Managing value with portfolio management – Part 1

There is a growing desire in such an organization to work agile, prompted by a faster changing environment and a new generation of employees. At the same time, we often see multiple development forms next to each other in the implementation (agile/hybrid/waterfall). For example, the organization works agile in the front-end, hybrid on software that cannot be continuously developed (such as in the case of embedded software) and which therefore requires more systematic preparation, and waterfall where the scope is known in advance or must be contractually agreed. These different forms of development require overarching management to ensure coherence and maximize results.

Portfolio management is a suitable means for overall management of IT initiatives, which require various considerations. Portfolio management is a method that allows you to jointly make the right strategic choices and then translate them into execution throughout the organization. Choices that balance innovation and optimization, taking into account limited manufacturing capacity. Coherence is created, without overlap and with control over dependencies. Portfolio management provides direction to the change organization in a structured manner. The big plus is that it gives teams satisfaction to know their contribution to the greater goal.

Now traditional portfolio management is connected to waterfall, while, for example, SAFe portfolio management is connected to scrum/agile software development. Both methods do not provide an adequate framework for the described organization with multiple development forms. But which portfolio management design works? 

Regardless of how development takes place in different corners of the organization: A common interest is the creation of value. And in order to respond to a more rapidly changing environment, an organization as a whole must be able to continuously adjust its value. My recommendation is therefore to organize portfolio management in an organization with multiple development forms to continuously focus on the highest value. To this end, you can organize your portfolio management with agile principles and coordinate the various development forms on a number of points (such as roles and process). In essence, this results in a working method with a regular cycle of (re)assessing initiatives for the highest value, committing resources, realizing results with different development forms and feedback of results for timely adjustment. 

In the next two parts of this blog series we will explain how this works and provide practical tips. A first tip is obvious (but not always easy to do): do not make agile, hybrid and waterfall initiatives too big. Cut them up where necessary. This increases the possibility of having an initial result in a timely manner to assess the value and make adjustments where necessary.