As a current student in IT Project Management program at Stockholm’s university and at the same time an agile practitioner, the first thing that came to my mind was if agile can be used in portfolio management. After reading about portfolio management I see that agile management can add big benefits to portfolio management and agile practices that are used in product management can be applied to portfolio management also.
Very interesting on the topic was a podcast that I listened to from Brent Barton, one of the first certified Scrum trainers. See a summary of the podcast below:
When agile portfolio management works the best
Agile professionals focused on products are using portfolio management techniques when they have to manage more than one products at the same time. Product portfolio management will ensure to use the best resources, people and money at the right time to produce the best value for your products. This is called maximization in the product world.
Portfolio management is viewed in a different way form agile practitioners. Agile practitioners have a certain view for business agility which is to leverage iterative delivery to constantly add value to the products, justify the organizational investments and align with the company goals. Long term investments can work in a project, but managing short term investments in key components of the portfolio is what will work the best. This is the difference when managing products in a portfolio. Have a long-term vision but always keep the focus on the short-term investments that need immediate action and we need to manage the balance in our portfolio. This will make us move faster and don’t make long term commitments which will make the portfolio objects difficult to manage.
Involving agile professional in portfolio management
Agile is all about small teams that know what they do and cooperate effectively. Teams that stay together and rebuild after the project ends and they start working in another project can help holistically the products inside the portfolio. It is not only about the technologies used, but also about the way of working. Scrum teams do the sprint review sessions and have already identified ways of working better. Having these people work for other components on your portfolio could be key. These IT people should be involved in the portfolio management decisions as they know the ins and outs of the items. Authority and decision making rights should be given from the top to the bottom of the organization in these cases.
Constructing your agile portfolio
The first thing to consider is the right size of the portfolio. The general rule is that portfolios are managed better if they don’t have many items inside. Then there will be a need for “a portfolio of portfolios”. Some companies don’t even need a portfolio. They have one product and this can be managed outside a portfolio. If there is such a case better don’t try to include components and make a portfolio but product management will suffice. The right way when you have a portfolio is to prioritize the items according to the value streams. Below are 5 key principles in this case
- All work is forced ranked.
- Operate on “good enough” data.
- Near-term capacity is fixed.
- Each unique value-based delivery capability has a portfolio
- Each portfolio has one “intake system.”
How to manage an agile portfolio
An important aspect in managing an agile portfolio management is coherent teams. Product teams work better if they know that they belong to a team focused on a component of the portfolio and will not change after some time. These teams are the best to create estimates for components of the portfolio and will know better the impact if we adjust any item in the portfolio.
The product owner is the one who is determing on the priorities to pursue and he should be included in portfolio management. He is able to estimate better than anybody else. In this case is best when you are roughly right than precisely wrong. You should always estimate in team weeks. You should avoid the mentality of “build it and they will come” and keep constant agility in the process by getting feedback if you added value t the product.
Risks involved in agile project portfolio management
Of course, there are time that agile portfolio management fails. This happens mostly in large companies that try to implement agile at scale. This is because agile is a way of working that is recently introduced to big companies and some of them are still in the process of transitioning to that. There are some companies that this way of working might not work. The secret here is to accept it and don’t try to force it. Some companies are trying to force agile even if they have indications that it will not work in their organizations. Then it is better to work with change management and start from small scale and product teams.