Agile portfolio management for a fast-paced world
Challenge: how can we help businesses move to Agile Portfolio Management?
In recent years, business has changed a lot. Customer expectations have sky-rocketed and everything has become more digital – and more competitive. While most companies now implement some agile methodologies in many areas of their business, portfolio management seems to be stuck in the past. But for the companies that want to implement agile portfolio management, there are important questions: what does agile portfolio management look like, and how can we implement it?
Let’s quickly recap what agile portfolio management entails: it focuses on the creation of value streams where stable teams are formed for a longer period of time. These teams have a clearly specified mission and an end-to-end responsibility for a product or service, enabling the assessment of the value that is created, instead of looking at specific results.
What is Agile Portfolio Management?
To illustrate this, let’s start with the traditional method of portfolio management: imagine a team running a project on the improvement of a website’s search box. Once completed, the result is passed on to a team testing and implementing the renewed functionality. Any changes will be made by the first team, resulting in a complex web of information transfer and project planning. The teams’ focus is on the product instead of the functionality of the product.
Agile portfolio management, on the other hand, charges a team with the bigger task of ‘increasing the number of bookings through the website’. This team would work on the improvement, testing and implementation of the search box, as well as the presentation to the client and the process of subsequent feedback. Thus, an agile portfolio management approach is successful by not only making the team responsible for the software development task, but for the full life cycle of the software in the spirit of ‘you build it, you own it’. Focused on value creation, almost like a small startup. Such a ‘product vs. function’ orientation of teams is better suited for the creation of new products and services.
Our solution: 5 steps to lay the foundation
The overall answer would be for higher management to lay out the tracks, allowing their teams to do what they do best. However, we see that in many cases, companies apply the agile methods without putting the organization in place, first. Therefore, we advise taking the following steps:
- First of all, large strategic initiatives are identified in so-called Portfolio Epics, slicing strategic objectives into smaller increments that are easier to implement and to prioritize. Division into smaller, trackable items allows for a transparent connection of strategy to day to day operations. Teams understand how their work contributes to the bigger picture, and business owners understand what individual teams work on over time.
- The portfolio needs to be transparently prioritized towards value creation, based on quantitative (numbers) and qualitative (data) scoring models, and corresponding metrics. For example, a quantitative aspect of a scoring model would be the size of investment. Qualitative aspects would include business value and risk. As for metrics, quantitative ones focus on progress or the team’s velocity. Qualitative metrics are used to look into team or client satisfaction and strategic benefits.
- A third step entails the identification of the value streams of agile teams and continuous steering on value in the smaller increments. This is where the before-mentioned feedback loops come into play: in these regular review meetings project progress is demonstrated to the client, feedback is given and subsequently, readjustments are made.
- A fourth step enables direct funding of these value streams while maintaining oversight on Epics, using automated online tooling and cadence-driven reporting. The time saved by applying these tools will allow our CEO to create a clear map of the value that is being created
- As a fifth step, the portfolio needs to be connected to the innovation labs, for fast detection of business opportunities. The portfolio needs to explicitly fund for innovation using separate initiatives and slack in teams, creating room for innovation and new business ideas.
Finally, new business can be created through continuous positive feedback from customers, innovation labs, and workforce.
"In many cases, companies apply the agile methods without putting the organization in place, first".
Results: Gamified learning to access manifold rewards
In the end, the rewards are manifold: from increased collaboration and transparency to better planning and efficient use of resources. Not to mention the revenue growth seen at agile companies. Other benefits include:
- Better alignment to the company’s goals and client’s needs
- Better internal collaboration across departments by connecting business and IT in dedicated teams
- Better planning and use of resources
- More transparency creating a shared vision throughout the organization.
In other words, decision-makers can sit back and relax, because they know at any moment in time they are doing the right things, right. We decided to develop an Agile Portfolio Management Game to help people to understand how it works. In a mere 45 minutes, users can learn about the core methodologies and start defining an organizational Portfolio Scoring Model.
- Would you be confident enough in your knowledge to advise a company to follow a full digital transformation? Maybe Consulting or Strategy could be a good fit for you
- Do you think you would enjoy finding effective solutions for complex technology implementation problems? Then maybe you would be great in Operations or Technology
- Would you want to explore the possibilities that come with new technologies or develop fantastic user experiences? Try Digital or Technology
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