Diving into the world of projects requires a working knowledge of the terms “project management” and “portfolio management.” While these terms may appear to be synonymous, they require different ways of thinking. Knowing their differences may help direct the path of your project management career.
This article defines project management and portfolio management, describes their differences, and the roles and responsibilities of a project manager and portfolio manager.
What Is Project Management?
As taught in Florida Tech’s Mastering Project Management course, a required course in the MBA in Project Management program, a project is “a temporary endeavor undertaken to create a unique product, service or result.”
- A product: This may be a tangible item like a new smartphone model, a skyscraper, or retail store.
- A service: This could qualify as a new software tool to schedule personal training appointments at a gym or a streamlined process for continuing education among employees.
- A result: This might be a medical or research study that provides an outcome the organization can use to take actionable steps.
Understanding that a project has a start and end date is the biggest differentiator between project management and operational management. Projects can be completed by one person, one organization, or multiple organizations.
What Does a Project Manager Do?
Project management requires hands-on management and attention to detail. On a day-to-day basis, a project manager is typically responsible to plan, schedule, monitor and control the work that is done on a project. Project managers may work with a handful of project team members including a project sponsor and business analyst. Common activities completed by a project manager include identifying requirements, managing stakeholder expectations, managing project constraints, and managing project change.
Sometimes when there are multiple projects that are connected, they are grouped into a program. That program is then managed by a program manager who handles the financials, allocates company resources, communicates with stakeholders across the organization, and ensures the program is aligned with business goals.
What Is Portfolio Management?
According to A Guide to the Project Management Body of Knowledge (PMBOK® Guide) Sixth Edition, portfolio management is “the centralized management of one or more portfolios to achieve strategic objectives.” Some companies have a project management office (PMO) that handles this for the entire organization.
A PMO acquires required project resources, establishes consistent project management standards, methods and procedures, serves as a repository for project management reports and ensures that an organization’s portfolio projects support business goals.
What Does a Portfolio Manager Do?
Portfolio management may be completed by senior management as they have access to company resources, work to help remove any impediments for projects and programs and have the authority to decide to approve or deny a project.
The portfolio manager may also be responsible for the following:
- Planning project milestones
- Staffing projects and ensuring the right people are assigned to the correct project in order to maximize talent
- Working with project managers to train or help them with any issues they may encounter
- Prioritizing projects in a way that aligns with the organization’s mission and strategic goals
According to the Project Management Institute’s 2020 Project Management Salary Survey, the median annual salary of a U.S.-based portfolio manager is $138,000.
Develop Your Project Management Skill Set
If you are interested in learning more about project management, portfolio management and other project management careers, Florida Tech offers a 100% online MBA in Project Management that teaches students foundational knowledge in all areas of business, including project management strategy, strategic decision making and leadership challenges.
PMBOK is a registered trademark of the Project Management Institute, Inc.