agile portfolio management
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How to bring options thinking into portfolio managementTRANSCRIPT
AGILE PORTFOLIO MANAGEMENT!Maarit Laanti 10 Oct 2013!
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!!
!
• 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!
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 Factory.com!
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 Factory.com!
Work harder message?!
Hurry up
Hurry up
Hurry up
Hurry up
Hurry up Hurry up
Read More: Hugos: Business Agility
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.!
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
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• Requirements pile up in storage and get outdated before implemented!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)!
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!
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!
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
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!
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)
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!
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
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?!
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
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 !
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
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
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!