Traditionally there has been a division between ‘Business as Usual’ (BaU) and ‘Change the Business’. Projects delivered new capabilities to better serve customers and keep an advantage over competition. The primary aim of portfolio management is to align strategy to the best possible set of projects as well as managing delivery. BaU is aimed to achieve maximum efficiency to serve customers as fast as possible against lowest possible costs.
Much has changed since the early 2000’s with regards to how we deliver projects. The traditional division between operations (BaU) and Change disappeared since it was not able to cope with the current advances in technology and the ever-changing customer requirements. Agile fits the new dogma “There is nothing constant but change”. Operations and change has become the domain of self-steering teams who are both responsible for operating the product as well as improving it. Deciding which changes out of a ‘backlog’ of changes provide the most value for customers is in many cases decided upon by the teams.
This raises the question what is the purpose of Project portfolio management?
The answer is: Project portfolio management’s goal is to ensure that the strategic goals of the organization are supported by the necessary capabilities delivered by the teams. As such making sure that the teams are all delivering the right features and capabilities. All this with limited resources such as people (teams) and budget.
Managing the strategic goals and the new capabilities is important because individual teams are not always aware of other interests besides their own. e.g. updated security settings to a variety of system might not bring the most added value to clients but is necessary to stay compliant with new legislation. In such cases an additional ‘layer’ on top of the teams is necessary to get insight in the different backlogs of the teams to know which of the changes are linked to the objective of staying compliant. Portfolio management is responsible to provide such a layer. Usually this will be a program or project depending on the desired output/outcome. Not providing this layer will result in teams operating in isolation not able to align with the strategic goals of the organization.
Coordinating changes over teams is also important because of another reason. In practice products are ‘linked’ or ‘dependent’ on other products. In most cases these can be managed by the teams itself. However, with large changes impacting a large number of products to be delivered before a certain deadline (e.g. in case of new legislation) it’s important that someone manages the ‘critical path’ over the impacted products. Also in this case it’s the role of Portfolio management to provide how the scope of the change can be managed effectively. Not providing this function will result in delay, teams that are not aligned and strategic goals not met.
Thirdly coordinating changes over teams is also important because of limited resources. There are just so many teams that consist of just so many people which should be supported in making the best possible choice in the changes that they can deliver. Portfolio planning combining the strategic goals, the different products and their teams, their dependencies, including actual delivery is the responsibility of portfolio management. Not meeting this requirement results in not delivering the right set of capabilities and as such not providing the best value possible.
Although delivery may have shifted towards agile teams, the need for Project portfolio management remains. Truly successful Agile transformation requires solid portfolio management practices.
We have experience in setting up Portfolio organizations, the underlying processes and governance and we believe that ServiceNow is the ideal technology to support this. Please contact us in case you want more information about:
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