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Next	  three	  slides	  enact	  “entering	  the	  bubblesphere.”	  	  You	  start	  with	  the	  opera=onal	  team	  view	...
X	  axis	  shows	  days,	  and	  opera=onal	  teams	  are	  rightly	  focused	  on	  hiLng	  full	  scope	  each	  itera=o...
X	  axis	  s=ll	  shows	  days,	  but	  program	  managers	  are	  rightly	  focused	  on	  how	  the	  overall	  set	  of...
You’re	  in	  the	  bubblesphere!	  	  Y	  axis	  indicates	  probability	  of	  success	  (0-­‐1).	  	  X	  axis	  indica...
9	  
Note	  this	  porHolio	  has	  no	  “low	  risk,	  high	  return	  items,”	  and	  one	  high	  risk,	  high	  return	  it...
FantasTapps	  was	  incorporated	  by	  CEO	  William	  Gallstone	  in	  2010	  with	  a	  low-­‐interest	  loan	  of	  $1...
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Looks	  really	  good!	  	  Upper	  right	  =	  CoffeeFinder,	  their	  anchor	  app.	  	  They	  expect	  2011	  returns	 ...
Looks	  good!	  	  They	  won’t	  quite	  pay	  off	  William’s	  dad,	  but	  this	  looks	  to	  be	  an	  excellent	  ye...
15	  
Although	  CaffeineTester,	  LaqeSwirlDesigner,	  and	  VirtualCreamSnimer	  all	  went	  live	  as	  planned	  in	  Q1,	  ...
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CaffeineTester:	  	  despite	  the	  complete	  lack	  of	  compe=tors	  at	  the	  start	  of	  2010,	  two	  new	  ones	 ...
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CaffeineTester:	  	  Maintenance-­‐only	  leads	  to	  a	  10%	  decrease	  in	  profits.	  	  An	  investment	  strategy	  ...
21	  
PorHolio	  strategies	  to	  correct	  “the	  plan”	  include:	  •  Less	  op=misim	  about	  VirtualCreamSnimer	  •  Fact...
Likely	  findings:	  	  -­‐  Throwing	  money	  at	  a	  process	  problem	  doesn’t	  help	  -­‐  You	  have	  to	  spend	...
Likely	  findings:	  	  -­‐  You	  have	  to	  spend	  money	  to	  make	  money	  -­‐  Changing	  course	  based	  on	  co...
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Enter the Bubblesphere: You and Your Agile Project Portfolio

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Enter the Bubblesphere: You and Your Agile Project Portfolio

  1. 1. 1  
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  5. 5. Next  three  slides  enact  “entering  the  bubblesphere.”    You  start  with  the  opera=onal  team  view  (short  term,  one  project),  broaden  to  the  PMO  view  (annual  and  for  all  projects),  and  then  jump  to  the  porHolio  view  (prospec=ve  and  strategic  over  life  of  project).     5  
  6. 6. X  axis  shows  days,  and  opera=onal  teams  are  rightly  focused  on  hiLng  full  scope  each  itera=on.   6  
  7. 7. X  axis  s=ll  shows  days,  but  program  managers  are  rightly  focused  on  how  the  overall  set  of  projects  are  performing,  and  when  they  will  be  done.   7  
  8. 8. You’re  in  the  bubblesphere!    Y  axis  indicates  probability  of  success  (0-­‐1).    X  axis  indicates  net  present  value  of  each  project.    Size  of  dot  indicates  overall  likely  income  from  project  over  its  life=me.     8  
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  10. 10. Note  this  porHolio  has  no  “low  risk,  high  return  items,”  and  one  high  risk,  high  return  item.    They’re  avoiding  high  risk/low  return  except  for  one  large-­‐ish  project.    I  wouldn’t  want  this  porHolio.    Kill  high  risk,  low  return  projects  in  favor  of  a  combina=on  of  high  and  low  risk  projects  with  some  returns,  preferably  large  ones.    Other  dimensions  you  might  want  to  bubble  chart:    costs,  =me,  return  on  investments  towards  different  balanced  score  card  values,  so  long  as  they  are  quan=ta=ve,  regulatory  compliance,  opera=onal  cost,  etc.    You  can  use  bubble  charts  for  any  combina=on  of  three  dimensions  on  your  porHolio.     10  
  11. 11. FantasTapps  was  incorporated  by  CEO  William  Gallstone  in  2010  with  a  low-­‐interest  loan  of  $1.5M  (from  his  dad).    The  loan  was  based  on  a  promising  mobile  phone  applica=on,  CoffeeRadar,  designed  by  William.    The  app  was  launched  mid-­‐February,  2010,  to  immediate  acclaim,  and  although  the  code  quality  was  quite  low,  and  showed  the  teams  lack  of  experience,  and  maintenance  costs  on  CoffeeRadar  were  high,  it  s=ll  showed  a  good  return  on  investment  by  the  end  of  2010,  with  net  profits  of  $390,000  for  the  year.    Based  on  the  success  of  this  app,  which  was  supported  on  Android,  Apple,  and  Blackberry  plaHorms,  Gallstones  team  used  most  of  the  remaining  loan  to  develop  three  addi=onal  applica=ons  in  the  second  half  of  2010,  and  launched  them  during  the  winter  holiday  season,  because  what  says  "Happy  Holidays"  like  a  new  coffee-­‐related  phone  app?    The  FantasTapps  team  addi=onally  designed  a  fimh  applica=on  which  was  unlike  anything  they  had  developed  before,  being  tea-­‐oriented,  with  the  plan  to  launch  some=me  in  2011.    Based  on  the  returns  of  CoffeeRadar,  FantasTapps  expects  to  get  a  3  for  1  return  on  investment  once  TeaRadar  launches.     11  
  12. 12. 12  
  13. 13. Looks  really  good!    Upper  right  =  CoffeeFinder,  their  anchor  app.    They  expect  2011  returns  to  be  on  par  with  2010.    Meanwhile,  they  hope  great  things  for  TeaFinder,  lower  right.    And  to  keep  things  moving  along,  they  have  avoided  high  risk,  low  return  projects  in  favor  of  low  risk,  low  return  projects  for  now,  that  s=ll  look  to  be  genera=ng  income  for  years  to  come.   13  
  14. 14. Looks  good!    They  won’t  quite  pay  off  William’s  dad,  but  this  looks  to  be  an  excellent  year-­‐on-­‐year  return.   14  
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  16. 16. Although  CaffeineTester,  LaqeSwirlDesigner,  and  VirtualCreamSnimer  all  went  live  as  planned  in  Q1,  sales  on  VirtualCreamSnimer  have  been  unexpectedly  low.    Boris  assures  William  that  things  are  about  to  get  beqer.    Meanwhile,  CoffeeRadar  2.0  did  not  go  live  in  Q1  as  planned  because  the  development  group,  frustrated  with  low  quality,  has  decided  to  adhere  to  CMM  level  5  standards,  and  although  product  management  has  signed  off  on  2.0  as  ready  to  ship,  IT  won’t  do  it  un=l  all  documenta=on  is  brought  up  to  spec.    Although  the  virtual  stand-­‐s=ll  in  new  feature  development  led  to  lower  than  expected  maintenance  costs  in  Q2,  sales  on  CoffeeRadar  have  been  dropping  as  compe=tors  come  out  with  their  own  applica=ons  for  finding  coffee  in  the  wild.    The  TeaRadar  team  is  ready  to  ship  a  free  version  of  their  app  in  Q3,  but  they  require  another  $200K  investment  to  get  the  paid  version  of  the  app  into  the  various  app  stores  by  the  end  of  the  year.    Based  on  what  he  sees  now,  William’s  dad  feels  that  William  going  to  lose  money  this  year,  and  go  down  to  only  $22K  in  cash  reserves.    All  the  same,  he  strongly  feels  William  and  the  board  should  s=ck  to  the  original  budget,  and  just  make  the  teams  work  harder  in  H2,  to  cover  the  shorHall.         16  
  17. 17. 17  
  18. 18. CaffeineTester:    despite  the  complete  lack  of  compe=tors  at  the  start  of  2010,  two  new  ones  sprang  up  in  Q32011.    A  maintenance  only  strategy  causes  the  demand  to  drop  to  0.    An  investment  strategy  extends  the  product’s  lead  and  causes  a  5-­‐fold  return  on  investment.    LaqeSwirlDesigner:    OMG,  they  opened  the  China  market.    Maintain-­‐only  =  Q2  -­‐  $20K  +  $1M.    Investment  brings  5-­‐fold  return  on  investment  over  and  above  this  amount.    VirtualCreamSnimer:    Boris  went  completely  off  the  rails  charging  things  to  the  company  credit  card.    The  applica=on  tanked,  and  your  resource  costs,  adver=sing,  and  travel  budget  is  sinking  any  profits  you  had  made.  You  have  been  completely  taken  over  by  compe=tors  and  the  your  lead  developer  has  lem  the  company.    Income  is  zero,  plus  subtract  whatever  you  invested,  and  another  $200K  to  cover  Boris’s  crazy  expenses.    CoffeeRadar:    you  can’t  solve  this  problem  just  by  throwing  money  at  it.  Maintain:  Q2  Revenue  -­‐  40%  =  $60,000.  Also  subtract  $170,000.00  as  you  had  to  bring  on  contractors  to  just  maintain  the  product  as  your  internal  employees  are  now  working  on  the  update  =  -­‐110K    Invest  -­‐  Take  what  you  invested  and  mul=ply  by  3,  then  subtract  from  -­‐110K,  because  throwing  money  at  the  problem  only  made  it  worse.    IT  hired  a  slew  of  tech  writers  who  all  had  to  be  brought  up  to  speed,  addi=onal     18  
  19. 19. 19  
  20. 20. CaffeineTester:    Maintenance-­‐only  leads  to  a  10%  decrease  in  profits.    An  investment  strategy  extends  the  product’s  lead  and  causes  a  2-­‐fold  return  on  investment.    LaqeSwirlDesigner:    Maintain-­‐only  =  Q3  –  20%.    Investment  brings  2-­‐fold  return  on  investment  over  and  above  Q3  returns.    VirtualCreamSnimer:    Not  even  an  op=on.    Dead  as  a  duck.    CoffeeRadar:    you  s=ll  can’t  solve  this  problem  just  by  throwing  money  at  it.  Maintain:  Q3  Revenue  -­‐  40%  =  $36,000.  Also  subtract  $170,000.00  as  you  had  to  bring  on  contractors  to  just  maintain  the  product  as  your  internal  employees  are  now  working  on  the  update  =  -­‐134K    Invest  -­‐  Take  what  you  invested  and  mul=ply  by  3,  then  subtract  from  -­‐134K,  because  throwing  money  at  the  problem  only  made  it  worse.    IT  hired  a  slew  of  tech  writers  who  all  had  to  be  brought  up  to  speed,  addi=onal  hardware  was  purchased,  etc.    TeaRadar.    If  you  invested,  you  get  $1.5M.    It  totally  took  off,  especially  now  that  you  have  a  foothold  in  China.    If  you  didn’t,  you  don’t  get  anything.     20  
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  22. 22. PorHolio  strategies  to  correct  “the  plan”  include:  •  Less  op=misim  about  VirtualCreamSnimer  •  Factor  in  poten=al  China  market  for  LaqeSwirlDesigner  •  Update  compe==ve  informa=on  about  CaffeineDetector    PorHolio  strategies  to  beat  “the  plan”  include:    To  really  win,  though,  you  need  a  new  governance  model  for  the  plaHorm  app  which  allows  for  quicker  go-­‐live.  •  Invest  in  CoffeeSwirlDesigner  and/or  LaqeSwirlDesigner  •  Kill  VirtualCreamSnimer   22  
  23. 23. Likely  findings:    -­‐  Throwing  money  at  a  process  problem  doesn’t  help  -­‐  You  have  to  spend  money  to  make  money  -­‐  Changing  course  based  on  coalface  knowledge  leads  to  a  beqer  overall  result,  if   the  team  is  sensible.   23  
  24. 24. Likely  findings:    -­‐  You  have  to  spend  money  to  make  money  -­‐  Changing  course  based  on  coalface  knowledge  leads  to  a  beqer  overall  result,  if   the  team  is  sensible.   24  

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