“To improve is to change; to be perfect is to change often.”
In business, it’s always time to change as customers’ expectations are changing rapidly. This has made businesses heavily invest in agile and digital transformation. But some businesses did not achieve the desired results as they were not able to realize the complete value of digital and agile transformation. To realize the complete value of these two it is necessary to have the proper alignment between technology teams and businesses and also should remain aligned. In this case, traditional ways of portfolio management are often found ineffective so many adapt to lean portfolio management.
Lean portfolio management inline strategy and execution by using a system thinking approach to strategy and investment funding, governance, and portfolio operations. It is one of the seven competencies of business agility. From the collected value stream of the SAFe portfolio, each stream provides one or more solutions to meet the business strategy of an organization.
Why use Lean Portfolio Management?
If compared to the traditional method of portfolio management lean portfolio management provides three important dimensions that affect the global economy or impact on digital disruption and also provide benefits like:
Strategic and investment funding ensures the complete portfolio is aligned and funded to meet business targets.
Agile portfolio operation coordinates and supports foster operational excellence and decentralized program execution.
Lean governance has oversight and decision-making of measurement, spending, forecast expenses, audit, and compliance.
Let’s understand this three-dimension of lean portfolio management in details.
1. Strategic and Investment Funding
Strategic and Investment Funding consists of responsibilities as mentioned below
Connect portfolio to enterprise strategy- Connecting portfolio with enterprise strategy to achieve broader business objectives is the main responsibility of strategic and investment funding. It connects business strategy by strategic theme and portfolio budget. It also gives back enterprises the feedback by portfolio context.
Maintain portfolio vision-To maintain portfolio vision below points should be taken care of: Portfolio vision- it describes the future state of portfolio streams and solutions describing further steps to achieve the objectives and aim of the enterprise. Enterprise architect- It helps in translating business strategy and vision into technical plans. Portfolio roadmap- A flexible and purposeful roadmap provides stakeholders with the future state of portfolios
Realize portfolio vision through epics-Epics delivers business value so it is necessary to implement epics to achieve the future state. While implementing epics it is necessary to maintain a high-level view of when potential fresh value can be delivered by understanding the epic costs.
Establish a lean budget and guardrails-Lean budget gives funding for the value stream along with business strategies and strategic themes. Guardrail provides governance and spending policies and practices and supports budgets. As this funding allows eliminating traditional project funding so it is necessary to establish it well.
Establish portfolio flow- It defines the process of managing portfolio epics by their life cycle.
2. Agile Portfolio Operations
Agile portfolio operations responsibilities are
Coordinate value stream-Even though the value stream works independently but it is always beneficial and provides capabilities ahead of competitors if a set of solutions are coordinated. It addresses a solution to manage dependencies to obtain opportunities.
Support program execution-It helps in executing the program pattern in the portfolio successfully working along with APMO. It provides a platform to share effective program execution practices and other required knowledge.
Foster operational excellence-LPM also plays a crucial role in achieving excellence, and help an organization in reaching their goals.
3. Lean Governance
Forecast and budget dynamically-It helps in planning and budgeting by understanding historic and future costs with solutions and epics. The budget is adjusted every half-yearly.
Measure portfolio performance-It needed to ensure the basics as strategy implementation, spending align with agreed boundaries, and continuously improved results, oversight of feature implementation without excessively detailed.
Coordinate continuous compliance-Combined audit and compliance gives continuous obedience with reducing overhead and supporting the ongoing flow of value.
Lean Portfolio Management Events
1. Strategic portfolio review-It helps in achieving and advancing the portfolio vision and occurs quarterly mostly before a month of PI.
2. Portfolio sync- It provides a clear vision of the progress of the portfolio for reaching its objectives. It is based on more operational focus and involves reviewing epic implementation, the status of KPIs, report dependency, and removing impediments. It occurs on monthly basis.
3. Participatory budgeting- It defines the allocation of portfolio budget between solution and epic in LPM events by a group of stakeholders. This budget is adjusted twice a year.
“Update and upgrade in the right direction at right time can do the wonders”.
To successfully define and execute the strategy requires portfolio management with agile-lean thinking. Three dimensions of lean portfolio management ensure the right work happened at right time, necessary adjustments are made to meet business targets, alignment is properly adopted between strategy and execution, and ensures loop is closed with proper measurement of performance and adjustment is according to maximizing budget value respectively.
About Advance Agility
We, at Advance Agility, are the new-age Agile Coaching, Consulting and IT services company. We enable end-to-end Digital Transformation. Agile execution is integral to our being. We are doing SAFe implementation with small, medium and large organization across the globe. Our vision is to be the leading Agile execution player globally. To keep adding value at every process stage. We are on a mission to empower our clients, move from concept to cash in the shortest sustainable lead time by adopting human centric approach to business agility. Embracing the change is in our DNA. Things that keep us apart are Quicker and Seamless execution with End-to-end gamut of services. Our Global presence and Stellar Track Record give us an edge over our competitor.
Connect with us at advanceagility.com to learn about SAFe and SAFe Implementation. Write to us at contact@advanceagilty.com for any agile training or consulting needs. We are always looking for competent agile trainers as well. So if you are a good trainer or want to become one, do get in touch with us to that we can learn, grow and achieve together
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