Practice: Product Portfolio Management |
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This practice presents a standardized product portfolio management framework that provides the foundation for the selection, balancing, authorizing, monitoring,
and controlling of work that aligns with the organization's strategic goals. |
Extends: Portfolio Management |
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Relationships
Purpose
Managing products by using traditional product management techniques and models
has proven to be effective in environments with a single or a fairly small set
of products or in environments where product managers have autonomy from one
another and do not share scarce and critical resources that are necessary to
implement their plans. However, in larger-scale corporate environments
where many products exists, where product managers need to tightly coordinate
their efforts to operate with shared teams, and where the profitability of each
product needs to be validated and positioned in relation to the larger strategies
of the organization, this practice provides the extended breadth and scope to
cater to the needs of portfolio executives who are accountable to the overall
profitability and worth of the product investment strategies and actions.
Fundamental notions and practices of portfolio management that have already
proven effective when applied to project portfolio management within IT environments
can be ported over the world of “products” (hard goods or software products).
They can also be adapted to reflect the specific business conditions, criteria,
parameters, and characteristics that are needed to evolve a product portfolio
management framework that drives the decision-making models needed by product
portfolio executives.
A standardized portfolio management framework provides the repeatable and
predictable foundation for traditional product management models to evolve into
broader and adaptable support for executive decisions. This framework also supports
investment models that maximize benefits while minimizing risks, thereby optimizing
the firm’s return on investment (ROI) and return on assets (ROA). |
How to read this practice
The best way to read this practice is to first familiarize yourself with its
overall structure and the Portfolio Management reference model: what it
is in it and how it is organized.
- Begin by making sure that the teams, including stakeholders, understand
what the key concepts are:
- Work pipelines
- Value analysis
- Next, understand how the various participants in a portfolio collaborate
on an ongoing and cyclical manner, for example:
- The portfolio analyst facilitates the processing or requests within the
portfolio work pipelines, coordinates with the portfolio stakeholders, and
keeps all requests within the portfolio current, complete, and relevant.
- Portfolio stakeholders provide timely input, decisions. and actions to
guide prioritization and optimal balancing of the portfolios, while ensuring
that resources and capacities are available to execute on the work of
the portfolio. Their direct involvement and ongoing commitment help focus
the operational teams toward the accomplishment of the goals most beneficial
to the organization.
- The operational teams (project, product, and development) commit to completing
the work in a manner consistent with the approved priorities and to avoid
working on components not formally sponsored and authorized within the portfolios.
- Then understand how these groups collaborate when they perform the following
activities:
- Define and prioritize portfolio
- Balance and authorize portfolio
- Monitor and control portfolio
- Also, understand what work products are used as input to and output from various
tasks, such as the business case, component list, product roadmap, and
so on.
- Last, understand the various guidelines that explain how to define, prioritize,
authorize, and monitor the portfolio components.
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Levels of Adoption
Additional Information
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