Intro to agile portfolio governance v6


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Every large enterprise needs to manage portfolios of business initiatives. Portfolio Management encompasses

• The formulation of initiatives, and the assessment of their value, effort, and Return on Investment

• The approval and scheduling of initiatives

• The evaluation of the status of ongoing initiatives

• The decision to continue or terminate an ongoing initiative

This webinar will provide guidance on effective ways to conduct Portfolio Management, using our concepts of Agile Governance to simplify and expedite the key decisions. These techniques can applied for Agile, hybrid, and classic plan-driven processes.

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Intro to agile portfolio governance v6

  1. 1. ! ! ! ! ! ! ! Kevin Thompson, PhD, PMP, ACP, CSP, CSM! ! ! Introduction to 
 Agile Portfolio Governance"
  2. 2. Copyright 2013, cPrime Inc. ! 2"2 Who is cPrime?
 Engaged For Your Project-management Success"
  3. 3. Copyright 2013, cPrime Inc. ! 3"3 Who Are You? " 1)  How big is your organization?! 2)  What is the dominant type of project in your portfolio?! 3)  Which of these best characterizes the products you develop?! 4)  What is the biggest issue in your Portfolio Governance?! 5)  Which topic would you most like to see addressed in our next webinar?! "
  4. 4. Copyright 2013, cPrime Inc. ! 4"4 Start Communicating!! •  Download the white paper “Recipes for Agile Governance (RAGE): The Enterprise Web.” " •  Email: " •  Social media: #RAGEwebinar " •  Share ideas and you could win an iPad! " " •  Give a real world example of how a company could use one of the principles discussed in the white paper/webinar.! •  Tell us about the biggest problem you face that this model would address. !
  5. 5. Copyright 2013, cPrime Inc. ! 5"5 After the webinar…" •  We will send directions to collect the PDU you will earn from attending this webinar " •  We will also send a links to the recorded webinar and presentation slides once they are posted online" •  Please hold your questions until the end of the presentation" "
  6. 6. Copyright 2013, cPrime Inc. ! 6"6 About Our Presenter" Kevin Thompson, Ph.D., has a doctorate in Physics from Princeton University, and extensive background in managing software development projects. He specializes in training individuals, teams, and organizations in agile development. Dr. Thompson helps companies make the challenging transition to agile development by working with development teams and business stakeholders to identify their needs, define the right process for the business, determine the steps needed to implement the process, and work through the steps successfully. Dr. Thompson has Project Management Professional (PMP), Agile Certified Practitioner (ACP), Scrum Master (CSM), and Scrum Practitioner (CSP) certifications." Kevin Thompson
  7. 7. Copyright 2013, cPrime Inc. ! 7"7 What will You Learn Today?" •  Basic recipes for Agile Portfolio Management" •  How to develop business cases! •  How to estimate ROI! •  How to make portfolio decisions! •  How to evaluate Initiative status! •  This approach incorporates Principles of Agile Governance" •  Download “Recipes for Agile Governance: The Enterprise Web” from for much more detail!
  8. 8. Copyright 2013, cPrime Inc. ! 8"8 Review: Agile Governance" Governance: The formalization and exercise of repeatable decision-making practices" " •  Governance = how to decide what to do" •  Agile Governance is an Agile style of governance" •  Enables rapid decisions, based on lightweight artifacts developed with minimum effort! •  Applicable to any process (Agile, Plan-Driven, Hybrid, etc.)! Governance Recipe: A mildly prescriptive and customizable technique for making a specific type of decision"
  9. 9. Copyright 2013, cPrime Inc. ! 9"9 Review:
 How the Principles Work Together" Recipes have Standard Elements, including Common Role Types and Categories of Governance Points. We organize deliverables at each level into a small number of coarse- Granularity items, which we rank by value, and for which our estimates for effort, value, etc. should be Good Enough for the current need, and no better. Work is always completed to a Definition of Done, and the Handoff from source to receiver is accomplished through sustained interaction over time." Download Recipes for Agile Governance: The Enterprise Web ! from for much more detail!
  10. 10. Copyright 2013, cPrime Inc. ! 10"10 Review: Levels of Governance" •  Classic perspective" •  Project: Temporary endeavor to deliver a fixed scope! •  Program: Collection of linked projects! •  Portfolio: Group of Programs/Projects to be managed together! •  Classic definitions don’t map well to Agile world, but…" •  Hierarchical organization is still relevant." •  Our levels for Agile Governance" •  Project Level: Refers to work of a single Team, which is a persistent grouping of people! •  Program Level: Refers to the collaboration between Teams! •  Portfolio Level: Refers to the development and management of business Initiatives that lead to program- and project-level work!
  11. 11. Copyright 2013, cPrime Inc. ! 11"11 Levels of Governance"
  12. 12. Copyright 2013, cPrime Inc. ! 12"12 Portfolio Governance Defined" •  We define Portfolio Governance to be about" •  Deciding which Initiatives to undertake, and in what order! •  Deciding whether to continue, modify, or cancel ongoing Initiatives! •  We will examine how to make these decisions quickly and effectively"
  13. 13. Copyright 2013, cPrime Inc. ! 13"13 Portfolio Governance Summary" •  The Area Product Owner provides draft Business Cases for review in Portfolio Grooming Meetings. Program Manager, technical leads estimate effort and give feedback." •  In the Portfolio Planning Meetings" •  The Portfolio Owner discusses new Business Cases with Area Product Owners and Program Managers to improve consensus on the Return and Investment numbers of each Business Case, and to rank the current Business Cases by ROI, and to move approved Business Cases into the Portfolio Backlog.! •  Program Managers provide their assessments of when new Initiatives are likely to begin, based on current work status and Portfolio Backlog ranking. ! •  All discuss current work status, possible changes to plans! •  Portfolio Owner makes final decision to continue, revise, or cancel Initiatives under way!
  14. 14. Copyright 2013, cPrime Inc. ! 14"14 Starting Point: The Business Case" •  A Business Case describes an Initiative’s" •  Concept! •  Value! •  Cost! •  We suggest a one-page Business Case that includes" •  Agile Charter! •  Return on Investment estimate! •  Anything else you need! •  Business case is done (to Definition of Done) when" •  Charter, ROI, other required elements are provided!
  15. 15. Copyright 2013, cPrime Inc. ! 15"15 Agile Charter" •  What it is" •  Simplest useful statement about what the Initiative is intended to do, and why! •  Purpose it serves" •  Generate and maintain consensus understanding! •  Standard elements" •  Vision for Initiative: What the Initiative will produce! •  Mission: What our business will do with the deliverables! •  Success Criteria: How to know if we’ve succeeded!
  16. 16. Copyright 2013, cPrime Inc. ! 16"16 Product Vision"The Product Vision addresses these questions:" 1.  Who will buy and use the product?! 2.  What customer needs will the product address? ! 3.  What category is the product in?! 4.  Which attributes must the product have to address key customer needs selected, which are critical for the success of the product? ! 5.  How does the product compare against existing products? What are the product’s unique selling points? ! “For a (target customer) who (statement of the need or opportunity), the (product name) is a (product category) that (key benefit, compelling reason to buy). Unlike (primary competitive alternative) our product (statement of primary differentiation).”" From Crossing the Chasm, by Geoffrey Moore. © 1999 by HarberBusiness Dig Deep!
  17. 17. Copyright 2013, cPrime Inc. ! 17"17 Charter: Example" Product Vision" For aerospace engineering majors wanting to explore aerodynamics with paper planes, Airplanes for Geniuses is a book that provides an extensive set of easy-to-build planes. Unlike other books, Airplanes for Geniuses gives a concise description of aerodynamic principles at work for each plane, enabling the reader to observe the connection between principles and performance through experimentation.! Mission" Publish and sell a book for aerospace engineering majors, which demonstrates the principles of aerodynamics by using paper planes! Success Criteria" 1.  Available to customers June 1, 2012! 2.  Ship 500 copies through 5 campus book stores in Q3! 3.  Ship 2000 copies through 20 campus book stores in Q4! 4.  Keep profit margin per book above 10%!
  18. 18. Copyright 2013, cPrime Inc. ! 18"18 Return on Investment" •  ROI is key driver for investment decisions" •  ROI=  ​ 𝑅/𝐼 " •  R = Return (some measure of value)! •  I = Investment (some measure of cost)! •  The larger ROI, the greater the benefit for our investment" •  The challenge is in estimating R and I!
  19. 19. Copyright 2013, cPrime Inc. ! 19"19 How to Estimate ROI" Steps are easy to understand" 1.  Estimate the Return" 1.  Total revenues from Initiative! 2.  Net Present Value! 3.  Etc.! 2.  Estimate the Investment" 1.  Effort! 2.  Cost! 3.  Compute ratio" " Sadly, this is not usually possible"
  20. 20. Copyright 2013, cPrime Inc. ! 20"20 Understand the Limits
 of what is Possible" •  The Return is composed of many factors" •  The Effort is composed of many factors" •  Limitations" •  All factors are highly uncertain! •  No factors can be estimated reliably! •  Most factors cannot be tied to real-world numbers" •  What is achievable—and sufficient" •  Understand whether ROI is better or worse for different Initiatives! •  Express Return as weighted sum of standard factors! •  Express Investment as weighted sum of standard factors! •  Define common scale for factors based on relative values!
  21. 21. Copyright 2013, cPrime Inc. ! 21"21 Example ROI Calculation" 1.  Select Return factors" •  Value-related items! •  NPV is often WAG! 2.  Select Investment factors" •  Cost-related items! 3.  Select weights for factors" •  Range: 0—1 ! 4.  Select finite Rating scale for factors" Weight" 1.0! 0.5! 1.0! Weight 1.0 1.0 Return Factor" Net Present Value! Urgency! Regulatory Compliance! Investment Factor Effort to implement Technical Risk Scale Values Fibonacci 0,1,2,3,5,8 NPV=5, Urgency=3, Reg. Compliance = 1, Effort=8, Risk=1! 𝑅𝑂𝐼=​(1×5+0.5×3+1×1)/1×8+1×1 =0.83 Example:"
  22. 22. Copyright 2013, cPrime Inc. ! 22"22 Portfolio Backlog" •  Items in Portfolio Backlog are Business Cases" •  Items are ranked (sequenced) in order of decreasing ROI" •  Analogous to Product Backlog in Scrum! •  Do largest ROI items soonest" •  Schedule for when bandwidth becomes available! •  Minimize parallel Initiatives to maximize productivity!
  23. 23. Copyright 2013, cPrime Inc. ! 23"23 Tracking and Metrics" Burn-Up Chart" •  Per Initiative! •  Per Release! Relationship between Initiatives and Releases is Many-to-Many" R1 R2 R3 I1 I2 I3
  24. 24. Copyright 2013, cPrime Inc. ! 24"24 Decisions about Ongoing Initiatives" 1.  Continue Initiative" •  Assumptions valid, progress on track! 2.  Cut scope" •  Assumptions valid, but won’t hit planned goals! 3.  Add scope" •  Assumptions valid, but ahead of schedule! 4.  Change scope" •  Value can be improved with scope changes! •  Remove as much work as is added!! 5.  Cancel Initiative" •  Changes in needs make planned value not worth pursuing, compared to alternatives!
  25. 25. Copyright 2013, cPrime Inc. ! 25"25 Roles" Area Product Owner •  Works with customers, stakeholders to define & prioritize user-facing features •  Develops Business Cases for Initiatives •  Estimates value factors for Initiatives •  Works with Program Manager, others to get effort estimates •  Runs Portfolio Grooming Meeting Portfolio Owner •  Authority over Initiative selection and prioritization •  Reviews Business Cases •  Sets ranking of Initiatives •  Decides whether to continue, revise, or terminate Initiatives in flight •  Runs Portfolio Planning Meeting Program Manager •  Ensures cross-Team collaboration is done well •  Facilitates effort estimation for Initiatives •  Supplies Teams’ schedule, capacity information needed for Portfolio planning
  26. 26. Copyright 2013, cPrime Inc. ! 26"26 Portfolio Grooming Meeting" •  Purpose: Ensure Business Cases are ready for next Portfolio Planning Meeting! •  Area Product Owner facilitates! •  When: 2—4 hours per month! •  Who: Area Product Owner, Team Product Owners, Program Manager(s), technical leads (Engineering and QA)! Agenda" •  Provide feedback on clarity, quality, completeness of Business Case! •  Identify major components, areas of work! •  Provide rough effort estimates! •  Follow-up actions" •  Area Product Owner revises, completes Business Case!
  27. 27. Copyright 2013, cPrime Inc. ! 27"27 •  Purpose: Rank pending Initiatives, assess in-flight Initiatives! •  Portfolio Owner facilitates! •  When: 2—4 hours per month! •  Who: Portfolio Owner, Area Product Owners, Program Manager" Agenda" For each new Business Case (BC)! 1.  Area Product Owner reads BC to group! 2.  All discuss, ask Area Product Owner to clarify details! 3.  Portfolio Owner may adjust value-related factors (not effort)! 4.  Portfolio Owner adds BC to Portfolio Backlog, ranks via Decision Matrix! 5.  Program Managers advise on timing of Initiatives! •  For in-flight Initiatives! 1.  All discuss status, possible changes! 2.  Portfolio Owner decides to continue, revise, or cancel! Portfolio Planning Meeting"
  28. 28. Copyright 2013, cPrime Inc. ! 28"28 Summary of Recipes" When Participants Decisions & Actions Portfolio Grooming Meeting Area & Team Product Owners, Program Manager, Tech Leads Team Product Owners, Tech Leads, Program Manager give feedback on Business Case. Program Manager & Tech Leads estimate effort. Business Case Completion Area Product Owner Area Product Owner ensures Business Case satisfies Definition of Done prior to Portfolio Planning. Portfolio Planning Meeting Portfolio Owner, Area Product Owners, Program Managers All discuss Business Cases. Portfolio Owner ranks Business Cases via decision matrix, decides what to do with in-flight Initiatives based on status information and business needs.
  29. 29. Copyright 2013, cPrime Inc. ! 29"29 Which Agile Governance
 Principles are Used?" All of them!" " 1.  Standardization of Recipe Elements" 2.  Common Role Types" 3.  Categories of Governance Points" 4.  “Good Enough” is Good Enough" 5.  Granularity" 6.  Definition of Done" 7.  Handoffs" Download “Recipes for Agile Governance: The Enterprise Web” ! from for much more detail!
  30. 30. Copyright 2013, cPrime Inc. ! 30"30 Conclusion" •  Portfolio-level governance is about" •  Deciding which Initiatives to undertake, and in what order! •  Deciding whether to continue, modify, or cancel ongoing Initiatives! •  Portfolio governance can be conducted with" •  Roles: Portfolio Owner, Area Product Owner, Program Manager! •  Ceremonies: Portfolio Grooming, Portfolio Planning Meetings! •  Artifacts: Business Case, Agile Charter! •  Tracking and Metrics: Burn-Up Chart! •  Key insights" •  Evaluate ROI as ratio of weighted sums of value- and effort- related factors! •  Estimate factors with coarse-grained relative scale!
  31. 31. Copyright 2013, cPrime Inc. ! 31"31 Coming Up:
 More Practical Recipes
 for Different Worlds" •  Our follow-up presentations will provide more examples of practical recipes for specific situations:" ü  Program Governance for Application Development! ü  Program Governance for Production Deployment! ü  Project Governance for Distributed Scrum Teams!
  32. 32. Copyright 2013, cPrime Inc. ! 32"32 Question & Answer