There’s little doubt that a company would manage the construction of a new hydroelectric power plant or a major global sporting event as a program. However, outside of such mega-projects, how can a “normal” organization consistently determine whether to manage an initiative as a very large project or as a program of interdependent projects?
PMI’s current definition for a program provides insufficient guidance: “A group of related projects, subprograms, and program activities that are managed in a coordinated way to obtain benefits not available from managing them individually.”
When we look at the comparisons made between projects and programs in The Standard for Program Management (Third Edition) using factors such as scope, change, planning, management, success and monitoring we don’t find a single objective test. For example: “Project managers expect change and implement processes to keep change managed and controlled. Program managers expect change from both inside and outside the program and are prepared to manage it.”
The OGC doesn’t provide any greater clarity with their definition for a programme (from the PRINCE2 Pocketbook, 2005 edition): “A portfolio of projects selected, planned and managed in a co-ordinated way.” Again, the same could be said about the planning and management of interrelated work packages within a large project!
In the absence of project management association driven standards, what are some of the criteria which organizations currently use?
- Multiple project size dimensions exceeding thresholds: Any one of overall cost, human effort or duration alone are usually insufficient to justify setting up a program but in combination they might be. For example, $100M may appear to be a sufficiently large cost, but if the majority of that cost relates to purchasing certain capital assets, it could be effectively managed as a project.
- The subjective evaluation of complexity: In many companies, it comes down to gut feel among the leadership team. If they feel the stakes are too high to manage a highly complex initiative as a project, they might choose to structure it as a program.
- Benefits management over a long duration: While the benefits lifecycle for projects can be long, program structures may be introduced if benefits achieved from early projects are expected to drive decisions regarding the scope or staging of future projects.
- Level of organizational maturity: Companies operating at lower levels of overall project management maturity usually lack the foresight or vision to establish program structure proactively to address complexity or size.
The lack of a clear definition for what gets managed as a project increases risk of project failure and encourages stealth projects. The same holds true for programs: companies need to define their own objective criteria to reduce the risk of unnecessary overhead or of program failure.