate, Align and Monitor

Implement and Deliver

Bring About

Policies, Strategies, Initiatives and Targets

Programmes

Projects and related activities

New or Transformed Business Operations Services

Outcomes Achieved and Benefits Realised

Organisations achieve their vision and mission through business strategies, policies, initiatives and targets that are influenced and shaped by the political, economic, sociological, technological, and legal environment in which they operate.

These business strategies consist of strategic portfolios that scope, define and prioritise the programmes needed to deliver the agreed business changes, outcomes and benefits.

The programmes within these strategic portfolios, in turn, initiate, align and monitor the projects and activities required to deliver the necessary outputs. These outputs may consist of new products and services, new processes and service capabilities, or changes to business operations. But it is not until the projects deliver and implement the required outputs into business operations, to improve organisational capabilities and achieve outcomes, that the full benefits of the programme can be achieved.

A continual process of alignment is required to ensure that the programme remains linked to strategic objectives, because even as programmes are implementing changes and improvements to business operations, they may need to respond to changes in strategies or to accommodate new initiatives and policies.

A case study showing the relationship between strategy, programmes and projects is provided at Annex A.

What is the importance of the Programme Business Case using the Five Case Model? The Programme Business Case is important because programmes will only deliver their intended outcomes and benefits if they are properly scoped, planned and costs justified from the outset.

Preparing a programme business case using the Five Case Model provides decision makers and stakeholders with a proven framework for structured ‘thinking’ and assurance that the programme:

(HM Treasury, 2018)

Projects, Programmes & Portfolios

Source: (APM, p18, 2021)

Host Organisation (Strategic Objectives)

Portfolio

Business-as-usual

Projects

Programme Programme Programme

Environment

Programme

Portfolio

Situations where Portfolios could be used…

• “Levelling-up the North” – Central government needs to establish a range of programmes and projects to improve (see: https://www.centreforcities.org/levelling-up/#work)

– Living standards – R&D – Transport Infrastructure – Education – Health – Well being – Housing – Crime – Local Leadership

Situations where Portfolios could be used… (Rayner & Reiss, 2013)

• A building supplies merchant decides to expand from 8th to 4th

largest chain in the country – add home DIY and services to their business historically focused on the building trade.

• Decided to establish 3 programmes: – Store expansion programme

• Objective to increase from 40 to 70 stores – Home services programme

• To launch a range of services to home owners – Fitted kitchens and bathrooms

– Manufacturing programme • Manufacture certain product lines previously bought in

– Would mean factory building, production line, warehousing, stock control plus new distribution

• Other small projects included: • IT/MIS, Human Resources, Accounts, Larger carpark

Characteristics of Portfolios, Programmes and Projects

Aspect Project Management Programme Management Portfolio Management

Scope Narrow, focused on delivery of defined products.

Wide scope focused on delivery of capability that will make possible realization of expected benefits.

All of initiatives (programmes & projects) for the organization as a whole.

Success Criteria

On-time, on-budget, on- specification creation of defined produces.

Realisation of expected business benefits.

Overall contribution to the organization’s strategy of its complete portfolio of programmes and projects.

Timescale Time needed to create and deliver defined products typically expressed in months.

Time needed to create the new capability and transition activities – typically years.

Ongoing business as usual activity with no anticipated end date.

Approach to change

Projects should be clearly defined and change strictly controlled to minimize impact on TCQ.

Change is inevitable and embraced with impact reviewed against the business case. Frequently uncertainties at start. Leadership should focus on constant learning and refinement.

Objectives is to structure portfolio so as to optimize the organistion’s benefits against the total investment being made and risk taken.

Typical Planning

Detailed planning to manage delivery of the defined products.

High level plans, providing guidance and oversight of component projects, focus on independencies of projects and resolution of conflicts.

Overall processes and communications to establish contributions and costs of the whole portfolio.

Typical Controls

Monitor and control tasks to ensure on-budget, on-time and on-specification delivery of defined products.

Monitor component projects and on- going work through governance structures.

Monitor aggregate performance of whole portfolio, in terms of benefits realized and contribution to organizational objectives.

Rayner and Reiss (2013, p18)

References

• APM (2019) APM Body of Knowledge Seventh edition, Association of Project Management, Princess Risborough, Buckinghamshire.

• APM (2021) APM Project Management Qualification Study Guide, Princess Risborough, Buckinghamshire.

• HM Treasury (2018) Guide to Developing The Programme Business Case.

• ILX MoP (2019) Management of Portfolios MoP, User Guide, V1.7.

• MoP (2011) Management of Portfolios 2011 Edition, AXELOS Limited.

• Rayner P & Reiss G (2013) Portfolio and Programme Management Demystified – Managing Multiple Projects Successfully, Routeledge.