Distinguishing portfolio, program and project

A common ground when we talk with colleagues and other professionals is a key for an effective communication. As I often hear people confused by the three terms "project, program and portfolio", I believe it is worth to summarize in a short post their meaning and remind the readers about the main differences in between them.

IT'S ALL ABOUT TERMINOLOGY. In this particular case, the terminology used is a bit tricky and it may lead to mistakenly join three well different ideas into the same concept.

The picture I have chosen today is in the customary and joyful spirit of the blog.. and the link with the topic is explained below!


We have already provided an extensive definition of project in a previous post.

A project is basically  an operation that leads to achieve unique and defined deliverables. 

Also, it is constrained by predetermined budget, time and requirements. 
For further considerations I encourage you to open the hyperlink above.


With a strategic target in mind, a business may elect to set up a program (or programme,  not to be confused with the meaning of "computer software"..), which basically consists of:

a number of related projects, that are considered beneficial to run all under a same umbrella (namely, the program management)

Some organizational changes may be promoted to execute the program at the best and in order to guarantee an efficient, common, coordination of the individual projects that otherwise would be managed separately.
The point here being that a significant benefit is deemed achievable if the projects selected to constitute the program are managed in correlation each other.
To be noted that the decision to coordinate a number of projects as a "program" must be justified by features others than one common element (as example, the same customer or the same geographical location for the installation of different equipment are not enough to call for a program).
Strong advantages must be identified to undertake the program creation, like those that may be reached in developing a new line of products each of them delivered by a project, a new and entire complex communication or transportation system that is the combination of the results of few projects, the urbanization of a wide area by means of the execution of several projects to construct in there houses, piping, build roads etc...
The management of the inter-dependencies in between the projects, which requires the company to appoint a program manager, differentiates a project from a program. In a project, regardless its magnitude, you have basically to manage a group of deliverables vs a budget and a schedule, while in a program there is a multitude of links in between the projects to be managed as well. This in order to ensure that the projects part of the program, collectively, bring the desired result to the business.
To be noted also that:
  • a program, in absence of projects correlated each other, does not mean anything. It is likely that you are confusing such group with a portfolio.
  • A large project divided into sub-projects is not a program.
As example of a famous program, think to the NASA Space Program.


We refer to a portfolio of projects or even to a portfolio of programs, when:

all those projects or programs concur, each of them with variable extension, to optimize the management and share the risks under a common strategy.

In essence, a portfolio is set up when it is convenient for the business to aggregate and run a number of projects or programs. So, if you think to a hierarchy, the portfolio is to be considered at an higher level respect to programs, where comprises some of them. Programs are in the middle in between projects and portfolios.

The advantage to create a portfolio does not come from interactions by the projects or by the programs, which could be perfectly absent. Also, the projects and the programs may be well different each other and belong to heterogeneous areas/divisions.

The trigger to make projects and/or programs part of a portfolio usually falls into the following targets:

  • an optimization of the company resources
  • risk evaluations that lead the company to deem beneficial, for the business, to group projects/programs
Think for instance to a company that groups all the projects for renewable energies into a portfolio. Such projects have different targets, different customers, different locations and individual managers, their outcome is not dependent from each other, but they may benefit of an optimization of the resources if grouped into one portfolio.
Or, to make a very dumb example, think to a bakery that group projects (design, preparation, shipments etc..) of different special cakes like those shown in the post picture! That's not 100% appropriate to a serious blog but I guess it makes the point clear.

Obviously, you can refer to the book distributed by PMI "A Guide to the Project Management Body of Knowledge (C)", otherwise said PMBOK Guide, currently in its 5th edition to deepen all the above.