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28.11.2022

Agile portfolio management: How to plan your project portfolio

Due to the rapid digital transformation and a constantly changing business world, there is nowadays a demand for flexible and interactive management methods in the area of project portfolios. Planning at portfolio level is complex and difficult to predict, as it is exposed to many external influencing factors, among others.

The goals to be achieved are subject to frequent changes and can no longer be represented by an annual plan. These are ideal conditions for the use of agile approaches. Often there are even already first approaches in agile project management, but they are locally limited.

However, only if agility is applied consistently along the entire value streams, an added value can be achieved by this method. Agile portfolio management describes the approach to managing a project portfolio by planning and budgeting in more frequent, shorter cycles, partially decentralizing decision-making and budget authority, and practicing end-to-end transparency.
 

Benefits of the method

Agile portfolio management is a complex task. Agile approaches are the best way to compensate for unpredictable developments, because they can be reacted to and addressed more flexibly than with rigid planning. Establishing further principles from the agile project environment, such as limiting the work in progress (number of active projects), splitting into smaller implementable packages, regular benefit reviews, etc., also increases reliability and the benefits accruing to the recipient of the service.
 

Project management approach

But what does this approach look like in practice and how can it be implemented in a targeted manner?

Five important areas must be considered during implementation.  

  1. The IT vision and strategy must be concise and available. They are one of the most important indicators for prioritizing project plans.
  2. Ideas and initiatives must be able to be incorporated on an ongoing basis and evaluated according to the pull principle. An adaptation of the Kanban process is suitable here, for example.
  3. It must be possible to (re-)prioritize in shorter cycles for the project backlog.
  4. Project planning and implementation should then take place with implementation release in the value streams / functional teams.
  5. A clear system of key performance indicators provides the basis for control and in turn provides input into the IT strategy. 


Agile working methodology

Agile working methods are increasingly becoming the standard, not only in the organization of development teams, but also at management level. However, conventional project planning and management often considerably slows down these innovative, flexible approaches. In addition, a mix of both methods that is not precisely coordinated with each other often proves to be more of a hindrance than a benefit in practice. 

In order to be able to exploit the full potential of an agile methodology, it must be applied from the very beginning, starting with the original idea and ending with the final implementation ─ along the entire value chain.

Portfolio management in practice

In project portfolios, which are often based on annual planning, the plans, which in principle are well conceived, can often only be implemented inadequately. For example, it often requires too long lead times, non-transparent decisions are made due to silo conflicts, or dependencies are not recognized. Sometimes, the project even comes to a halt. However, these imponderables can be countered by transparent decisions and a flexible approach. Agile portfolio management requires conscientious application across all involved parties and departments right from the start of the project.

Changes through agile alignment

In agile methods, processes and progress are continuously evaluated. The budget allocated to development is managed jointly and careful consideration is given to what can be realized as a result. Important decisions are made by those who really have the competence in this area. The pull principle is applied, i.e. topics are tackled in a targeted manner, the number of projects is reduced and obstacles are removed by the management level.

This leads to more satisfied customers and the best possible project results. The success of a project is measured by the extent to which the customer's needs have been met and the customer's wishes fulfilled.

Achieving goals together

In order to be able to implement agile portfolio management to the satisfaction of all participants, common goals must be defined and jointly implemented in the project process. Ideas can be communicated clearly via visualizations, for example. The ongoing review of benefits in the agile domain contributes to the constant monitoring of project progress. Planning and implementation take place in an optimized manner within the value streams. The benefits created and the contribution to the strategy apply as benchmarks for evaluation.

Agile Transformation

Make your business more responsive and flexible with agile approaches, create more business value for you and your customers and win with a faster time to market.

With our experience in integrated ITSM and DevOps environments, Scrum/Kanban and strategic focus on scaling agile, iTSM Group is the ideal partner for agile practices and organisational transformation. 

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