Task: Analyze Portfolio Trends and Variances |
Analyze all detailed and aggregated portfolio components to identify trends and variances and to identify required corrective actions.
Disciplines: Product Portfolio Management Tasks Extends: Analyze Portfolio Trends and Variances
Purpose
To provide portfolio stakeholders with warnings about possible negative trends or opportunities so they can steer the portfolios in the optimal direction.
Relationships
Roles | Primary Performer: Portfolio Analyst | Additional Performers:
Inputs | Mandatory: Threats and Opportunities Analysis Validated Progress Status Validated Revenue and Benefits Status | Optional: None
Outputs | Portfolio Recommendations
Main Description
Conduct a set of analyses to measure variances and deviations to the portfolio work during execution, and aggregate detailed component level variances to surface key trends and metrics. Identify the selected set of components that require additional analysis to facilitate exception-based reporting to the portfolio executives and review board. Develop scenarios to understand the impact and interdependencies of those changes to develop corrective actions, as required. Assess potential outcomes that would affect the portfolio either unfavorably or favorably, based on progress achieved and performance trends measured within the portfolios. The following are typical product portfolio performance analysis and trends to be reviewed: Product evolution map Directional policy matrix (DPM) Portfolio matrices SWOT analysis Perceptional maps Boston matrix Product portfolio scorecards SPAN/FAN analysis Product retirements plans Resource histograms and utilization 2-axis model (attractiveness, strategic objectives, risk, quality, value, market share, customer loyalty, and so on) Earned value analysis (EVA) Critical path analysis, schedule and cost variances based on established thresholds Cash flow projections and break-even analysis Burndown charts and velocity trends Features completion rate and backlogs With the analysis of portfolio trends and variances, portfolio executives can make decisions based on current and prescriptive data, thereby supporting a clear and complete understanding of portfolio internal drivers and influences.
Steps
Select analysis and trending techniques
From the composition of the product portfolio and the data sets available to the organization, select the subset of analysis and trending techniques that best suits the needs of the portfolio stakeholders. As the product portfolio management framework and the organizational readiness mature, you can add more advanced and complex techniques to the portfolio analysis and trending needs.
Monitor portfolio trends and variances
Given the analysis and trending techniques selected, conduct the various analyses to identify changes to current portfolio trends that need the attention of the portfolio sponsors and stakeholders.
Conduct what-if and scenario analysis
Internal and external conditions within which the portfolio is being managed will change over time. This will require additional analysis to understand possible impact and dependencies related to works in progress within the portfolio. Outside of the regular analysis and trends already referenced, conduct (as needed) simulation analysis, price sensitivity analysis, what-if scenarios, and impact assessment to respond to internal and external changes to the portfolio. For example, the entry of a new competitor or substantial advances on a competing infrastructure might pose a serious risk to the existing product portfolio. This would require the elaboration of what-if scenarios to assess the range of options that could restore the firm’s competitive position and the potential impact of those if the organization chooses to accelerate investments in its new products. Such exercises would not be conducted at each portfolio review, but would become critical in the event of a substantial change in competitive conditions.
Prepare executive briefings and reports on trends of interest
Compile a list of threats and opportunities that result from the monitoring activities, and then develop recommendations for corrective actions as needed. Prepare an executive briefing about the threats and opportunities relevant to the portfolio, and communicate the results to all affected portfolio stakeholders for inclusion as part of the portfolio reviews.
Key Considerations
The inputs to consider are the results of consolidation and monitoring conditions tasks.
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