Lean Portfolio Management in Nutshell
A portfolio typically represents a specific area of the enterprise. Traditional approaches to portfolio management were not designed for the continuous digital disruption that organizations face today. Companies today need to work under a high degree of uncertainty, and yet deliver innovative solutions faster. Lean portfolio management (LPM) helps enterprises move away from managing projects to start managing value through value streams. Here is a quick conceptual LPM run down. Lean Portfolio Management helps an organization to set direction and create initiatives to go from the current state to a better future state. It involves three key collaborations: 1) Strategy and investment funding is to ensure that the right solution is being developed at the right time. A lean approach to funding ensures decentralize decision-making and accelerate the flow of new products and services. 2) Agile portfolio operations are to co-ordinate within the portfolio, Align strategy with execution and support operational excellence. 3) Lean Governance is required to close the loop by measuring portfolio performance and supporting dynamic budget adjustments to maximize value. When the right people work together to make all these happen, the organization can be better defined and communicate strategy and improve business outcomes. The results are better organizational strategy and better business outcomes.
Dimensions of Lean Portfolio Management
Strategy and Investment Funding Strategy and Investment funding is defined to make sure that all the portfolio are aligned and funded to meet the solutions of the business goal. The stakeholder of LPM needs to understand the portfolio’s current state and develop a plan to evolve to a better. Stakeholders involved in Strategy and Investment funding are Enterprise Executives, Business Owner and Enterprise Architect. The responsibilities are: - Connect the portfolio to enterprise strategy - Maintain a Portfolio Vision - Realize Portfolio Vision through Epics - Establish Lean Budget and Guardrails - Establish Portfolio flow
Agile Portfolio Operations SAFe recommends decentralization of strategy execution to empower Agile Release Trains (ARTs) and Solution Trains. However, the stakeholder’s needs to make sure that ARTs and Solution Trains are aligned and work within an enterprise context. The stakeholders involved in Agile Portfolio Operations are Agile Program Management Office/ Lean-Agile Center of Excellence (APMO/LACE), Communities of Practice (CoPs) for Release Train Engineers (RTEs) and Scrum Master. The responsibilities are: - Coordinate Value Streams - Support Program Execution - Promote Operational Excellence
Lean Governance Lean Governance is required in portfolio management to measure the performance, budgeting the portfolio dynamically and adherence to compliance. The active stakeholder’s involved in lean governance are – Enterprise Architect, Business Owners and Agile PMO / LACE. The responsibilities are: - Forecast and budget dynamically - Measure portfolio performance - Coordinate continues compliance - Source: https://www.scaledagileframework.com/