Roadmap: How to Adopt the Product Portfolio Management Practice |
This roadmap describes how to adopt the product portfolio management practice, which helps organizations prioritize requests into the portfolios and maintain an optimal balance as work is performed.
Main Description
### 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.
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