Portfolios, Projects, Tasks; What's the difference?

Overview

Surprisingly enough, one of the most common questions heard when an organization first starts out to implement some Project Management improvements is “What is a project?” and “What is a portfolio?”.  At first these might seem like a very simple question, but when one delves into what is really being asked the question becomes a lot more interesting.  Frequently the person asking the question is really asking “What qualifies as a project vs. what qualifies as an ‘Activity’ or ‘Task’?” and “Will I have more than one project portfolio?”.

The answer to these questions can vary from organization to organization.  The simplest answer is “it depends”.  To help wrap your mind around these topics we will provide some background and examples that you can use as a starting point.

Project Portfolio Management

Project Portfolio Management (PPM) describes methods for analyzing and collectively managing a group of current or proposed projects based on numerous key characteristics.

At the simplest level a portfolio of projects can be thought of a list of proposed and active projects with their associated budgets, time frame, resource commitments and priorities.  These can be tracked in a PPM tool or in some simple spreadsheets.  This summary of projects can be used by key decision makers to decide which projects get funded and executed.

A more advanced project portfolio solution will contain some more characteristics that can be used to do business alignment, metrics, and resource optimization.  Here are some key items that should be considered when putting together a more robust project portfolio:

  • Name of project
  • Summary of project purpose
  • Proposed Start and End Date
  • Alignment to business objectives
  • Scope
  • Budget
  • Requested Resource Allocation
  • Critical Success Factors
  • Key Milestones
  • Sponsorship ( Business Sponsor, Business Unit, Region..etc )
  • Project Type ( Custom Solution, Vendor Implementation..etc. )
  • Classification ( Benefits, Web Presence, Marketing…etc )
  • Regulatory Requirements
  • Return on Investment
  • Inter-Project Dependencies
  • Risk Analysis
  • A standardized approval process

By using these characteristics an organization is in a better position to answer questions like:

“We have had a change in priorities, which efforts can be ‘pushed out’?”

  • “How well does our current plan align to our business objectives?”
  • “How have we allocated our budget spend?”
  • “What work are we doing for the accounting department?” { example }
  • “Our budget has been slashed.  How can we deliver our most important services?”
  • “If we outsource email how much will we save?” { example }
  • “How close have we been in hitting our budgets and schedules based upon the original plan?”

Project Management

Project Management is simply the act of managing a series of activities to deliver a desired result with a definitive start and end date. 

What is a project?

There are various definitions available for what constitutes a “project”.  What an organization deems a project will vary based upon the size of the organization and the type projects that will be delivered.  Typically what is considered a project excludes “Service Requests”, “Maintenance” and other ongoing “Activities”.

Organizations may choose to have a “scoring” method that will help guide the decision of what is a project. 

Example: “What is a project” scoring method:

If a proposed activity answers “YES” to 3 or more of the following criteria the activity is most likely a project:

  • Greater than 40 hours of resource effort
  • Involves external resources and/or third parties
  • Greater than one internal resource
  • High visibility – Across multiple departments, sponsored by Commission
  • Multiple interface / integration points
  • Requires RFP / BID
  • Involves new technologies, methods or processes

Organization efforts that are not a project based should still be tracked by the PPM solution, but they are not “projects”.

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