Agile Portfolio Management


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How to bring options thinking into portfolio management

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Agile Portfolio Management

  1. 1. AGILE PORTFOLIO MANAGEMENT! Maarit Laanti 10 Oct 2013!
  2. 2. Storyline! 1.  The problem! 1.  How agile helps! 2.  Agile requirements hierarchy! 2.  Agile portfolio management! 1.  Adaptive finance & control! 2.  Agile in large scale: ! Scaled Agile Framework Big Picture! ! !
  3. 3. •  Crowdsourcing!•  Prioritize! •  No wasted effort! •  Automation! •  Continuous Integration, Continuous delivery! How to get a positive spin to your business?! Deliver highest value Listen Customers Release automation!
  4. 4. A typical situation in traditional settings! Project 1! Project 2! Project 3! Project 4! People! Project! Allocation! Joe! 1! 0.1! 2! 0.4! 3! 0.3! 4! 0.2! Image © Graphics!
  5. 5. It does not help if we set a scrum team but do not “lean up” how projects are run! People! Project! Allocation! team! 1! 0.1! 2! 0.4! 3! 0.3! 4! 0.2! Project 1! Project 2! Project 3! Project 4! Product owner! Backlog! Images © Graphics!
  6. 6. Work harder message?!                    Hurry  up   Hurry  up   Hurry  up   Hurry  up   Hurry  up   Hurry  up   Read  More:  Hugos:  Business  Agility  
  7. 7. Sequential vs. parallel! Waterfall = Phases follow one each other. All features in same phase all the time. ! Specification! Design! Implementation! Testing! F1! F2! F3! F4! F1! F2! F3! F4! Specification! Design! Implementation! Testing! SHIP   SHIP!SHIP! SHIP! SHIP! Agile = ! All phases done in parallel. ! One feature at a time.!
  8. 8. Sequential is faster than parallel!! A   A   B   B   A’     B’   B’   Average  8me  to   make  A  is  T   T   Since  B  is  started  a>er  A,  average  8me   to  make  B  is  also  T   T*2   As  A  and  B  are  made    parallel,  average  8me  to  make  a  is  T*2  +  30%  (A’)   because  A  gets  worked  only  on  50%  of  8me  and  extra  30%  is  needed  for   context  switching.  Average  8me  to  make  B  is  also  T*2  +  30%.     Read  more:  Reinertsen,  The  Principles  of  Product  Development  Flow  
  9. 9. Problems of traditional portfolio management! Gather all the requirements! ! ! ! ! End up with ! not-so-usable ! code! ! •  Requirements pile up in storage and get outdated before implemented! •  Guidance on agreed intervals (milestones); not on-time and continuous! •  Limited visibility on what is under development (visibility only on milestones)!
  10. 10. Agile portfolio management! Portfolio management is responsible for making investments with best possible returns. ! •  Uncertainty can be included in the process, we do not need to wait until all the details have been sorted out! •  Proceeding with smaller steps, building adaptability into the decision making and follow-up! Portfolio management is a steering wheel! •  We enable better steering and guidance with fast feedback cycles! •  Self-correcting and learning system: learn from the feedback!
  11. 11. Vision for Agile Portfolio Management! Field  studies   Rela,ve  target  se0ng   (compe,tor  comparison)   Fast  customer   feedback   Crowdsourcing  /   ideas   Por%olio   management   Implementa0on   Fast     feedback   Gradual   specifica,ons   Priori,es  and  goals   Transparency   Quick  releasing   Taming uncertainty with:! •  Adaptive decision making! •  Gradual commitments! •  Fast feedback!
  12. 12. Epics, Features and Stories get Done in Increments or Trains and in Sprints! Story   Epic   Sprint  Task   Feature  /  Sub-­‐Feature   Sub-­‐Epic   Product / service Train Sprint
  13. 13. Lean flow in software development!! Epics Features Stories Tasks •  Refuse to specify in detail until the right time; use higher abstraction while talking long-term! •  How many requirements get out-dated before the work is started! •  Fast enough do not need a Change Request process! •  If you are fast enough, there is no need for “fast track” of error corrections either!
  14. 14. Feedback loops! 1.  From development reflected against capability 2.  From competitors, what is expected by market 3.  From existing services; what sells well 4.  From customers; where we have needs 5.  From process; how can we improve based on he feedback collected -  Service = backlogs & rapid feedback -  Process = Tools, way of working, cadence (rhythm) -  People = resource fluidity, organizational structure adapts -  Feedback in real-time (gathering data), in hours (demonstrations), feedback in weeks -  Prototype and test new ideas before à approval from audience, rather than management (who is not the user)
  15. 15. Agility with the Portfolio Management means..! ...An iterative & incremental way of ! 1.  Defining the content (elaboration of content on-need basis)! 2.  Having dynamic view on what is under development (metrics, visibility)! 3.  Having actively working network steering the content decisions (decision making; also scoping content)! 4.  Actively balancing the capacity based on progress information and priorities! 5.  Having short-looped feedback on all level immediately showing the impact of decisions made! and as support to that! •  Having investment decisions framed, followed-up and fine-tuned in align of agile portfolio management!
  16. 16. Portfolio Backlog: Priorities based on business value for portfolio level decision making! •  Order of items in Portfolio backlog is according to business value based on management judgment •  Backlog is frequently reviewed and updated with new/changed items –  Portfolio backlog priorities should impact directly on project execution: priorities, capacity used –  There should be real status of projects available via dashboards all the time –  Projects should not start work that is outside portfolio backlog (except Features identified by projects themselves in order to complete the project) •  Iterative and cyclic review process provides lessons learnt from programs progress and throughput since last prioritization round to support better portfolio management
  17. 17. If R&D is changing, should the rest of the organization change?! CEO   Marke8ng   Finance   HR                       R&D   •  Is there friction between R&D and the rest of the organizations?! •  What new could other organizations learn?! •  Is agile teaches how to approach the UNCERTAINTY - Isn’t the changing world present also elsewhere than in software development?!
  18. 18. Typical Portfolio Pattern! •  Growth of 15 – 30% (or more) is high and single-digit growth is low, the 10-15 % range being kind of a ”tweeter” zone! •  A category is material to your business if it should generate 5-10 percent of either your total revenue or your total profit or should be expected shortly! High-­‐Growth  Categories   Low-­‐Growth  Categories   Material  to   Current   Financials   Not  Material   1   4   2   3   Growth   Emerging   Declining   Mature   •  There  is  no  real  compe88on  between   Mature  and  Emerging  businesses:     Emerging  ini8a8ves  are  doomed  from  birth.   Mature  business  is  driven  by  fact-­‐based   management  teams  and  needy  market   requirements  in  Emerging  business  get  li^le   understanding    –  a  primary  symptom  of   enterprises  experiencing  Christensen’s   innovator’s  dilemma.   Read  more:  Moore,  Escape  Velocity  
  19. 19. Can agile planning be adapted to finance and control?! •  Most of the development costs come from headcounts! –  Where do we need matrix organization cost center structure?! •  Backlogs already contain the information who did & what! –  Separation of tracking and forecasting !
  20. 20. BIG CHANGE:
 From organization-based budgeting to project-based F&C!! Targets  per  project   -­‐  Transparency:  reflect  where  the   actual  money  is  spent     -­‐  Shows  where  we  are  inves8ng   RBP  per  organiza8on   -­‐  ”Flat  structure”  in  the  sense  that   resource  need  is  the  same  or   increasing   -­‐  Not  visible  where  the  money  is   spent  to   Q1   2011   Q2   2011   Q3   2011   Q4   2011   Q1   2012   Q1   2011   Q2   2011   Q3   2011   Q4   2011   Q1   2012   Saving  costs  from  all  cost  centers   creates  unknown  bo^lenecks   Balance  investment  op8ons  
  21. 21. Vision for Adaptive Organization! Field  studies   Metrics   Market  info   Crowdsourcing   Release  trials   Adap,ve  loop   Teams   Projects   Por-olio   Rela,ve  metrics  CDF  Adap,ve  planning   Goals  /  rela,ve  target  se0ng   Balancing  investment   Progress  velocity  cycle  ,me   Reward  /     investment   How  to  do/   What  to  do   Double-­‐loop  learning   Con,nuous   improvement   Streaming  problem   solving  
  22. 22.     Tel.  +358  40  5308056   Thank you for your interest  
  23. 23. Standing on shoulders of the giants:! •  Reinertsen: The Principles of Product Development Flow: Second Generation Lean Product Development! •  Leffingwell: Agile Software Requirements: Lean Requirements Practices for Teams, Programs, and the Enterprise (Agile Software Development Series)! •  Moore: Escape Velocity: Free Your Company’s Future from the Pull of the Past! •  Bognes: Implementing Beyond Budgeting: Unlocking the Performance Potential! •  Hugos: Business Agility: Sustainable Prosperity in a Relentlessly Competitive World!