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Software Portfolio Management |
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Software Project Portfolio Management
What is Software Project Portfolio Management, and how should I know if my
organization needs it?
Software Portfolio Management is a methodology to measure and prioritize yield
(software development deliverables) over time. It will help your
group triangulate your strategy interests with what your clients
value most with your investment dollars.
Only 50% of companies surveyed in America have any type of structured Project
Portfolio Management process. Further research shows that of those
companies that do have a Portfolio Management process in place, most don't
place Customer Value as the primary driver of their prioritization process, and
consequently, haven't maximized the potential of the process.
A customer value centric project portfolio management process is the single
most important asset a senior executive team can master to ensure continual
growth and sustained profitability for their organization.
If your organization is characterized by any of the following,
then Project Portfolio Management is a process you need:
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There is no functional prioritization process in place for evaluating which
projects to fund next.
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Software development efforts are driven, re-actively, by customer demands.
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High level of project-resource fragmentation (ie: programmers are constantly
jumping from one project, then to another, before the first project gets
completed.)
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The guy with the best power-point presentation gets his project funded.
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The executive able to promote the highest level of urgency gets his
or her project funded.
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The VP with the most clout gets their project funded.
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The customer with the shortest temper gets their project funded.
Do any of the above scenarios occur in your organization?
Software Project Portfolio Management 101
A proper Software Project Portfolio Management process includes a
formalized project request process, an IT Governance Committee, a
classification system, and a project/resource tracking system.
When an idea enters a company, the business owner of the idea completes a
project request and a feasibilty study. The feasibility study includes
the business case for developing the idea, a buy/build/partner option list, a
high-risk estimate for development time and cost, a competive product
study, and finally a calculated ROI analysis.
This project request/feasibility study is then presented to the IT Governance
committee for a go/no go decision. The IT Governance Committee typically
meets every two weeks. Members of this committee are finally responsible
for prioritizing each request based on business value, cost, ROI and overall
corporate strategy priorities.
It helps to categorize all projects into these buckets:
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Adding Additional Revenue
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Protecting Existing Revenue
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Lowering Cost of Doing Business
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Compliance
The committee examines projects in process and when resources become availalble
they dictate what gets worked on next. For this to be a smooth process,
project-resource allocation must be tracked and reported to the comittee, so
they know how soon the next project can begin.
At the end of each quarter, year, etc, the development department can categorize
all projects delivered into the four categories above and demonstrate to the
executive team where their funds have been spent for the past duration.
Remember, corporate strategy is not the plan made at the beginning of the year,
but rather, how investment funds are spent during the year. Whatever
amount of money and time your company spent in these areas represents the
actual strategy your company persued--whether or not it matched their
stratetgy plan!
Some business executives believe Software Project Portfolio Management is the
most important process to implement and master for an executive team.
Recent Posts on Project Portfolio Management...
Anti-Values (3/5/2008 1)
I was sitting in a KFC eating lunch, reading the slogans muraled on the wall. This particular KFC is supposedly the first KFC in America. Yes, it’s in Utah. Along with some chicken legs and a drink, you can enjoy a small exhibit showing Colonel Sander’s original briefcase, white suite, shoes, etc.
One mural read, “Somehow [...]
Book Review: Reinventing Strategy (11/28/2007)
I just finished reading Willie Pietersen’s book, Reinventing Strategy: Using Strategic Learning to Create and Sustain Breakthrough Performance.
Pietersen first sets the stage for the rest of the book by underscoring the need for organizations to be adaptable. He paraphrases Charles Darwin, concluding that is it not the largest, the strongest, or even the most intelligent of species [...]
Book Review: Good To Great (11/27/2007)
I just finished reading Good to Great: Why Some Companies Make the Leap… and Others Don’t, by Jim Collins. This #1 bestseller is the best business development book I have ever read. In fact–I would even say–I can recommend it with every fiber of my being.
Collins takes a team of 20 graduate students from the [...]
Book Review: Product Development for the Lean Enterprise (11/23/2007)
I finished reading Product Development for the Lean Enterprise: Why Toyota’s System Is Four Times More Productive and How You Can Implement It, by Michael N. Kennedy. This book explains why Toyota’s internal product development process has enabled them to surpass the Detroit auto manufacturers production in both volume and quality.
If you haven’t heard already, Toyota now [...]
Book Review: Execution - The Discipline of Getting Things Done (11/22/2007)
I just finished reading Execution: The Discipline of Getting Things Done, by Larry Bossidy and Ram Charan. This is an excellent book that examins the dynamics of making things happen inside of a corporation.
Bossidy and Charan make a case for needing the right people, the right strategy, and the right operations in place to successfully grow [...]
Book Review: Value Innovation Portfolio Management (11/15/2007)
I Just finished reading Value Innovation Portfolio Management: Achieving Double-digit Growth Through Customer Value, by Sheila Mello, Wayne Mackey, Ronald Lasser, and Richard Tait.
This book discusses implementing corporate project portfolio management by focusing on insight gained from your customers as to what they value. I like this because I agree with their premise. They call [...]
Book Review: Optimizing Corporate Portfolio Management (11/15/2007)
I finished reading Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy, by Anad Sanwal. I mentioned in a previous post that this book’s forward was written by Gary L. Crittenden, CFO of CitiCorp, and a friend of mine.
In his detailing of the evolution of Corporate Portfolio Management at American Express, Sanwal makes a [...]
To Gantt or not to Gantt? That is the question! (11/9/2007)
A curious experience is looking on Microsoft’s Project Template website for ‘Software Development Project Plan Templates.’ With Microsoft being a software development company and Project being what it is, you would think there would be many software development templates–some for Waterfall, some for SCRUM, some for XP, some for Crystal, etc.
I found only two. Both [...]
Why should Corporate Strategy be important to us in Development? (10/30/2007)
We code, right!? We code, and play Warcraft. Why should we know or care about corporate strategy?
Well, the answer is that most programmers probably don’t really know what their organization’s corporate strategy is. If you do, you likely have an outstanding manager who has learned that part of their responsibility as a manager is to communicate [...]
What is Software Portfolio Management? (10/30/2007)
What is Software Portfolio Management, or SPM? They never taught us about this in college. This is when you are reading your email in the morning from an unhappy customer who wants new feature X when suddenly your phone rings and the VP of Sales wants to know when you will have an install ready [...]
Optimizing Corporate Portfolio Management (10/30/2007)
I just bought a new book on Portfolio Management called Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy, by Anand Sanwal (Wiley Press).
To my amazement, the forward commentary is by Gary Crittenden, a long-time friend of mine. Gary and I lived near eachother in Munich, Germany years ago. I believe my girlfriend at [...]
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