Chapter 4 Program Management – Projects, Programs, and Portfolios in Strategic Organizational Transformation

CHAPTER 4

Program Management

  • Uncertainty refers to the means to achieve outcomes, whereas ambiguity refers to the degree of change in goals over time.
  • Program management aims to govern project sets in uncertain and ambiguous environments to achieve synergy and pursue strategic ideals.
  • Program management is concerned with the integration of multiple project deliverables to maximize opportunities inherent in change.
  • Transformations to meet ambiguous goals in an uncertain future exceed the capabilities of traditional project management.

Chapter Structure

What Is a Program?

A program is a set of interconnected projects, all pursuing a benefit not achievable through a single project (PMI 2017). The Managing Successful Programs framework defines programs as “temporary organizations established to coordinate, command, and monitor a group of related projects, where the goal is to produce outcomes and benefits consistent with organizational strategic goals (OGC 2011).” Programs require a series of transformational activities (projects and operational activities) integrated to realize benefits of a common goal, where it is possible to identify significant connections and coordination effects between all activities and stakeholders. These coordinated projects, when integrated with operations, bring lasting and stable benefits to an organization, whereas if even one project lacks a core vision and a clear goal, intended objectives may not be achieved, and may overlap or conflict with other projects.

Due to the ever-increasing complexity of projects, many studies classify projects based on metrics such as goals versus means, levels of uncertainty, or complexities (Thiry 2002; Thiry 2004; Thiry 2010; Jiang et al. 2014; Chang et al. 2014). There are many similarities between complex projects and programs. However, despite programs being more complex than projects, many people still think of programs as extended or large projects, where the same tools, technologies, and concepts of projects are applicable in the management and control of the program. This misconception stems from a confusion of uncertainty and ambiguity. High uncertainty does not result in high directional complexity but makes projects more difficult to manage, perhaps through other forms of complexity (Pich et al. 2002). If projects are ambiguous because they are not clearly defined or because they have a high degree of directional complexity, they should be implemented as programs. When project outputs cannot be clearly defined at the onset because of high ambiguity or directional complexity, traditional project management techniques are improper, and implementation must be facilitated through a program management perspective.

A common example of a program is the installation of a complex enterprise system (ES). One common goal of an organizationwide enterprise information system is the standardization, integration, and availability of data across all functional areas within the organization and in a secure fashion to external partners as required. Figure 4.1 illustrates the unique aspect of an ES within an organization. The organization as a whole expects benefits from the installation of the ES with goals established that reflect the interests of each functional area. However, stakeholders in the marketing department might see specific advantages for information sharing across the organization, such as the ability to coordinate sales with production capability for better delivery promises to customers. The marketing group will further expect functionality to support customer relationship management activity. On the other hand, the operations stakeholders will look forward to coordinating data efforts for the management of their supply chain. Still, others in the organization will have their main interest in the business intelligence functions of the enterprise system.

Figure 4.1 Enterprise system goals

If considered individually, a project associated with supply chain management in an ES might have very specific deliverables associated with data integration as established to meet the goals of the operations department. Certain goals of the operations group will certainly overlap with those of the marketing group. However, there may also be goals that have nothing in common across the two departments, which may be compatible or incompatible in the installation of the system. Even those goals held in common might present different interpretations dependent upon the backgrounds and needs of the different functional areas. Further, goals held in common might present different solution spaces for the different groups, requiring careful coordination across the interdependent projects. Yet to achieve a successful implementation of an enterprise system, the ambiguities and differences of the goals for all stakeholders present a condition where the deliverables are imprecise, disallowing traditional project management techniques. Thus, an organization establishes a project for each of the different components in an ES implementation but coordinates all projects as a single program. The organization may establish further projects that prepare the personnel or suppliers to employ the systems, build out the hardware required, and alter any legacy systems to prepare for conversion.

Programs typically arise in the transformation of an organization (Martinsuo and Hoverfält 2018). Transformations may be simplistic and require only a project for implementation, such as a project for launching a new employee onboarding process. However, transformations quickly increase in complexity, including directional complexity. An organization may require transformation to penetrate new markets, to implement new quality control systems at multiple levels in the organization, to alter a culture to become more consumer oriented, or adjust to new legislation or social expectations. An organization dedicating to a new quality control philosophy may require new technology platforms, employee behaviors, and manufacturing equipment. Many projects would result. As early projects are completed, the deliverables of each project often serve in the determination of the next projects launched. Resource allocation instills dependencies across projects as personnel, cash, and facilities are limited. The interdependency of tasks, resources, and goals, along with the ambiguity of higher level goals or measurement of goals, is what characterizes a program. The benefits of such a quality control program might be numerous, difficult to quantify, and be perceived differently by the different functional areas. A program is accomplished through multiple projects that have autonomy of completion and clarity of goals, even if the projects have other forms of complexity such as temporal, structural, or technological.

The Motivation for Program Management

With environmental changes, the scope of project management and complex project management becomes ever wider, and more and more managers come to find that in practice, one is gradually conscious of “project collections.” The reason for combining projects is that when projects are managed together, managers find that certain “chemical reactions” may occur, and benefits that cannot be realized when managing individual projects can be found (Ferns 1991; PMI 2017). As earlier alluded, the biggest difference between project collections and projects lies in uncertainty and ambiguity, and the different risk avoidance viewpoints between traditional and complex project management. In project collections, the risk avoidance perspective is closer to that of Peter Drucker’s position on strategic efficiency, where the focus lies in maximizing opportunities and not in minimizing risks (Thiry 2002; Thiry 2004). The core of program management lies in finding benefits and opportunities to generate value from uncertainty and ambiguity. Because of this difference, we are required to apply a new set of management systems and techniques when managing project collections as programs (Pellegrinelli 2011). If organizations continue to utilize techniques of traditional project management or complex project management, they risk losses of opportunity, value, and benefits.

Loss of Opportunity to Integrate Strategy

Project collections often exist in complex environments. Continually changing environments make it difficult for managers to establish clear strategic goals before the execution of project collections, and, therefore, managers need to consider emerging strategies apart from existing strategic plans. When program managers are planning baseline strategies according to actual conditions, they can later adjust and optimize strategic plans as helpful for obtaining and increasing final benefits. Managers are no longer followers of strategy, but rather drivers and developers of organizational strategic goals. This type of management technique is ideal for organizational strategic transformation. Traditional project management techniques are only concerned with how to accomplish specific plans, and therefore lack flexibility in attaining strategic goals. However, high levels of uncertainty and ambiguity in project collections require continued assessment and flexible management strategies. From this perspective, application of traditional project management techniques in the management of project collections will result in loss of opportunities to integrate strategy, which will then result in failure due to falling into a project management mode.

Loss of Potential Value and Benefits

In practice, the choice of traditional project management techniques is subjective and mostly concerned with whether one’s projects are successful. However, in project collections, it is necessary for all personnel to think in terms of “our” success. Compared to traditional projects assessed on whether or not they deliver the expected scope on time and budget, programs find this type of assessment lacks in foresight and negates potential opportunities to generate value. Project collections must change their products on the fly based on the benefits gained by the organization. Program stakeholders can only identify potential value in project collections and go on to find additional benefits to an organization when given enough motivation and autonomy to do so (Thiry 2002). Thus, project management techniques and cultures do not apply where there is a high level of ambiguity. Unlike traditional project management, program management is an innovative management concept and culture with complex systemic perspectives, is value and benefit oriented, and encourages continuous learning for proper directional change.

A systemic perspective is a core element of program management (Maylor et al. 2006). Programs are characterized by uncertainty, and program management is made up of systems where strategic decisions are made at a program level to better meet the demands of organizational executives, managers, and project teams. Development of a comprehensive viewpoint of project planning and project reporting addresses better complex external environments and complex project collection structures. The focus of management lies in maximizing benefits, in communicating among key stakeholders, and in coordinating between projects. Systemic coordination can transform the complexities of project collections in the program into opportunities to generate benefits for a company.

The end objectives of program management are value and benefit oriented. When determining the success of programs, final program benefits are the key deliverable. Reaction to opportunities that increase final benefits weaken persistence toward the generation of planned deliverables during the program, increasing flexibility to pursue enhanced value. Reacting to the uncertainty and ambiguity of programs makes continued learning a natural imperative during the management process (Dutton 2014). Only through continued learning, will we grasp the emerging goals of a program or even understand the connections among individual projects and a large, diverse set of stakeholders. Making adjustments over time requires learning from the environment and the early projects. Only through continued learning will organizations achieve ultimate strategic goals, obtaining expected (or perhaps even more than expected) values and benefits from transitional programs.

The Elements of Program Management

Although program management has been widely discussed throughout industry and by academic scholars, there is still no unified definition or practice set for program management. This has, to some extent, created ambiguity in program management itself. In order to manage and integrate a collection of projects to achieve the expected business benefits and create value for stakeholders, organizations typically form a program team to ensure consistency across the strategic goals of the program and the organization, as well as the objectives of various business units. The program team must serve the interests of the organization and work across levels to include executive levels, functional managers, and project managers.

Figure 4.2 is a simplified representation of a program team for the earlier ES example. The strategy of the organization is set in goals by the executives. The goals are provided to the ES program team encapsulating the benefits to be achieved. This may be one goal, such as the integration of data across all functional areas, or have additional goals such as operational efficiency. A program manager will lead the ES program team. Further members of the team will include the project managers from all included projects. Other members may represent specific functional areas, technology expertise, or ES consultants. The program team works within the constraints of the goals established by the executives and the resources available to the program for completion. Each project will have a defined deliverable to include scope, budget, and schedule that moves the organization forward in attainment of the overarching ES goals. At this time, each project may bring in goals specific to local interests as long as they have no conflict with the goals of the organization or other projects. Goals are thus set for all the projects; and implementation plans for each project established to consider the interdependencies among projects. The project managers then assume autonomous control over their contribution to the completion of the program. During the entire duration of the program, projects are subject to change, elimination, or addition to meet a change in the environment or understanding of the program.

Figure 4.2 Enterprise system program team

Moving From Project Management to Program Management

Project management focuses on outputs and performance, and program management focuses on the realization of organizational benefits and learning-based management. Project interdependencies in complex environments and management of various activities in highly predictable conditions require very different management techniques. Therefore, process flows and knowledge systems of project management cannot be applied directly to program management. Consider the distinctions indicated in Table 4.1. Rather than specifying a specific deliverable, the targets become business benefits. Attaining those benefits becomes the primary evaluation of performance for the program. For projects, change is to be avoided, while programs must monitor the environment and organization for changes that present opportunities. The interactions held among the stakeholders and team members focus on the capitalization of the benefits for the organization and the coordination of all projects within the program. Controlling a program requires that the benefits be measured in some fashion and compared to expectations established at launch. The delivery of value must be assessed continually to determine the mixture of projects, which can change accordingly. The orientation of a program is to monitor the environment for changes that present opportunities or threats and to market the program to external stakeholders. We consider how the focal aspects change the traditional tasks from project to program management (Smyth 2009). Table 4.2 highlights required modifications going from projects to programs based on the recommendations of Thiry (2002) and Maylor et al. (2006).


Table 4.1 Focal aspects of project and program management

Aspect

Projects

Programs

Targeted Deliverable

Clear, defined deliverable

Defined business benefits

Performance Criteria

Cost, time, scope, quality

Attainment of benefits

Change Flexibility

Avoid change

Capitalize on change

Interaction

Related to tasks, product delivery

Related to pacing and coordination of projects, delivery of benefits

Control

Compare actuals with schedules, budgets, and specifications

Compare delivered benefits to expectations, continual assessment of projects

Orientation

Define and complete work, manage teams and risks

Market the program, monitor the environment


Table 4.2 Moving from project management to program management

From Projects

To Programs

Integrated management

Decision management

Scope management

Value management

Time management

Pace management

Cost management

Resource management

Quality management

Benefits management

Stakeholder management

Elevated stakeholder management

Communication management

Marketing management

Risk management

Uncertainty management

Procurement management

Partner relations and value chain management


From Integrated Management to Decision Management

Within projects, integration management refers to a series of solutions and techniques to ensure all the activities within the project are coordinated and effectively integrated into the final deliverable. The task of project managers is to achieve integration with high levels of performance, with clearly defined outputs, and under resource limitations. Development and implementation of project management are based on a project plan with predefined strategies and monitoring processes, where everything is managed to go as planned.

Programs are less predictable and involve more stakeholders and more intermediate decision making to be more responsive to actual conditions. Program managers need to ensure that programs are well planned, but at the same time need to be open to the possibility of change to achieve ultimate benefits. Establishing a decision process that continually evaluates opportunities to improve delivered benefits to meet strategic goals best serves the nature of programs. Transformation of an organization cannot be restricted to a rigid goal set but must allow continuous adjustment.

From Scope Management to Stakeholder Value Management

Before the implementation of a project, an organization defines project scope, schedule, and budget to the satisfaction of a primary sponsor or stakeholder. The plans and expectations represent an agreement with stakeholders on the deliverable. Thus, managing toward the specific contract requires the accomplishment of scope to satisfy the intended users of the output according to the budget and schedule. However, programs create value for multiple stakeholders in the organization. Therefore, program management requires value management to identify the needs and expectations of stakeholders (often identified through tools such as Strategy Maps or Balanced Scorecards). Expectations must be reduced to quantitative measures to mitigate the ambiguity of programs. The projects within a program must be prioritized based on viability and contribution to stated values. Value management is a way to handle sudden change and is a learning-based framework for stakeholder management, where needs are analyzed, a vision is established, a consensus is reached on a target, and benefits or changes identified.

Program managers must play a leading role and be able to deal with influence, power, and motivation, especially in the setting of mature organizations where program managers may be the initiators or sponsors of a program. Program management is not simply a series of decisions as to whether or not a project is included within a program, but rather considers the needs and expectations of stakeholders for a continuously evolving and systematic perspective to develop and revise a plan that can realize expected benefits for an organization.

From Time Management to Pace Management

Projects have clear start and end dates, with task durations and critical path control being the two most important elements of time management. Project managers usually break a project into many smaller activities and then conduct time and cost assessments to identify interdependencies before establishing a project schedule that can accurately predict the duration of the project, as well as manage the status of each activity.

Programs have more ambiguous start and end dates and are composed of many interrelated projects meant to achieve specific tasks. Environmental changes are continually incorporated into a program. Therefore, program managers need to control the overall pace of the projects and benefits realization of the deliverables. Effective tools may be Benefit Maps and Dependency Networks that clarify relationships between benefits and projects as well as project dependencies. “Pace” includes the prioritization of activities based on dependencies and benefits, interests, cash inflows, rollout plans, and stakeholder relationships. Priority management focuses on the realization of benefits that enable programs to contribute to the overall value of organizations and reduce the unpredictability derived from the pursuit of short-term economic benefits.

From Cost Management to Overall Resource Management

Project cost management includes cost assessments, budgeting, and cost control, making it possible for projects to complete within approved budgets. However, program budgeting includes costs of supporting activities and investment in supporting structures. Program managers participate in setting project budgets but often need to adjust periodically to allow programs to achieve organizational goals successfully. The program retains control over resource allocation to the individual projects, including shared resources that demand constant coordination. Additionally, as budget management is closely related to suppliers and customers, program managers should devote themselves to building long-term and stable relationships with sources of resources as well as sources of additional funding. Program budgets focus on the realization of future financial and nonfinancial benefits, encompassing a wide scope of resources rather than pure monetary benefits, while cost management still continually reviews preset benchmarks to avoid disparities.

From Quality Management to Benefit Management

Quality is one of the key success factors of projects, and quality management focuses on both the processes and the final outputs, to encompass all activities involved in meeting customer demands. However, in programs, benefits are seen as key success factors. As demand and expectations are closely linked, quality management in programs focuses on the achievement of strategic goals, which may change over time.

Benefits are not only the ultimate goal of programs but also a means of monitoring implementation effectiveness. Program managers should be committed to the pursuit of benefits, rather than focusing on new products or development of production technology, as these are merely processes for reaching final benefits. Benefits are directly related to strategic goals, but contributions cannot be fully assessed until program outputs are put into operation or are made available on the market. Therefore, program managers need to look at benefits over the entire life of a program to determine how this contributes to overall strategic goals.

Elevating Stakeholder Management

In projects, stakeholder management is primarily a function of information exchange regarding requirements determination of the output, resource acquisition, and progress reporting. Stakeholder management in programs is an interactive relationship that encompasses stakeholder contributions to a program and selection of team members. Programs have a larger range of stakeholders than projects to perform many of the main functions of knowledge and resource acquisition, but further to external groups that influence both goals and means.

Additionally, since many program stakeholders often have greater formal authority than program managers, program managers need to influence and convince stakeholders to pursue overall interests. The politics are magnified. The need to promote the program and its benefits increase dramatically. The reach both internal to the organization and outside the organization is broader and more complex. Thus, program managers must understand the positions and attitudes of numerous stakeholders, how stakeholders exert influence, and the sources of stakeholder authority. Mature organizations will demonstrate strong stakeholder management capabilities and develop corresponding systems for stakeholder assistance.

From Communication Management to Marketing Management

In projects, communication management is a process where communication paths, frequency, and causes ensure collection, storage, and dissemination of relevant information. However, when a project is part of a program, the communication between projects and organizations or programs need to be more specific. Therefore, communication planning is part of the initial project proposal rather than a part of the project itself.

In programs, the term marketing refers to more than just advertising, and is rather a core element of value creation that includes concepts of value identification, resource provisioning, and communication. Good marketing integrates strategy and is one of the key success factors of programs as it can facilitate the management and participation of stakeholders. Marketing management is an interactive communication system applied to obtain the support of stakeholders and meet their specific needs with targeted benefits. Identification of benefits, as well as techniques for benefits realization and effectiveness of outcomes, maintains motivation for stakeholder cooperation and at the same time facilitates rapid decision making.

From Risk Management to Uncertainty Management

Although the goal of risk management is to reduce the probability and impact of negative events on projects, this often sets a constraint on project activities. Uncertainty management provides a more comprehensive perspective, taking into account potential threats and opportunities and the overall organizational viewpoint when considering risks and their relevant impact. Project risk management relies purely on data analytics and rational decision making, but complex projects and programs involve many factors and changing circumstances, and therefore is difficult to predict risks and mitigations based on historical data. Therefore, uncertainty management helps to avoid deviations from the ultimate goals of the organization. Uncertainty in programs is often managed through iterative cycles of defining goals for early projects, refining them for new projects based on monitoring the environment, and launching new projects when a specific need can be addressed by the deliverable of a new project.

From Procurement Management to Partner Relations and Value Chain Management

In projects, supplier partnerships are often based on short-term contracts. In programs, contractors, such as consultants and suppliers, are not responsible for a limited material or task, but rather are involved with multiple projects and longer term contracts, often on-demand. Authority is transferred from the person responsible for the contract (the program manager) to the organizational level, which requires program managers to negotiate with the most influential stakeholders. Maintaining a long-term partnership is highly important.

A program can be thought of in terms of a value chain that includes several different actors to generate internal and external outcomes, as shown in Figure 4.3. Learning enables customer needs to be accurately delivered to suppliers, while the performance of the suppliers generates value that feeds back through the project to reach the final customer (internal or external). Each stage inward reveals additional information about the value expectations of the customer. Each step out transforms supplier output into a valued facet of the final program benefits. Organizations prefer durable partner management at the supplier interface rather than piecemeal procurement management when acquiring external resources.

Figure 4.3 The value chain of programs requiring external suppliers

Vision-Led and Emergent Programs

Vision-led programs are the more mature type of program and are based on strategic goals. Program complexities and ambiguities require a great deal of flexibility in the initial stage, and visions should be clearly stated before launch. A vision-driven approach is based on clear-cut goals, but program sponsors may still override implementation plans or make major changes during the formulation stage. Contributions of a program are not judged in a purely economic fashion, but rather by a wider range of organizational benefits.

The success of a vision-led program depends on the adoption of an organic approach that focuses on innovation, flexible changes, and employee empowerment rather than a fragmented, control-oriented, mechanistic approach. Organizations that pursue risk minimization rather than maximization of opportunities find further obstacles to implementation. The primary goal for vision-led program managers is to create a business plan to clarify the program vision and organize to prepare for change. While environmental changes may influence different aspects and require the cooperation of all units, stakeholder management can help all managers to achieve individual and organizational goals simultaneously.

Emergent programs form because potential sponsors find that new projects or activities could be more effective when integrated with other projects having similar goals and share extensive resources. In emergent programs, several projects are included, and there is a common strategy to reduce negative impacts to project outputs and to maximize effectiveness. Through identification of interdependencies, organizational goals are more closely linked to business interests rather than mere outputs. Once program management takes effect all projects will be individually reviewed, and redundancies or ineffective contributors to the overall program are terminated, delayed, or distributed to other programs, or new projects may come into effect as a result.

For emergent programs, it is necessary to identify a clear vision and stakeholder needs as early as possible to quickly find projects and activities that will ensure the success of the program and to eliminate those who distract from success. Evaluative techniques used in the selection of projects by the organization must apply, perhaps in an expedited fashion. In practice, many programs are categorized as emergent programs, where projects are mostly initialized according to the needs of each business unit. During budget reviews, these projects are linked to organizational strategic goals, budgets are adjusted, and these autonomous projects are seldom considered from a program perspective.

Key Factors of Program Management

The first key factor of program management is decision making. In less complex environments, decision makers usually make immediate decisions based on established guidelines rooted in rationality or expertise. In highly complex but slowly changing environments, for example, in large-scale government infrastructure projects, we often make collaborative decisions, which is to say, we focus on team participation and collective wisdom. However, these two decision-making situations do not apply to highly complex and rapidly changing environments such as those faced by program managers, where the main concern is a clarification of management implications for the entire project collection in dynamic environments (Pellegrinelli et al. 2015; Näsänen and Vanharanta 2016).

Since the nature of program management includes transformation, and the program management team is the implementer of transformation, the program team conforms decisions to three principles:

  1. Value creation requires transformation. Decisions require an understanding of the significance and necessity of the proposed transformation. Program team members and key stakeholders must reach a consensus on any value proposal and understand the consequences of any transformation as well as the consequences of failing to transform. As transformation involves complex environments and multiple stakeholders, there is inherent ambiguity. Unlike uncertainty, ambiguity can be resolved through good management. Management of ambiguity requires a common understanding of the reasons, expectations, and consequences behind any values, goals, or activities. Leadership must ensure that stakeholders first understand the potential impacts of change and reach a consensus on expected benefits.
  2. Achieving a transformation requires the allocation of limited resources and the application of transformational processes. Ambiguity and uncertainty need to be translated into resources and action. For these decisions, traditional project management tools and techniques may prove valid. Project management can reduce the uncertainty of tasks, while program management defines and maintains a vision that allows organizations to adapt to constantly changing environments.
  3. Realizing benefits requires integration of the transformation into the organization to achieve a steady state. When outputs are internalized by an organization, the program management team must establish coordination and good communication with the operational team to determine the best approaches to instill the relevant changes as new capabilities.

Typical decision-making techniques for program management combine learning (value management) and performance (project management). Through the integration of learning and performance-based approaches associated with decision-making and implementation processes, we derive a decision-making framework, as shown in Figure 4.4. This framework is divided into two parts, with one part being the decision-making process, where requirements, problems, and feasible solutions are identified through learning and presented for evaluation and selection. The second part is the implementation of decisions, including planning and execution of selected projects. Results must be assessed and lead to decisions of adjustments to the program.

Figure 4.4 Decision-making process of program management

The second key element of program management is governance. Governance clarifies and maintains project progress through the adoption of appropriate organizational forms for achieving established goals and benefits. Compared with traditional governance models focused on the pursuit of short-term financial benefits from the perspective of shareholders, governance of program management focuses on long-term organizational performance from a collective stakeholder perspective. De Wit and Meyer (2002) defined the three main functions of governance as:

  • Structure: organizational structures that impact and control tasks.
  • Implementation: used to establish strategy processes to enhance future performance.
  • Consistency: ensuring consistency between existing tasks and strategies within a company.

Program governance relies on business strategies, complexities, and stakeholder needs. Visions and goals of program management are established, and then appropriate organizational structures adopted and resources allocated to achieve the vision. One of the key elements of program governance is the establishment of a monitoring system to ensure the right decisions are made, and projects are rescheduled when necessary.

The third key element of program management is stakeholder management. Stakeholders are individuals or organizations that may be affected positively or negatively by programs, or who may have an impact on the outcomes of programs. Management requires analysis, influence, and monitoring of different stakeholders and their needs, including identification of stakeholders, categorization of stakeholders, recording and understanding stakeholder needs and expectations, assessment of expectations, coordination between different stakeholders, finding consensus based on value targets, and implementation of real-time reviews.

The fourth key element of program management is benefits management. Benefits are tangible results that meet stakeholder requirements. Benefits management supplements stakeholder management; identification and realization of important benefits can only be ensured through effective management of stakeholders (Pellegrinelli et al. 2007). Processes include identifying and selecting key benefits, assessing returns, and achieving returns during the implementation.

Program Management Processes: A Life Cycle Perspective

Although there is no standardized management framework or technique for program management, the process of program management follows a specific life cycle where stages follow a pattern of continued repetition individually or in combination rather than a traditional linear process. Research indicates that the life cycle of a program divides into the six stages shown in Figure 4.5, where a formulation stage begins the process with the inception of program goals to meet specific organizational strategies, either existing, revised or new. In this stage, results of a stakeholder analysis are the basis for defining expected benefits of a program and ensure that all stakeholders agree on the goals of the program.

Figure 4.5 The life cycle of a program

The development stage considers the complicated task of crafting an initial implementation plan based on the requirements of the stakeholders’ goals. Key success factors are established, and initial business plans with functional blueprints for both program management and project management are presented.

The organizational stage sets up the project structure and resources to move the organization toward the strategies. In this stage, specific business actions of the program are debated, and the main goal is to organize project collections to achieve program goals through discussion of organizational structures, revenue realization plans, operational processes, and technical blueprints.

Deployment is the phased implementation of the program deliverables. This phase focuses on delivering expected benefits of a program through the development of synergies formed through the management of stakeholders, key project initiatives, activities, and outcomes. Specific activities include management of value chains (stakeholders, management teams, resource priorities, dependencies, risks, and transformations), management of transformation activities, and integration of new capabilities. This stage is often implemented in a looped rather than a linear pattern.

An appraisal is an evaluation of the benefits realized, or not, after deployment. This phase emphases repeated, real-time evaluation of results to determine whether programs have achieved expected profit targets, upon which the program manager should decide whether the program should be continued, redeployed, or immediately terminated. Knowledge management in the appraisal stage is an important element as program management runs in cycles, so the knowledge acquired within one cycle can often be applied to the next cycle, embodying continued learning in program management (Pollack 2012). A decision is made based on the appraisal of whether the program has reached the final goals or further actions and projects are required—leading into a new iteration starting with the formulation.

Dissolution is the end of the program’s life where transformations are completed to a level of satisfaction and benefits captured, allowing reallocation of dedicated resources and a final evaluation of the products and processes of the program in its entirety. Programs may extend over extremely long time horizons, but must have a terminal goal to enable dissolution decisions. This stage also focuses on the transfer of knowledge captured throughout, particularly from the assessment.

Limitations and Challenges of Program Management

At the beginning of this chapter, we pointed out that program management requires a completely new set of management concepts and cultures that differ from traditional project management. As a result, deeply engrained management concepts adopted by project managers are the biggest obstacle to successful program management. Managers continue to apply traditional concepts of project management such as cost savings, risk reductions, and the timely achievement of tasks, and continue to adhere to standardized project management processes and rigid project management frameworks. Changing these existing conceptual frameworks will prove to be a big managerial challenge.

One aspect of most difficulty is that traditional project managers are faced with clear goals and task-specific projects, and adhere to a set of standardized management practices to ensure timely delivery of the final product or services. However, when managing programs where end results may be ambiguous in the initial stages and management objectives may change over time, project managers may find that they are “stretched,” as they do not have the appropriate managerial capabilities. Unlike traditional project management, program management requires managers to have a tolerance for uncertainty and ambiguity. Managers who lack this basic characteristic may find difficulties in managing programs.

Program management focuses on sets of projects that still target a common goal set. A program lacks the scope required for a complete organizational overhaul. For example, we mentioned that a program might consider a transformation to penetrate new markets, to implement new quality control systems at multiple levels in the organization, to alter a corporate culture to become more consumer oriented, or adjust to new legislation or social expectations. However, what if one wanted to accomplish all of these transformations? Program management practices could not handle such a variety of objectives. For such situations, we must advance another step and consider the practice of project portfolio management.

Discussion Questions

  1. If a program seems perpetual, what might you do to realize earlier dissolution?
  2. Describe how development of a new product might be a project but development of a new product line might be implemented as a program.
  3. What employment practices might you implement during a program of long duration to ensure availability of talented project managers?
  4. What benefits can you identify for a program to reduce employee turnover? Can you break those benefits into deliverables for multiple projects?
  5. In your organization, who would you include in the decision to dissolve a program?

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