The Program-Portfolio Risk Link

Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected]. Andy's new book Risk Management for Project Driven Organizations is now available.

  Risk Management   ProjectsAtWork  

A portfolio can drive changes into a program and vice versa, thus creating risks, changing existing ones or indirectly impacting them through other constraints. This requires a close working relationship between portfolio and program managers. It also presents a challenge of weight decisions about today’s problems versus tomorrow’s.

Last month I began discussing organizational risk management at the program level and explained the concepts of risk downloading and uploading (see “Risk At the Program Level”). This month I want to consider the relationship between program-level risks and the portfolio. I also want to explore how the factor of time complicates program risk management.

The focus of the last article was on the relationship between a program and the projects within it; that is where programs will spend a lot of their time. However, while the program and its projects may be a self-contained unit, they don’t exist in isolation. At any given time the portfolio may drive changes into a program, directly creating risks, changing existing risks or, more likely, indirectly impacting them through other constraints.

Consider for example a project that falls short of its revenue goals elsewhere in the portfolio. The portfolio manager needs your program to deliver earlier in order to make up the revenue shortfall and keep the overall portfolio on …

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