Where is your organization on the continuum of traditional to agile portfolio management practices? If most of your projects are still waterfall in nature, you’re likely following more traditional processes for portfolio management.
Maybe your Project Management Office (PMO) is operating with a hybrid approach, supporting agile projects along with the more prevalent waterfall project methodologies. Or perhaps your organization has adopted agile ways of working both across and up the chain of command, so agile portfolio management is the norm.
The PMO Leader for Planview Enterprise One
Register now to take a look at the PMO LEADER experience – and the solutions you have within Planview Enterprise One.Watch the product demo: The PMO Leader for Planview Enterprise One
Most likely, your business falls somewhere in the middle, where the PMO supports the practices and tools that are best suited to delivering the desired results on a case-by-case basis.
When there are no set standards in place for project and portfolio management, the PMO is in a unique position to shape an agile practice that will make the organization more responsive to change. As a first step, you can explore what “going agile” means for your organization and help create clarity around why adopting agile portfolio management practices is desirable. The question becomes, what will it take to fully realize the benefits?
Going agile is not a one-time event. It’s a journey toward more agile project, program and portfolio management across the enterprise. Where you end up will depend on your strategic goals and the organization’s commitment to agile transformation. Success will be defined by a customer-centric, product-driven approach that delivers value faster.
Defining Agile Portfolio Management
If you Google agile portfolio management, you will receive more than 35 million results. To say there are a lot of ideas about what agile portfolio management means would be an understatement. One popular definition from boutique management consultant Evolution4All rings true:
“Agile portfolio management deals with how an organization identifies, prioritizes, organizes and manages different products. This is done in a streamlined way in order to optimize the development of value in a manner that’s sustainable in the long run…Agile portfolio management ensures that a company provides their clients with the best value for their investment. A good portfolio manager understands and follows the agile principles while also considering the various factors needed to successfully manage numerous teams and projects.”
In its simplest form, agile portfolio management is about enabling a business to respond more quickly to rapidly changing market conditions. Being agile essentially means you are continuously delivering value – whether for a product, project or program. On an enterprise-wide scale, agile ways of working enable organizations to anticipate and adapt to change in near real-time.
Realistically, not every organization is able to go full agile all at once, but agility can be introduced as part of the organizational journey.
In this transformative process, organizations adapt at their own pace, often beginning with static annual planning exercises and eventually ending up with a dynamic continuous planning process, for example. Linear development methods are replaced by iterative processes, and top-down control of work and resources gives way to self-organizing autonomous teams that are focused on value delivery.
A Kernel of Truth
Where your organization falls on this agility continuum may dictate how you kick off your journey to the next phase of development. Don’t be surprised if there’s resistance to a transition to agile practices.
Some managers think being agile means giving up control of project portfolio management (PPM). This common misperception is based on past experience: To analyze the potential return on investing in a project, the PMO has a highly structured process for centralizing, consolidating and analyzing relevant data. Projects are given the green light, resources are allocated, and assigned teams deliver on a fixed timetable.
PPM demands a rigor that could be construed as the opposite of agile. In fact, agile PPM uses that same real-time data to prioritize work according to business value delivered. Agile teams form around high-value products and deliver in increments customers can use. Agile PPM arrives at similar goals as traditional PPM, but by way of a more iterative, incremental route.
To be successful, an agile PMO needs to understand what agile means to the organization as a whole, and what its role should be in implementing agile practices. Agile portfolio management is not the wild west of management theory. It takes strategic thinking, tight alignment of strategy and investments, and just enough governance to guarantee transparency, visibility and responsive results. You can start to realize your ultimate vision for agile portfolio management by adopting a few of the following best practices.
Agile Portfolio Management Best Practices
In an agile enterprise, the strategic plan and roadmap are living documents that you update at least monthly, quarterly at most, and extend as long as makes sense – often from 12 to 18 months. Instead of thinking about strategic planning as an annual exercise, think of it as a continuous process.
Keep tabs on whether things are going according to plan and if not, what needs to change. Find out if the changes you’ve made so far have been effective, and if not, why not. This type of ongoing dialog creates give-and-take among stakeholders and project teams. Agile planning shifts the point of view from long-term funding and deliverables to short-term incremental investments that can be adjusted quickly.
Aligning products and programs with strategic objectives becomes a continuous process in agile portfolio management. Only those projects that are tightly aligned with strategic objectives get funded and sourced. Once the business value is identified and goals are set, agile teams can figure out how to make those goals happen.
Things can quickly fall out of alignment if strategic objectives shift and the projects course is not adjusted. Constantly revisit what is important and what is no longer important. Priorities change. The hundreds of possible projects that were debated in the past may no longer be relevant within an agile framework.
Planning a set of related work in a coordinated way yields benefits not otherwise achievable. In the process, you translate strategic objectives into business value and outcomes.
Deloitte notes that although the process does not need to be modified before you apply agile practices, the metrics for measuring progress will be different – burndown rates vs. milestones, acceptance rates vs. change requests or velocity vs. actual hours. Another distinguishing characteristic is fast feedback, which validates the program direction before too much is invested.
When a portfolio of work is under consideration for funding, each project, product release or initiative is prioritized according to alignment with business strategy and customer value. Matching capacity to demand and optimizing resources – teams and shared specialists – becomes easier when there are clear business drivers. The portfolio’s contribution to business value can be reevaluated at any time, and its component work can be reprioritized as appropriate.
Agile portfolio management leverages the power of iterative funding tied to iterative releases. In this way the customer feedback loop constantly shapes the work in progress to maximize value delivered with each release.
On the flip side, you have to manage stakeholder expectations, so that each iteration satisfies a real need. Gone are the days of the promised release after a year or more of work – one big bang for the buck that too often sputtered out in a sea of disappointment.
Just Enough Governance
Compared to the control that may have been exerted in the past, agile portfolio management loosens the reigns on project teams. Agile governance is “just enough” to achieve value-based delivery while providing the flexibility to try new things and learn from both successes and failures. It is a new mindset that does not come easily.
No Matter How You Work
The PMO provides project management support for every type of project delivery approach, from traditional waterfall methods to agile practices and everything in between. With progress toward a more agile enterprise, more project teams will begin to choose agile team delivery. It’s the PMO’s responsibility to keep an eye on the endgame from a portfolio perspective. Be sure you understand what the teams are working on, confirm that they have the right priorities, and help to coordinate their efforts.
The PMO is in a position to champion the transition to agile among project / program / portfolio managers and their teams; as agile practices spread throughout the organization, stay attuned to best practices and incorporate them into coaching and training.
Best practices in agile portfolio management would address the people, processes and tools involved. Key among these best practices is communication across organizational silos, so there is transparency between projects and portfolios.
Using the right tools, you can leverage reporting and analytics to gauge progress, measure performance and evaluate outcomes with accuracy. The dashboards may look different for agile teams compared to what project teams traditionally used in the past. Spreadsheets and office productivity tools can be replaced by purpose-built applications that centralize data and automatically generate metrics for better visibility among all stakeholders.
Goals of Agile Portfolio Management
The Project Management Institute (PMI) reports that enterprise agile project, program and portfolio management achieves several goals, including:
- predictable delivery capacity
- rapid risk reduction
- fast feedback
- ease in changing direction
PMI also warns that team-level agility may not be enough to achieve end-to-end business agility.
On the journey toward agile portfolio management, benefits will accumulate as more of the enterprise becomes agile. A forerunner will be more frequent, predictable releases that deliver value to the customer. The accelerated development pace of your agile teams will result in faster responses to customer needs, with outcomes driven by value delivery. The goal of project completion will be superseded by the goal of meeting market demand.
The path to more agile ways of working can be fraught with hazards, as changing ways of working ripple through the organization. It can cause confusion for the PMO when there are too many different approaches being applied, from waterfall to scrum and Kanban. It’s the portfolio manager’s role to adapt to the changing needs of the business and support new ways of working as well as more traditional work modes.
With agile teams working on smaller, more targeted releases at a faster pace, the risk associated with product delivery diminishes. Iterative feedback loops ensure that the product is what customers want, and their change requests and feature wish lists are being incorporated in the backlog. Risk is also minimized as decisions to continue, change direction or kill a product are made continuously rather than periodically – when it’s too late and too many resources have been expended.
Iterative work that incorporates feedback makes room for innovation where none occurred in the past. Agile portfolio management allows for new ideas and rapid change that produce customer-centric products. With the right amount of visibility, oversight and reporting, you can drive more value from your portfolio.
Journey’s Destination: Achieving Maximum Value
Agile portfolio management calls for an agile mindset. Stay in tune with what your organization needs as you revisit and evolve your definition of an agile portfolio. Become a change champion with a laser-like bead on value.
The more agile your organization, the faster you will move away from the command-and-control stance to a servant leader role. Be willing to constantly reprioritize. The best way to drive value from your portfolio is to be both flexible and predictable in product delivery.
If you are a bit confused and uncomfortable in the skin of an agile leader, take heart in the fact that you are not alone. During this journey there are many resources for information and advice. Look to your business partners to form alliances around agile practices, particularly vendors who have already made strides toward achieving maximum value in the portfolio.