Practice: Product Portfolio Management |
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
Relationships
Content References | How to Adopt the Product Portfolio Management Practice Key Concepts Forced Ranking Product Stage Gating Value Analysis Work Pipeline Work Products Business Case Business Justification Competitive Analysis Component Description Components List Consolidated Demand List Ideas and Requests List Market Analysis Report Portfolio Constraints and Metrics Document Portfolio Recommendations Portfolio Structure Document Product Roadmap Resources List Strategic Business Plan Technology Roadmap Threats and Opportunities Analysis Win-Loss Review Validated Progress Status Validated Revenue and Benefits Status Product Portfolio Management Reference Model Roles Financial Controller Marketing Manager Portfolio Analyst Portfolio Review Board Product Manager Product Portfolio Manager Production Manager Project Manager Resource Manager Team Leader Guidance Release Information: Product Portfolio Management Practice Managing Ideas with IBM Rational Focal Point Reviewing Product Lifecycle Data with Focal Point Measurements
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.
Levels of Adoption
For details on how to adopt this practice, see How to Adopt the Product Portfolio Management Practice.
Additional Information
For more information on portfolio management, see: The Standard for Portfolio Management. Second Edition. Project Management Institute (PMI). Found at http://www.pmi.org/Resources/Pages/Library-of-PMI-Global-Standards-Organizations.aspx
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