Towards Agile Product and Portfolio Management

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The software industry is going through radical changes. From new developmenttechnologies to changing delivery paradigms, the field has shown tremendousimprovements to aid developers in achieving their goals and dynamically facilitating ever increasing requirements from a demanding market. Agile methods,such as Scrum, XP, and DSDM, have been introduced with the developer at thefocal point, leaving behind those who manage the endless supply of requirements from the market.The managers in charge of products are still holding on to ancient product management techniques, supplied by experts in the field of physical product management. These product management techniques do not sufficiently supportsoftware products, due to the extensive differences between physical and software products. Some examples of these differences are the fact that software ismalleable, variable, can be released in rapid successive versions, and can beduplicated at no costs. Furthermore, there exists only a small range of physicalproducts with such specific applications and such a wide range of stakeholdersin its development and use as software products.Software product managers are in need for supportive, modern, dynamic, adjustable, and transparent management methods and tools that are compatiblewith modern agile software development practices. This book is one of the firstthat actually provides concrete product management tools based on soundscientific principles, with the specific focus of improving a software productmanager's practices in the fields of agile requirements management and portfolio management. The principles are not only timely but also comply with modern agile principles and in some cases even existing development practices andtools, without becoming too technical or academic.The book that lies in front of you will provide product managers with the insights they need today to grow in an ever changing environment. It will helpsoftware product managers with expert knowledge and support tools for requirements and backlog management, release planning, and portfolio management. All based on extensive academic research and industrial experience. Furthermore, academics can, by reading this book, gain a quick overview of thestate of the art in software product management. We applaud the authors withthis wonderful result and hope this book will become a desk reference for allmodern software product managers.

TRANSCRIPT

  • A publication of the Software Process Research Group (SPRG), Software Business and Engineering Laboratory (SoberIT)

    Towards Agile Product and Portfolio Management

    Jarno Vhniitty, Kristian Rautiainen Ville Heikkil & Kevin Vlaanderen

  • i

    Distribution:

    Aalto University

    School of Science and Technology

    Software Business and Engineering Laboratory (SoberIT)

    P.O. Box 19210

    FI 00076 Aalto

    FINLAND

    URL: http://www.soberit.hut.fi/sprg

    Tel. +358 9 470 24851

    E-mail: sprg@soberit.hut.fi

    2010 Jarno Vhniitty, Kristian Rautiainen, Ville Heikkil & Kevin

    Vlaanderen

    ISBN 978-952-60-3498-0

    Written by

    Jarno Vhniitty, Kristian Rautiainen, Ville Heikkil & Kevin Vlaanderen

    (see page v for details)

    Edited by

    Ville Heikkil, Kristian Rautiainen & Jarno Vhniitty

    Cover art by Ville Heikkil

  • ii

    FOREWORD

    by Sjaak Brinkkemper and Slinger Jansen

    The software industry is going through radical changes. From new development

    technologies to changing delivery paradigms, the field has shown tremendous

    improvements to aid developers in achieving their goals and dynamically facili-

    tating ever increasing requirements from a demanding market. Agile methods,

    such as Scrum, XP, and DSDM, have been introduced with the developer at the

    focal point, leaving behind those who manage the endless supply of require-

    ments from the market.

    The managers in charge of products are still holding on to ancient product man-

    agement techniques, supplied by experts in the field of physical product man-

    agement. These product management techniques do not sufficiently support

    software products, due to the extensive differences between physical and soft-

    ware products. Some examples of these differences are the fact that software is

    malleable, variable, can be released in rapid successive versions, and can be

    duplicated at no costs. Furthermore, there exists only a small range of physical

    products with such specific applications and such a wide range of stakeholders

    in its development and use as software products.

    Software product managers are in need for supportive, modern, dynamic, ad-

    justable, and transparent management methods and tools that are compatible

    with modern agile software development practices. This book is one of the first

    that actually provides concrete product management tools based on sound

    scientific principles, with the specific focus of improving a software product

    manager's practices in the fields of agile requirements management and portfo-

    lio management. The principles are not only timely but also comply with mod-

    ern agile principles and in some cases even existing development practices and

    tools, without becoming too technical or academic.

    The book that lies in front of you will provide product managers with the in-

    sights they need today to grow in an ever changing environment. It will help

    software product managers with expert knowledge and support tools for re-

    quirements and backlog management, release planning, and portfolio manage-

    ment. All based on extensive academic research and industrial experience. Fur-

    thermore, academics can, by reading this book, gain a quick overview of the

    state of the art in software product management. We applaud the authors with

    this wonderful result and hope this book will become a desk reference for all

    modern software product managers.

    Prof. Dr. Sjaak Brinkkemper and Dr. Slinger Jansen, Utrecht University

  • iii

    WHY SHOULD YOU CARE ABOUT AGILE PRODUCT AND PORTFOLIO MANAGEMENT?

    Success in todays software industry requires integrating long-term product and

    business planning with technology development, juggling the scarce develop-

    ment resources so that those activities that from a business perspective are the

    most important get attended to, as well as combining flexibility and control pro-

    vided by modern, agile approaches to software development, such as Scrum.

    However, this is not easy, and to be compatible with agile software develop-

    ment, the enterprise level processes of product and portfolio management have

    to be understood in a new way.

    While there are plenty of books on product management, new product devel-

    opment portfolio management, as well as on agile software development, few

    authors so far deal with how product and portfolio management should be or-

    ganized or even understood together with agile software development methods.

    Thus, as far as these books ignore the other side of the equation, they are actual-

    ly a part of the problem.

    While doing agile right is in principle simple, it is also extremely difficult. The

    cultural implications of a lean/agile transformation are immense, and require a

    lot of unlearning to take place for both individuals as well as organizations. As

    understanding how product and portfolio management can be made agile-

    compatible is not common knowledge, or even that well described in the latest

    literature, it is not a surprise that adopting agile can be a long and winding

    road.

    In this book we provide a synthesis of guidelines from those relatively few au-

    thors out there that deal with the reconciliation of long-term product and busi-

    ness planning, portfolio management and agile software development. Combin-

    ing these with our own findings from a decade of research collaboration with the

    top Finnish Software Companies, we hope you find this book a part of the solu-

    tion.

  • iv

    HOW TO READ THIS BOOK This book is divided into three parts. For a quick start, read this page, see the

    table of contents (page x) and then, the introductions of each part (pages 1, 52

    and 114). After that, you can skip back and forth as you feel like, for much of the

    book has been written so that the different chapters can be read relatively inde-

    pendently. For this reason, you may encounter some repetition as well as a

    heavy degree of cross-referencing between the chapters.

    Part I provides an introduction to this book by recollecting our earlier work on

    time pacing, as well as explaining the difficulties in fitting product and portfolio

    management together with modern, agile/lean approaches to software devel-

    opment.

    Part II presents the Portfolio Management Health Barometer a method for

    assessing whether your company needs to improve on its quest towards enter-

    prise agility as well as the theoretical underpinnings of the method. We also

    describe in detail how to use the method and its accompanying open source sur-

    vey tool to conduct a health barometer assessment for your company or for

    another company, should you be in the consulting business.

    Part III presents our framework for agile product and portfolio management

    and selected practices regarding areas of agile product and portfolio manage-

    ment that have proved challenging in practice. Part III also summarizes key re-

    quirements for backlog management tool support for linking daily work with

    product and portfolio management.

    Throughout the book we have used two kinds of boxes to highlight helpful in-

    formation for those doing a quick skimming through the pages:

    The boxes with a light bulb symbol provide additional helpful tips on the subject mat-

    ter of the text.

    The boxes with a warning sign symbol inform you about common pitfalls and dangers

    related to the subject matter of the text.

  • v

    WHO WROTE THIS BOOK This book summarizes findings from two research projects: First, ATMAN (Ap-

    proach and Tool support for development portfolio MANagement), a research

    project funded by Tekes and the participating companies and conducted by

    members of the Software Process Research Group (SPRG) of the Software Busi-

    ness and Engineering Institute (SoberIT) at the School of Science and Technol-

    ogy of the Aalto University, Finland. Second, the writing of Chapters 11, 12 and

    partly 13 has been funded by the Cloud Software research program conducted in

    collaboration with Finnish universities and software companies.

    The contributions in this book are indicated in the table below chapter by chap-

    ter.

    Chapter 1: Using Time Pacing to Manage Software

    Development

    Kristian Rautiainen &

    Jarno Vhniitty

    Chapter 2: Agile Product and Portfolio

    Management Crucial for Competitiveness

    Jarno Vhniitty

    Chapter 3: The Gap in the Literature Jarno Vhniitty

    Chapter 4: The Portfolio Management Health

    Barometer

    Jarno Vhniitty

    Chapter 5: Performing a Portfolio Management

    Health Barometer Study

    Ville Heikkil & Kristian

    Rautiainen

    Chapter 6: The Health Barometer Tool Kristian Rautiainen

    Chapter 7: Agile Product Management Jarno Vhniitty

    Chapter 8: Portfolio Management and Agile

    Software Development

    Jarno Vhniitty

    Chapter 9: Agile Development Portfolio

    Management

    Jarno Vhniitty & Ville

    Heikkil

    Chapter 10: The Agile Requirements Refinery Kevin Vlaanderen, Slinger

    Jansen, Sjaak Brinkkemper

    & Erik Jaspers

    Chapter 11: Scaling Up Agile Release Planning Ville Heikkil

    Chapter 12: Kanban for Software Development Kristian Rautiainen