Agile Portfolio Management

A Guide to the Methodology and Its Successful Implementation “Knowledge That Sets You Apart”

Klaus Nielsen

• Publisher: Productivity Press
• Year: 2021
• Print ISBN: 9781032059761
• eBook ISBN: 9781000432244
• Topic: Business
• Subtopic: Management
• Index: Business

Agile Portfolio Management deals with how an organization identifies, prioritizes, organizes, and manages different products. This is done in a streamlined way in order to optimize the development of value in a manner that's sustainable in the long run. It ensures that a company provides their clients with the best value for their investment. A good portfolio manager understands and follows the agile principles while also considering the various factors needed to successfully manage numerous teams and projects.

The project management offices of many organizations are faced with the reality of more and more agile deliverables as part of agile transformations; however, they lack the knowledge to perform these tasks. Researchers and practitioners have a good understanding of project, program, and portfolio management from a plan-based perspective. They have common standards from Axelos, PMI, and others, so they know the best practices. The understanding of agile on a team level is fairly mature and the knowledge of more agile teams (scaling) is increasing. However, the knowledge of agile portfolio management is still limited. The aim of this book is to give the reader an understanding of management of a portfolio of agile deliverables, what the options are (theory), what we know (research), and what others are doing (practice).

Many organizations in banking or insurance, to name a few, are in the middle of major agile transformations with limited knowledge of the practice. In this book, the author collects and analyzes common practices in various industries. He provides both theory and, through case studies, the practical aspects of agile portfolio management.

Chapter 1 “Financial” Project Portfolio Management

Figure 1.1 Overview.

1.1 The Short History of Project Portfolio Management (PPM)

Humans have worked with projects since the dawn of civilization. Just think about the wonders of the world – the Hanging Gardens of Babylon were probably built around 605 BC. Going forward in time to the 1605 premiere of the play The Merchant of Venice, William Shakespeare’s Antonio understands that the portfolio principle of “diversification” makes his business more robust against temporary and local fluctuations.

Believe me, no. I thank my fortune for it.

My ventures are not in one bottom trusted.

Nor to one place, nor is my whole estate.

Upon the fortune of this present year.

Therefore my merchandise makes me not sad.

(Act I scene 1)

Shortly after World War II, the literature began to recognize the contextual structures of what we describe today as project portfolio management, or simply PPM. In the 1940s project portfolio management was relatively simple; some might argue it was underdeveloped and straightforward. The classical project management perspective covers the thinking emerging in the 1950s, e.g., technically oriented project management which was encouraged by the US Department of Defense because it was needed to control the development of the Polaris submarines. At that point in time, project portfolio management was mainly applied in the military and in defence, where it was used mostly for project selection. In 1952, portfolio research that focuses on financial portfolios rather than being directly applicable to project portfolios was developed by Nobel prize winner H. M. Markowitch (in the Journal of Finance and later in the book Modern Portfolio Theory). Markowitch talks about taking risks into account, the importance of diversity, and balancing the financial portfolio. Markowitch’s thinking shaped the thinking about project portfolio management for generations to come, which sometimes leads us to think about, or label, project portfolio management as “financial” project portfolio management. This thinking continued until the 1980s when Cooper’s Stage-Gate model was introduced and became the de facto standard for project portfolio management for years to come. Work by Cooper and others has given rise to modern project portfolio management theory where projects as components of the portfolio play a major part. In the 1990s the Stage-Gate model developed further: the basic idea is that an organization has several gates, and a project is required to provide some pre-specified information before proceeding to the next gate. As Western societies become increasingly more project-oriented, organizations are experiencing ongoing challenges in managing their project portfolios, since projects constitute a major part of the organizational budgets and strategic development.

The first scaled agile approach on the market was Crystal, in 1992, introduced by Alastair Cockburn. However, scaling agile had to wait another 15 years for a breakthrough. Most people may remember the dot-com implosion of the 2000s and an awareness of international maturity models (e.g., OPM3 and P3M3) that assume that there is a positive correlation between adoption of the defined practices of those models and the success of organizations’ project portfolio management. Nolan and McFarlan (2005) document with the IT strategic impact grid how portfolios driven by IT/IS-related research due to the emerging need for managing portfolios of IT projects – The IT strategic im...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Contents
• Preface
• Acknowledgements
• About the Author
• How This Book Is Organized
• 1 “Financial” Project Portfolio Management
• 2 The Reality of Agile@Scale
• 3 Agile Portfolio Management (APM)
• 4 Agile Portfolio Management Frameworks
• 5 Project Portfolio Management Versus Agile Portfolio Management
• 6 Hybrid Portfolio Management
• 7 Implementing Agile Portfolio Management
• 8 Tailoring Agile Portfolio Management
• 9 Case Studies on Agile Portfolio Management
• References
• Glossary of Terms and Acronyms
• Index