Lean Portfolio Management: Everything You Need to Know
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Managing projects in an agile team isn’t an easy task. Whether it’s SAFe, LeSS, or scrum, the idea is to make the team’s goals easily achievable. But what’s the point of easily achievable goals if they don’t meet clients’ needs or aren’t conducive for teams?
For example, project management in an agile team usually involves executing tasks quickly while creating a productive environment for the team. In project management, pleasing only one party (team or client) and neglecting the other is disastrous.
How, then, do you make sure that your teams complete clients’ jobs at the right time, with the right technology—while also creating a positive environment for the team members?
Delivering enterprise software is complex. Plutora’s Value Stream Management Platform makes it easy.
You can achieve this by managing projects in an innovative and disruptive manner. For instance, you can plan and deliver projects based on demand instead of continuing a regular process until it fails.
That’s where lean portfolio management comes in.
The lean portfolio management system is proactive. Although some systems adopt the traditional portfolio management system, those systems aren’t innovative and don’t apply in-demand processes the way lean does.
In this article, we’ll explore what lean portfolio management is and how it’s different from traditional portfolio management systems. You’ll learn how lean helps teams complete clients jobs’ at the right time, with the right technology, and why you should go for it.
Let’s tackle the basics first.
What Is Lean Portfolio Management?
This is a type of portfolio management system that consists of research, strategizing, and timely project execution. With this type of system, you plan and re-plan a project to deliver value-based results.
Lean portfolio management also considers demand management—in other words, executing projects based on a client’s requests. This approach will improve job satisfaction because project management, strategizing, and execution are all based on client demand. That way, teams don’t have to complete multiple tasks at the same time. Rather, they focus on the tasks with the highest demand. In short, your team members not only know what they’re doing but why they’re doing it!
Lean Portfolio Management Stays Relevant and Lets Teams Make Decisions
An important attribute of lean portfolio management is how it can continually stay relevant. For example, this type of management allows you to re-plan a project’s goals in order to prioritize value. That can be a challenge, but it means you don’t have to try to fulfill goals that no longer make sense.
It’s also important to note how lean portfolio management helps teams achieve a healthy environment. It does this by allowing teams to actively make decisions on what steps to take to achieve what a client wants. Here, the team’s success isn’t a measure of how quickly the team members conclude a project. Rather, it’s a measure of how well they achieve goals. This is because teams consider the time of completion beforehand, and they deliver projects in incremental batches.
Some systems that implement lean portfolio management are lean business practices, such as value stream management. This lean business practice allows teams to monitor the software delivery life cycle while adding value to the software.
Value streams are optimized to be more efficient and predictable. Value streams are the steps in software development that create customer value. As part of this process, teams deliver software to customers in batches. You can incorporate value stream management in agile teams like SAFe, LeSS, or scrum for better customer value.
Lean Portfolio Management Versus Traditional Portfolio Management
How does traditional portfolio management differ from lean portfolio management? So many organizations don’t know if they should stick with traditional or move to lean. In this section, we’ll compare the two.
|Lean Portfolio Management||Traditional Portfolio Management|
|The focus is on customer value. So, this system uses value streams.||The focus is more on schedule.|
|This system allows for adaptive execution of tasks. For this reason, projects go out in incremental batches so that customers can send their feedback.||Execution of tasks is plan-based. Therefore, customers get to see their products after plan execution.|
|If there’s negative feedback about a delivered batch, there’s room to re-plan task execution methods. Consequently, there’ll be little or no waste.||Customers have to wait until the end of task execution to see their products. Therefore, negative feedback means the team may need to work on the project again from scratch, causing waste.|
|Release of funds is according to value streams. So, each value stream has an allocated fund.||This system releases funds in the form of yearly budgets. Finance teams manage funds.|
Many organizations are shifting from the traditional to the lean portfolio management system. This is because of its customer value orientation and its ability to reduce waste while creating a healthy environment for teams.
How to Implement Lean Portfolio Management
Are you considering lean portfolio management? If so, it’s necessary to understand how it works and how you can execute it. In this section, we’ll consider how to implement lean portfolio management.
Step 1: Strategize and Plan Execution Methods
The first step to consider is planning task execution methods. This section involves brainstorming and strategizing among the team members. You’ll focus on data-driven decision making. Therefore, your team will plan execution methods that’ll increase business outcomes based on the data you already have.
The team members are a major part of decision making at this stage. Teams need to be active in this process, as they’re the key to suggesting execution methods.
There are no rigid plans from the start on how projects will be executed. Instead, the team will focus on facts and data.
Step 2: Identify Value Streams
Here, instead of the milestones you’d have in the traditional portfolio management systems, you divide projects into value streams. Set apart funds required for the execution of each value stream, treating each value stream independently.
Since value streams are an important part of lean portfolio management, your team will need to know how to visualize and present them. To represent value streams better, many organizations use a value stream mapping (VSM) template.
Step 3: Deliver Software in Incremental Batches
Doing this saves you time. It also reduces waste and helps you ensure that the product you’re delivering is what the customer actually wants. If there’s negative feedback after the delivery of a batch, then the team will work on only that batch and not the whole project.
For instance, the members of a copywriting team can split their projects so that they create an article outline before writing. This will enable the customer to point out sections that won’t add value. If this happens, the team has to rewrite the outline only, not the whole article.
Step 4: Plan and Re-Plan
When you send a completed product to the customer, they may not like some features. And some of those features may affect other features. So, if customers can see their products only after the team is done, you may need to scrape out a lot of features. And that may require a complete overhaul of the software.
The lean portfolio management system takes care of this with its incremental batches of software releases. With this system, you can remove features that don’t meet customers’ expectations from each batch. Then, your teams can re-plan execution methods to avoid a repetition of those underwhelming features.
This all sounds great, right? But there are some drawbacks. Let’s investigate those.
Lean Portfolio Management Isn’t All Rosy
Implementing lean portfolio management into your organization’s process isn’t a small task. Many teams have grown comfortable working with the traditional portfolio management system. However, this transition becomes easier when teams can better understand their portfolio using value stream management platforms (VSMPs). An example of VSMP that many agile teams use is Plutora. Data-driven decision-making influences customer values. So Plutora’s platform provides detailed information on business data that improve business outcomes.
Now you have a better idea of what lean portfolio management really is, how it differs from the traditional portfolio management system, and how you can implement it. Lean portfolio management encourages teamwork. It allows teams to focus on one task at a time, based on demands. It also creates a healthy environment for teams while delivering value to customers. If you want to quickly get started with lean portfolio management, this article may be a great fit for you.