Task: Prioritize Components |
Use selected components to create a prioritized list for inclusion in the portfolio.
Disciplines: Portfolio Management Tasks
Purpose
To prioritize the selected components with regard to resource constraints (human, financial, and production) and portfolio performance targets.
Main Description
At this stage of defining and prioritizing components, compare each component within each work pipeline against one another to derive a sequential order of desirability, as defined by the portfolio metrics and targets. A key concept is the notion of a sequential order. As the term implies, it is critical that the prioritization process results in a list or queue of approved and ranked components (Forced Ranking). Because the organization does not possess unlimited resources and capacity, it is highly unlikely that all “desirable” components can be funded. Some components might show potential contributions when evaluated on their own but would not be funded or authorized when considering constraints in financial and human resource capacity. This prioritization process is also iterative, with loops cycling back to the selection of components task (when establishing the initial priority for components), as well as loops cycling back from the portfolio optimization task (as part of balancing and authorizing the portfolio). The analysis techniques used for this task are often common to those used for the selection of components, with the difference that they now embed a representation of the maximum measure (portfolio target and metric) that reflects the constraint under which the portfolio needs to be optimized. A corporate strategy definition is used to cover the situation when strategic changes in the company's environment may impose sudden strategic changes in the portfolio, such as when the company has to prioritize a certain platform project to quickly meet strategic moves by a competitor. Changes like these might overrule some of the portfolio procedures in place that are designed for portfolio management in a normal business situation.
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