I was recently asked,

What do you consider to be the most important ingredients in a Project Management Organization (PMO)?

My answer to this question comes in three sets of ingredients. The first set of ingredients define the purpose of – and relationships between – IT Portfolios, Programs and Projects.

Figure 1 - Relationships between IT Portfolios, Programs & Projects

IT Portfolio Management - Select and manage the portfolio of opportunities for IT to contribute business value to the enterprise. Leading practices often use IT spending categories like: Infrastructure (maintain the steady state), Transactional (to reduce costs), Informational (improve decision-making) and Strategic/Risky (make transformational improvements).

IT Program Management - Manage a defined set of interrelated projects that support common business outcomes.  Focus on maximizing the business value or impact of IT dollars, even if it means delaying or killing some projects or programs when they no longer best meet business priorities. This also includes juggling resources and other interdependencies to maximize project synergies.

IT Project Management - Manage resources to complete a specific scope of work on time, on budget and to customer satisfaction. Follow a consistent methodology across projects.