This post looks in depth at the piece parts of agile portfolio management. After defining agile portfolio management, it delves into some of the specific agile principles at work. Then it identifies the key portfolio management activities and how they play a role. Then it looks at the role of strategy in agile portfolio management. Finally, it brings these all together again as its own activity agile portfolio management.
What is Agile Portfolio Management?
Agile Portfolio Management is a form of portfolio management because it involves the centralized management of one or more portfolios, which includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work, to achieve specific business objectives.
In the context of Agile Portfolio Management, this process is not a one-time event, but a continuous activity. The portfolio is constantly reviewed and adjusted based on the changing business needs and market conditions. This includes prioritizing work based on its value, reallocating resources as needed, and making decisions about whether to start, stop, or continue specific projects or programs.
Thus, Agile Portfolio Management combines the principles of agile methodologies with the practices of portfolio management to deliver the highest value to the organization.
What Is the Agile in Agile Portfolio Management?
Agile Portfolio Management utilizes several key Agile principles, including embracing change, delivering value frequently, involving the customer throughout the development process, and encouraging simplicity. It also emphasizes sustainable development and maintains a constant pace of work. Furthermore, it promotes face-to-face interactions and collaborative decision-making, and regularly reflection on how to become more effective.
Here is some further detail on how these key agile principles are used in portfolio management:
- Embracing change – The understanding that requirements may change throughout the course of a project. Instead of resisting these changes, Agile methodologies encourage teams to adapt to changes and use them as opportunities for improvement. This flexibility allows teams to adjust their plans and deliver the most valuable product or service possible to the customer.
- Delivering value frequently – The concept of producing tangible, valuable results on a regular basis throughout the project. This is most often accomplished through iterative development, where work is broken down into small, manageable pieces, or “sprints”, that each result in a usable product increment. Regular delivery of value assures that even if circumstances change partway through the project, the work completed so far has already provided benefit to the customer. It also allows for regular feedback and course-correction, further ensuring that the final product will meet the needs and expectations of the customer.
- Involving the customer throughout the development process – Keeping the customer actively involved at all stages of the project. In Agile methodologies, customer feedback is highly valued and sought after, often through regular reviews and discussions. This ongoing interaction helps to ensure that the evolving product or service continues to meet the customer’s needs and expectations, and allows for adjustments to be made in response to any changes in the customer’s requirements or market conditions. This principle highlights the importance of a collaborative relationship between the development team and the customer, with the goal of delivering the highest value possible.
- Encouraging simplicity – Emphasizes the importance of focusing on what’s necessary to achieve the project’s goals and deliver value, while avoiding unnecessary complexity. This can involve removing non-essential features, streamlining processes, or breaking down tasks into smaller, manageable parts. It encourages teams to find the simplest way to do their work, which can lead to increased efficiency and productivity.
- Face-to-face interactions – Places a high value on communication that is direct and personal. This principle emphasizes that the most efficient and effective method of conveying information to and within a development team is through face-to-face conversation. It encourages team members to physically (or virtually, if necessary) sit together and discuss work in real time. This allows for immediate feedback, rapid resolution of misunderstandings or conflicts, and a more collaborative environment. It is believed that these face-to-face interactions contribute to a stronger team dynamic, better problem solving, and more innovative thinking.
- Collaborative decision-making – Employed in various aspects, from prioritizing work items in the backlog, allocating resources, to determining the direction of the project. This collaborative process often takes place in routine meetings or “huddles”. During these sessions, team members discuss the project’s progress, share insights, and make strategic decisions. Various Agile tools and techniques, like Kanban boards, Scrum meetings, and backlog grooming sessions, facilitate these discussions.
- Reflection on how to become more effective – Reflection is done in retrospectives, or regular meetings where the team reflects on the past work period, typically a sprint or an iteration. The purpose of these meetings is to identify what went well, what didn’t go as planned, and what can be improved for the next cycle. This regular reflection is in line with the Agile principle of continuous improvement. The team discusses their processes, tools, relationships, and overall performance, and makes suggestions for improvements. These insights are then used to plan action steps for the next work period, ensuring that the team continuously learns and improves.
What Are the Key Elements of Portfolio Management?
The key elements of portfolio management include identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work to achieve specific business objectives.
Here’s some more detail on each of these elements:
- Identifying – Determining and listing potential projects or programs that could help achieve business objectives. It requires understanding the organization’s strategic goals and identifying initiatives that align with these goals.
- Prioritizing – Once potential projects or programs are identified, they need to be prioritized based on their expected value, risk, cost, and alignment with strategic goals. This process ensures that resources are allocated to the most valuable and strategically-aligned initiatives.
- Authorizing – Selected projects or programs need to be formally approved and authorized. This typically involves securing the necessary resources and assigning a project manager or team to carry out the work.
- Managing – Overseeing the execution of the authorized projects or programs, ensuring they stay on track in terms of timeline, budget, and scope. Regular monitoring and reporting are crucial in this stage to keep stakeholders informed and to enable timely decision-making.
- Controlling – The process of monitoring the progress of projects or programs, identifying any deviations from the plan, and making necessary corrections. This ensures that projects stay aligned with the business objectives and that risks are effectively managed.
Keep in mind that agile portfolio management involves centralized management of one or more portfolios and is a continuous activity. The portfolio is constantly reviewed and adjusted based on changing business needs and market conditions.
Where Does Strategy Intersect With Agile Portfolio Management?
Strategy intersects with Agile Portfolio Management at multiple points. Firstly, it is involved in the identifying stage, where potential projects or programs are determined based on the organization’s strategic goals. Secondly, strategy plays a crucial role in prioritizing projects or programs. Projects are ranked based on their expected value, risk, cost, and most importantly, alignment with strategic objectives. Furthermore, during the managing and controlling stages, strategy helps guide decision-making to ensure the projects stay aligned with business objectives.
Strategy must take on an agile approach. It can do this by adopting various agile principles, including embracing change, delivering value frequently, involving the customer throughout the development process, encouraging simplicity, emphasizing sustainable development, maintaining a constant pace of work, promoting face-to-face interactions and collaborative decision-making, and regularly reflecting through formal retrospectives.
Assuming it adopts this agile approach, strategy is intrinsically linked with Agile Portfolio Management, guiding it at every step.
Conclusion
This post has looked in depth at agile portfolio management and its parts. After defining agile portfolio management, it delves into some of the specific agile principles at work. Then it identifies the key portfolio management activities and how they play a role. Then it looked at the role of strategy in agile portfolio management. Finally, it brought these all together again with a deeper understanding of agile portfolio management.