A life cycle defines the inter-related phases of a project, programme or portfolio and provides a structure for governing the progression of the work.
All projects, programmes and portfolios are designed to deliver objectives. These objectives may be expressed as outputs, outcomes or benefits. A P3 life cycle illustrates the distinct phases that take an initial idea, develop it into detailed objectives and then deliver those objectives.
All life cycles follow a similar high-level generic sequence but this can be expressed in quite different ways. Life cycles will differ across industries and business sectors.
The most common type is the linear life cycle, sometimes known as the linear sequential model or waterfall method. In addition to the linear model, other life cycle formats include:
- parallel – this is similar to the linear, but phases are carried out in parallel to increase the pace of delivery;
- spiral – this is often employed where many options, requirements and constraints are unknown at the start (e.g. in prototyping or research projects);
- ‘v’ – this is applied in software development where requirements are defined and the development tools are well known.
The phased structure facilitates the creation of governance and feedback mechanisms:
- stages – development work can be further subdivided into a series of management stages (usually referred to as ‘tranches’ in programmes) with work being authorised one stage at a time;
- gate reviews – these are conducted at the end of a phase, stage or tranche. Senior management will consider performance to date and plans for the next phase, stage or tranche before deciding whether it is viable;
- post-reviews – learning from experience is a key factor in maturity. Post-project and programme reviews document lessons learned for use in the future;
- benefit reviews – these measure the achievement of benefits against the business case.
All phases of the life cycle are important. No phase should be omitted but they may be adjusted to accommodate the development methodology and context of the work.
The scope of a project life cycle can take various forms to suit the context. Some projects will be part of a programme and will only be concerned with delivering outputs (the traditional project life cycle). Some projects will be expected to incorporate the management of change and realisation of benefits (the extended project life cycle). Some applications (e.g. whole life costing) may consider the full product life cycle.
Where a contractor is working for a client, the contractor’s ‘project’ may simply be the development, handover and closure phases of the client’s project that will include benefits realisation.
A typical, linear project life cycle is shown in figure 1.4 below:
Figure 1.4: Linear project life cycle
- Concept – this phase develops an initial idea and creates an outline business case and schedule. A sponsor is appointed and, if possible, a project manager. Sufficient analysis must be performed to enable senior managers, led by the project sponsor, to make two decisions:
- Is the project likely to be viable?
- Is it definitely worth investing in the definition phase?
- Definition – the preferred solution is identified and ways of achieving it are refined. The project management plan (PMP) is developed. This, together with the business case, has to be approved by the sponsor before progressing to the next phase.
- Development – the project management plan is put into action and this phase may be broken down into further stages at the end of which the continuing viability of the project can be reviewed.
- Handover and closure – the project outputs are handed over and accepted by the sponsor on behalf of the users.
- Benefits realisation – where appropriate, a project may include a benefits realisation phase.
The full product life cycle also includes:
- operation – continuing support and maintenance;
- termination – closure at the end of the product’s useful life.
A typical programme life cycle is shown in figure 1.5.
Figure 1.5: Linear programme life cycle
- Concept – this establishes the vision and outline business case for the programme. A programme board is created to oversee the phase and provide a mechanism for approvals. The expected benefits are outlined and initial programme-level documentation is prepared. Sufficient analysis must be performed to enable the programme board, led by the programme sponsor, to make two decisions:
- Is the programme likely to be viable?
- Is it definitely worth investing in the definition phase?
- Definition – the vision is developed into a detailed specification of the end state of the programme, sometimes referred to as a blueprint. Outline plans and business case are further developed so that the sponsor can make an informed decision to proceed with the programme.
- Project delivery – this phase is usually broken into groups of projects called tranches that deliver beneficial change in their own right. A review at the end of each tranche assesses the continuing viability of the programme.
- Benefits realisation – as new outputs are delivered by projects, transformation work has to be done to ensure new ways of working become embedded in business-as-usual. Benefits will be measured and compared to the baseline in the business case.
- Closure – closure of the last projects, closure of budgets and disbanding the programme management team.
The realisation of benefits will usually continue after the closure of the programme. Some members of the programme team (typically the programme sponsor and business change managers) will continue in their roles to ensure that benefits are realised as required by the business case.
Unlike projects and programmes, portfolios are less likely to have a defined start and finish. Portfolio management is a more continual cycle coordinating projects and programmes. It may, however, be constrained by a strategic planning cycle that reviews strategy over a defined period. If an organisation has, for example, a three-year strategic planning cycle, then the portfolio cycle will have a start and finish within that period.
Figure 1.6: Portfolio life cycle
The objectives of a portfolio are created by strategic planning. The aim of the portfolio is to deliver the objectives and realise the corporate strategy through the coordination of projects and programmes.
The phases of the portfolio life cycle are less likely to be linear. At any point in time the emphasis will be on one phase or another, but aspects of all may be undertaken.
- Define – the projects, programmes and change to business-as-usual required to meet strategic objectives are identified and evaluated in a selection process that maximises the effectiveness of the portfolio.
- Categorise – the projects and programmes may be organised into ‘sub-portfolios’ or groups that share certain characteristics, such as alignment with particular strategic objectives.
- Prioritise – priorities can be set by strategic objective, return on investment or any other chosen metric. On the assumption that no organisation has sufficient resource to do everything it wants, the prioritisation process forms the basis of the next phase.
- Balance – the portfolio must be balanced in terms of risk, resource usage, cash flow and impact across the business.
Portfolio management may incorporate the overall governance of projects and programmes within an organisation.The portfolio management team may be responsible not only for coordinating the projects and programmes, but also for improving the maturity of project and programme management.