Portfolios, Programs and Projects – The NEW Definitions in PMBOK 8th Edition

In the value-delivery system of an organization, all 3 Ps – Portfolios, Programs, and Projects – are integral parts. However, interestingly, the definitions of all three have changed in the latest PMBOK Guide, 8th edition. 

Put differently, in the future it will impact all – aspiring Portfolio Management Professionals (PfMP), Program Management Professionals (PgMP), Project Management Professionals (PMP), and Risk Management Professionals (RMP). 

Definitions are important because they create a clear and shared understanding. Without precise definitions, communication can become confusing or misleading, as people may interpret the same word in different ways. 

In management as in everyday contexts, definitions act as a foundation for learning, discussion, and critical thinking. They help us to organize knowledge, set boundaries for meaning, and ensure that our arguments or explanations are consistent, coherent, clear, and logical. 

Read this article carefully – not the way one browses social media feed, forwards or reels in seconds, which brings little to no value. Real learning doesn't happen in seconds or two minutes.

In this article, we will explore these concepts in more detail. In organizations, initiatives typically begin at the portfolio level, so we will first examine the definition of a portfolio, followed by those of a program and a project.

Portfolio Definition

Earlier, we had the following definition:

A collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.

Now, the definition is significantly changed: 

A collection of programs, projects, and operations managed as a group to maximize overall value delivery and achieve strategic objectives, meet mandatory obligations, or generate income streams.

There are a few noticeable differences here:

1. Subsidiary portfolios are no longer mentioned, but in reality, it’ll be there!
2. Overall value maximization is emphasized explicitly.
3. Generation of income streams are introduced for the first time. 
4. In addition, it can be also about meeting mandatory obligations, e.g., legal, regulatory or others.

Above all, the continued focus on achieving strategic business objectives is there.  

The "generation of income streams" part is completely new. In fact, it has been added for the first time. In a portfolio context, an organization might run multiple initiatives that each create different income streams, so they’re not dependent on just one source of revenue.

Let’s take an example. You’re running a set of initiatives in a SaaS (software-as-a-service) start-up to get recurring revenue from software tools. These projects, within a portfolio, are not related, but can have some commonalities such as technology being used and hence, part of a portfolio. 

Program Definition

Earlier, we had the following definition:

A group of related projects, subsidiary programs, and program activities that are managed in a coordinated manner to obtain benefits not available from managing them individually.

Now the definition is changed to: 

A group of related projects and program activities managed in a coordinated manner to obtain benefits not available from managing them individually. 

Here we have one difference:

1. Subsidiary programs are no longer mentioned, but on reality, it’ll be there!

Programs are always about benefits and hence value. In addition, it's coordinated management of program components to deliver benefits. 

Program has a dedicated domain called Benefits Management, where we do benefits analysis, planning, delivery, transition, and finally, sustainment of benefits. The whole idea of having a program is to have coordinated work in order to deliver benefits/value to organization. 

Project Definition

Earlier the definition of the project was:

A temporary endeavor undertaken to create a unique product, service, or result.

Now the definition has changed and it is: 

A temporary initiative in a unique context undertaken to create value.

This is a real change of words here. The differences are:

1. No longer an endeavor, but an initiative.
2. Context has to be unique.

The initiative word confuses many. It need not be the case. 

As I've written here many times at ManagementYogi, an organization's strategic plan is subdivided into a set of organizational initiatives influence by the market conditions, customer requests, or obligations etc. to be met. 

Next, a number of initiatives are grouped into a portfolio. In other words, a portfolio can contain proposals for various initiatives such as projects, programs, subportfolios, operations etc. It can also encompass already existing projects or programs within an organization. 

In that sense, the definition of a project is perfectly aligned with portfolio and its management. Because a project is indeed is an initiative within a portfolio. 

The other aspect is the uniqueness of context. It’s possible for two projects to involve constructing two identical buildings, but the context can still differ. For example, the location, technology, and resources may vary between these projects. Isn’t that right? 

The most important one is the final aspect of the definition – creation of value. Project is now about creating value, not deliverables as was the case earlier. 

Figurative Representation 

The following figure outlines portfolios, programs, and projects in an organization.

                                 

As shown above, an organization’s vision, mission and strategic objectives are documented in the strategic plan. This plan is subdivided into a set of initiatives. Initiatives are then grouped into portfolios. 

Portfolios of programs and projects in an organization provide the value delivery system. And, as we just learned, all 3 Ps – Portfolios, Programs and Projects – are about creation, enablement and/or maximization of value delivery.

Conclusion

If you've followed my books and/or used my courses, you'll know that I say the following:

Project creates and delivers. Programs coordinates and guides. Portfolio decides and drives.

For more details, check out this article and also Part 2.

By now, you would have noticed that a shift has occurred across all three Ps toward value delivery. I'll change it from the value delivery perspective. 

Project creates and delivers value. Program coordinates to obtain benefits and value. Portfolio maximizes overall value. 

I can also shorten it further and say:

Project creates value. Program coordinates benefits/value. Portfolio maximizes overall value.

References:

[1] PfMP Live Lessons - Guaranteed Pass or Your Money Back, by ManagementYogi.com

[2] PMP Live Lessons - Guaranteed Pass or Your Money Back, by ManagementYogi.com

[3] RMP Live Lessons - Guaranteed Pass or Your Money Back, by ManagementYogi.com

What Does it Take to Be a PfMP? If it Were Easy, Everyone Would Do it!

Becoming a Portfolio Management Professional (PfMP) from the Project Management Institute (PMI) requires more than just passing an exam. It demands a strong understanding of portfolio management concepts, the right mindset, and consistent preparation. 

PfMP is PMI's highest-level certification. 

Unlike project or program management, portfolio management is strategic in nature and focuses on selecting and governing the right investments for an organization by choosing the right components in a timely manner. 

As I keep saying:

Projects create. Programs guide. Portfolios decide.

At the portfolio-level, you decide the components to take or drop, the investment to make or cancel, and of course, the strategic business objectives to be met.

Your success in the PfMP journey depends on how well you understand the underlying processes, apply concepts in real-world contexts, and prepare with disciplined practice. 

The following key points provides practical guidance to help you approach your PfMP preparation in a structured and effective way.

There are two assumptions: a) Your application has been approved following PMI's panel review. Management Yogi provides support for it. b) You've decided to prepare for and proceed with the PfMP exam.

The following ones are based on my interactions and experiences with certified PfMPs as well as enabling many professionals to become certified PfMPs over the years. 

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1. Understand the flow of Portfolio Management processes.

In portfolio management, there are multiple process groups, processes as well as knowledge areas. It's easy to get lost with such vast content. 

This is where understanding the flow of processes becomes important. The flow helps you build a mind map and clearly presents the big picture in a narrative way. When you prepare in this manner, you gain a clear understanding of what portfolio management, as illustrated by PMI, is all about.

Most providers of PfMP courses don’t understand this flow, but it is very important. 

2. Learn with hands-on tools whenever you can.

Portfolio management is fundamentally different from program or project management. You need to learn it with a different mindset. 

Using software tools such as Primavera or MS Project adds clarity. With just theory, achieving that clarity is difficult.

In addition, there will be plethora of tools and techniques (T&Ts). Software tools will help you tackle these T&Ts.

3. Use high-quality questions.

In your PfMP exam, questions will be of a high standard. They are situational in nature and will ask what to do next, what you should do, or even, what you should not do! Rote learning will not help. You must understand the concepts.

You can expect confusing, puzzle-like questions. Sometimes they can be frustrating – for example, all choices may seem valid, or the question itself may not be very clear. 

Don’t expect the questions to be grammatically perfect or linearly structured. They are designed to challenge you. They are not testing your grammar or linear thinking, but these:

• Are you truly suitable to be a portfolio manager?
• Can you apply portfolio management concepts in the real-world?
• Are you psychologically prepared to grasp and apply these concepts?
• Can you apply various portfolio management tools and techniques?

These insights come from high-quality questions. If you want low-quality ones, the internet is full of them. Everyone claims to be an expert on the web, but reality is different.

4. Always remind yourself: "There is no shortcut. I've to work for it."

You must truly work hard to become a PfMP. As the saying goes: 

On the highway to success, there are no shortcuts. 

You not only need the required portfolio management and business experience, but also sincere preparation. 

If you expect a magic wand or quick tricks to succeed in days or weeks, you will be disappointed. Again remember, there are no shortcuts. 

5. Choose a truly good and simplified course.

Your chosen course must be good, understandable, and digestible. Because portfolio management is vast, it’ll take time to digest. With the right course, your learning will be effective. Of course, real-world portfolio management experience is also important. 

Online learning is preferred because:

• You can access it anytime, from anywhere in the world.
• You can revise as many times as you want. You can also focus on areas where you are weak or not scoring well.
• You can learn at your own pace without feeling rushed or held back.
• It is usually more cost-effective, saving on travel, food, and accommodation.
• The duration is longer compared to classrooms. You can balance learning with your professional and personal commitments.

With a good mentor, you can ask questions and get them clarified.

The course creator or your PfMP coach plays a significant role in your journey. 

6. Practice, practice and practice.

The old saying “practice makes perfect” is true. The more you practice, the better and more confident you become. This complements the previous one, i.e., a good course.

The tools, techniques, content, explanations should be top-notch and high-quality. Practicing with high-quality material gives you the best value. You’ll also remember more when you practice more. 

7. Have a different mindset – the strategic mindset.

Portfolio management is strategic in nature, whereas program and project management are usually tactical. Portfolios focus on choosing the right work, while projects and programs focus on doing the work right. 

Selecting the right work for an organization is inherently strategic.

Projects and programs deal with execution, whereas portfolio management is more business-oriented. This is where key investment decisions are made. Hence, while going for the PfMP, you need to have a strategic mindset. 

8. All domains are important: Strategic, Governance, Performance, Communication, and Risk.

Your PfMP exam is based on the Examination Content Outline (ECO), not strictly on PMI books, references, or standards. 

The ECO provides the blueprint for the exam.

Unfortunately, many courses follow their own templates without mapping to the ECO domains or tasks. If you prepare this way, you risk failing the exam. 

9. Stay in touch with your coach. 

Throughout your preparation, your coach – most likely the course creator – will be extremely important. He or she will motivate, inspire, and guide you. 

In addition, as I've seen, when you stay in touch, you are more likely to prepare consistently with patience and in the end, it works out better for you.

Some may charge high fees but won’t provide proper support or guidance. In such cases, success becomes difficult. Many also don’t know the exact content needed to be a PfMP!

Your determination matters greatly and there is no substitute for it. Consistent support is also important. 

10. Never give-up.

Success is not final and failure is not permanent. Life itself is a continuous learning process. We learn every day until the end. 

When you understand this, giving up is not an option.

Becoming a PfMP is not easy, and as the tile of this article goes – if it were easy, everyone would do it.

You've a dream to be a PfMP. Pursue that dream. Dreams do come true and many have become PfMP with my PfMP courses and/or PfMP book. Check out few of the PfMP SUCCESS STORIES.

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There are very few PfMPs in the world, unlike PMPs, which have around 1.5 million certified professionals. In comparison, the number of PfMPs is significantly lower. In fact, it’s not even 1% of the number of PMPs! Yes, not even 1%!

You can now understand the significance of the PfMP certification. There are tens of millions of project professionals worldwide. Only a small fraction pursue the PMP certification. 

Hence, achieving the PfMP places you among the top 1% of the top 1% within PMI’s PPP certifications and gives a boost to your career. It also serves as a strong differentiator in your profile and resume.

ManagementYogi’s PfMP courses have a proven track record, with many candidates successfully becoming PfMP certified. Some even achieve this without holding a single PMI certification beforehand!

These courses and books will help you understand, learn, and apply the required concepts and ultimately become a certified PfMP.

PfMP Exam Courses and Book:

[1] PfMP Live Lessons - Guaranteed Pass or Your Money Back, by ManagementYogi.com

[2] PfMP Exam Prep Online Course with Money-Back Guarantee, by ManagementYogi.com

[3] PfMP Exam Prep Book – I Want To Be A PfMP, First Edition, by Satya Narayan Dash, CIPSA, CHAMP

Program Change Request Management (PgMP) and Flow – The Standard for Program Management

Change is inevitable in every walk of our lives. Project, program, and portfolio management (PPP) are no different. However, the way changes are handled will differ in respective P-P-P management. 

Projects handle change with respect to the baseline and success is typically measured in terms meeting various constraints such as scope, schedule, cost, quality etc. Programs, on the other hands, takes a group of interrelated projects (and/or subprograms) to deliver benefits, which is otherwise not possible if you manage them individually. Hence, the program success is mainly about delivering benefits coming from outcomes of a program's components. Programs accept and adapt to change to optimize delivery of benefits. For portfolios – in sharp contrast – it's fundamentally about managing strategic changes.

Hence, I keep on saying in my interactions with Program Managers:

Projects are agents of change. Programs are coordinators of change. Portfolios are strategists of change. 

In this case, I'll focus on Program Change Management, which is key topic to know for aspiring Program Management Professionals (PgMPs) from Project Management Institute (PMI). 

For PMP change management flow, refer to this article. It’s one of the most-read articles. To understand deeply with lots of visuals and exercises, refer to the Guaranteed PMP course.

For PfMP change management, refer to this course: PfMP Live Lessons – Guaranteed Pass, which goes deeper into the strategic change management.

Note: There is no concept of processes or knowledge areas in PMI's Program Management Standard (SPgM). Rather we have various supporting activities and of course, the core activity of Program Integration Management. 

Program Management is much complex compared to Project Management as it’ll have a number of interrelated components driven together to deliver benefits. Hence, it’s best to simplify in understanding Change Request management for programs. The simplified flow diagram is shown below.

10 Key Points to Understand Program Change Request Management and Flow

Here are the 10 key points about program change request management. The reference for it taken from the Standard for Program Management from PMI.

1. A Program Change Request (PgCR) is a formal proposal to modify any program document, deliverable, or baseline. A PgCR can be a corrective action, preventive action or an update to program-level document.
2. During program formulation, we have the change assessment in the Program Change Assessment activity (shown above). The output of this activity is the Program Change Assessment. It happens with other assessments related to scope, schedule, financial, information, risk, quality etc.
   This helps in preparation the Program Charter (PgC), which in turn enables the preparation of the Program Management Plan (PgMP).
3. Our next activity is the Program Change Management Planning activity (shown above) in Program Definition phase. Here we create the Program Change Management Plan (PgCMP). It's a subsidiary plan of the PgMP. 
4. The Program Change Thresholds are also decided in the above-mentioned planning activity. The thresholds inform the level of change thresholds that should trigger the change process. For example, above 10% budget impact will be handled at the program level. 
5. The Program Change Management Plan (PgCMP) has the approach for capturing the change requests, evaluating each change, determining how to dispose the change, and communicating the decisions to the (impacted) stakeholders. 
6. The PgCMP is then fed into the next activity, i.e., the Program Change Management activity (shown above). It has both executing and monitoring & controlling aspects. This activity belongs to the Program Delivery Phase of the Program Life Cycle. 
7. All Change Requests are logged in a program-level document called Program Change Log. This log is created during the Program Delivery Phase and it’s created in the Program Change Management activity.  
8. The Program Steering Committee (also known as Program Governance Board) decides to approve or reject a requested change. Whatever may be the decision, it's recorded in the Program Change Log and the decision is communicated. Program Change Control ensures it. 
9. The PgCR, if approved, is called Approved Change Request. It is then implemented based on their urgency and impact assessment and the one most likely to deliver program's intended benefits is selected. Implementation can result in the updates to component plans as well subsidiary plans of the PgMP. 
10. The Change Decisions are always in the accordance with the Program Governance.
    The Program Governance Board or an appropriate body is responsible for defining the types of changes that a program manager can independently authorize/approve or that would require further discussion prior to approval.

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The three key activities in Program Change Management cleanly maps into the various phases of the Program Life Cycle. It's shown in the below table.

That’s it! 

Was it difficult to understand? I believe it’s not. 

Again, do note that I’ve highly simplified the concept of program change management. As you go deeper, you’ll find many aspects to program change management. 

Nevertheless, simple things are always easier to remember, recall, and apply. 

Finally, as I close, I'll say this:

For projects, it's about integrated change control. 

For programs, it's about program governance and coordinated change control. 

For portfolios, it's about portfolio governance and strategic change management. 

Change Management:

[1] Change Request Flow (PMP) - PMBOK Guide 

[2] PfMP Live Lessons - Guaranteed Pass or Your Money Back

[3] PMP Live Lessons - Guaranteed Pass or Your Money Back