Getting started
The Product Portfolio Management practice is driven by the ever-increasing
competitive pressures placed on organizations to constantly innovate as a way
to produce more for less, all the time. Although more traditionally seen as
a framework to manage consumer products purchased by external customers
(tangible goods and software products), it is now equally important for organizations
that are developing large-scale applications to be used by internal corporate
customers and stakeholders.
The time and effort required to develop large-scale portfolio management process
reference models from scratch can be substantial. Therefore, consider adopting
a generalized process framework that can be adapted to reflect the specific
criteria, business conditions, and characteristics of your organization, instead. This
not only optimizes the time-to-value of this process, but also provides a foundation
that can be ported to other areas of the business where portfolio management
can generate value, such as project portfolios, application portfolios, and
process improvement portfolios. That us why this Product Portfolio Management
practice has been developed from a generalized version of a portfolio management
model.
Although this reference model might not represent all of the specific varieties
and concepts that your organization wants to include, working from this model
provides a 90% solution that requires minimal effort to adapt and, most important,
provides a foundation of best practices that have been harvested from specialized
consultants and proven models over the years. By using this model, your
organization can focus on the most important components that reflect its particular
nature, such as these elements:
-
Classifications of work requests (such as projects, enhancements, and support)
-
Standardized formats to capture the required data
-
Critical data elements (such as competitive data, differentiating features, and unique capabilities)
-
Prioritization and selection criteria
-
Representative analysis and decision models
-
Executive decision matrices and criteria
- Reporting and publishing formats that can be understood and used across
the organization
Given the immediate priorities of the organization, deployment of all three
main activities of portfolio management (Define and Prioritize, Balance and
Authorize, Monitor the Portfolio and Conduct Reviews) is not recommended. Instead,
select the activity that reflects the most urgent need of the organization and
that people are mostly likely to be ready and willing to adopt. However, it
is typical to approach the deployment of this process model in the natural order
of the activities:
- Define and Prioritize. Process all requests submitted
for the portfolios so that proper classification and standardized evaluation
can lead to effective prioritization.
- Balance and Authorize. Assess and select the most beneficial
sets of components to maximize the portfolio value yet minimize risk. It
is critical to authorize only the work that has been approved by the portfolio
executives.
- Monitor the Portfolio and Conduct Reviews. Conduct regular
and cyclical reviews to monitor all work in progress, as well as to identify
deviations and changes required to maintain an optimal portfolio that is aligned
with the organization’s strategic objectives.
Common pitfalls
There are common pitfalls experienced when adopting a portfolio management
model, including the ones listed in the following subsections.
Trying to do it all at once
As discussed previously, a common pitfall is to deploy the end-to-end portfolio
management process as a single effort. The most important factor to a successful
process initiative is obtaining high levels of adoption. There are considerable
changes and significant cultural impact caused by the implementation of a structured
mechanism to do what has been done intuitively and regulated by the instincts
of a select few executives. Depending on the urgency and readiness of the organization
for a particular portion of a Product Portfolio Management model, determine
which of the three main activities will provide the most value to the organization,
and then focus on that activity initially.
“Homemade” portfolio management framework, created from scratch
Some organizations might decide to undertake the development of their own
portfolio management model, because their needs are so unique. In doing so,
they waste tremendous time and effort, which takes them away from focusing their
scarce resources on distinctive competencies and differentiating capabilities.
They end up owning and needing to maintain a model that the industry should
be providing and maintaining, instead.
The advantage of using the model proposed by this practice is that several
dimensions of this model can be adapted, streamlined, and expanded over time.
You can select how much is initially adapted by starting with relatively
little process adaptation. Instead, for initial deployment, focus on including
critical data, specific scorecards, criteria, and analysis models that are proven
to work within your organization. Once feedback from portfolio stakeholders is
harvested on process areas to be improved, added, or deleted, the progressive
and evolutionary nature of the process framework will encourage adoption and
result in quicker payback to the organization. |