The lean portfolio management is a new way to look at the old problem of balancing cost vs. value in product development projects. The idea behind this method of managing projects is to identify and manage only the most important tasks at any given time, so as not to overload your team with too many things to do.
The use of Lean portfolio management agile has exploded in the last decade as more and more companies have found that it is a powerful tool for structuring their product development processes. With this system, managers can easily identify the highest priority projects, ensure that resources are allocated to those projects first and foremost, and create a clear roadmap for how teams should be working together.
Elements of lean portfolio management
- Set goals- Set outcome-based objectives and review them every quarter.
- Target deliverables- Build road maps based on the market requirements and the expected size of effort collected during agile estimation and planning.
- Portfolio budget review- Every quarter confirm the budget allocated and make changes wherever required. Never hesitate to provide extra funds unless it is crucial.
- Portfolio team retrospect- Keep track on how the leadership team functions and makes decisions. Conduct meetings before and after end of the project to discuss ideas and improvements.
- Investment opportunity review- Approve funding for new business opportunities and identify new investors.
Why lean portfolio management?
Organisations focus on long term project goals and get stuck where teams fail to meet the project goals instead of seeking early feedback. Lean portfolio management methods help organisations in the following ways:
Investment and strategy funding
This makes the entire portfolio aligned and ensures funds are ready to meet the business targets. By allocating the right funds to the right places business can ensure funds are being used judiciously. Lean portfolio management (LPM) helps you to understand the organisations current state and develops a plan to address the changing business scenario.
Agile portfolio operations
Agile Portfolio Operations is an innovative approach to portfolio management that helps organisations increase value, manage complexity, and optimise the use of resources. This methodology has been designed with agility in mind, making it a perfect fit for today's fast-paced business world where change is constant.
Lean governance is the organisational structure, process that ensures everyone in the organisation work effectively to extend the organisation's ability in providing value to its customers. Another important aspect is to enable the senior management to give full authority to their teams to fulfil their responsibilities.
Difference between traditional and lean agile approach
|Traditional approaches are often referred to as waterfall models. It starts by defining requirements for a product or service that will be developed, then proceeds through the development of the product, testing it, and finally deployment.||Lean-Agile is an iterative process that works in short cycles which follows more of a spiral path. The projects are broken down into smaller pieces, with each piece being delivered within weeks or days instead of months or years.|
|The process is linear, with one phase following the next in order.||There are no phases; instead, they follow an incremental/iterative model where people frequently build upon their work from previous iterations.|
|The traditional approach involves a lot of documentation and planning.||The lean-agile approach relies heavily on collaboration and feedback from clients and stakeholders throughout the process.|
|This is effective in some cases, but it can also lead to delays or project cancellation when the client has changed their mind about what they want.||This allows for quick changes that keep your clients happy without sacrificing quality or time frame.|
Enterprise agility is a critical element of lean portfolio management. Lean portfolio management focuses on maximising the output of an organisation while minimising waste and cost. It can be challenging to do this when multiple projects are running simultaneously, but enterprise agility allows organisations to manage their total workload more efficiently. In addition, it is the ability to respond quickly and effectively to disruptive changes in the business environment by aligning IT with strategic objectives. Here are few steps to build elements of agile enterprise:
- Streamline portfolio with lean management- Update the business case that removes overly- detailed measures and focuses more on the business objectives.
- Portfolio management cycle- Shorten the portfolio management cycle from an annual to quarterly basis. This is due to the rapid changes in the IT environment the organisation needs to respond quickly to the market requirements.
How to implement lean portfolio management
Form a portfolio leadership team that is high-performing and cross-functional. The portfolio leadership team is an integral part of any organisation's success. The group consists of executives, directors, and managers responsible for the company's essential business functions.
In spite of being in the same organisation, different leaders will have a their own approach towards agile portfolio operations. Discover their point of view and come to a conclusion that aligns with their expectation. In case of any disagreement between leaders, rework the portfolio and encourage new ideas for innovation.
This process provides transparent and objective prioritisation for stakeholders in an organisation's decision-making process. It can help increase efficiency by offering guidelines for decisions that are based on pre-determined criteria. It allows people to make their own decisions while still staying within set boundaries.
Strategic alignment of work
Lean portfolio management permits strategic alignment of work to remake existing work management systems and add additional clarity and new procedures.
Strategic alignment in lean portfolio management is always challenging, but it can be made easier by following these steps.
1.Define your potential outcomes with your stakeholders. This includes where the organisation would like to go in its future and what will happen if they don't change how they do things now.
2.Create a set of objectives that are measurable and achievable given time constraints. These objectives should align with the potential outcomes outlined before with stakeholders, so there is no conflict between them.
3.Break down each objective into specific tasks that need to be completed to meet a purpose or goal.