See Project Communications Plan (Chapter 4) for details.
In an agile environment where there are numerous interlinked projects progressing simultaneously, it is necessary to coordinate communications/meetings at the portfolio-level, as well as at the project-level. Without this higher-level meeting coordination, it is very possible that the organization will experience redundancy on some issues while letting others slip through the cracks.
The program should maintain a rolling meeting calendar, viewable by all team members, showing all of the various meetings taking place, their objectives, facilitator, and primary attendees.
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Reports
Overview
This section represents all of the reports (organized and actionable information) that can be generated from the PM data previously collected after it’s been properly analyzed and put into consistent templates by the Program Analyst.
The Program Analyst and Process Developer should work together to understand the needs of their customers and continually improve the reports to meet their requirements. A few core reports are described below, but many other custom reports can be created as well.
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Portfolio view
See the Portfolio Prioritization Process in Appendix D for details.
This core report is designed to provide a one-page snapshot of all program activity. It is broken down into several categories:
Strategy: The high-level goals of the business and the approach for attaining them
Business Objectives: Concrete deliverables and/or milestones that, once achieved, will lead to the attainment of the business strategy
Programs: A grouping of projects that, taken together, will lead to fulfillment of one or more deliverables/milestones required of a business objective
Active Projects: Those that are staffed and actively being managed.
Inactive Projects: Those that have been identified to be critical to overall success, but for which there is no current staffing. These projects are kept on the portfolio view so that they do not lose visibility.
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Program status update
This core report is basically a roll-up or summary of multiple project status reports to the program level. It is designed to give a high-level snapshot of the progress to plan across multiple projects simultaneously. It includes general (Red-Yellow-Green) status and a summary of current issues and risks, but leaves out the details included in the individual project status reports.
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Resource allocations
This core report is designed to give a high-level view of resource utilization approximately 3 to 6 months out, based on current project plans. A bar chart or pie chart graphic is very effective at conveying this type of information. A primary objective of this report is to provide a basis for an operational hiring plan for the program.
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Management dashboard
This report is a combination of the Portfolio View, Program Status, and Resource Allocation reports. Through analysis and consolidation of related information, the Program Analyst highlights the critical few program elements that need management attention.
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Chapter 11: Agile Portfolio Management—Aligning Tactical Projects with Business Strategy
Up to now we’ve been discussing what to do within the project management realm to achieve agility. The focus has been on managing a single project. However, truly agile organizations do not execute projects only one at a time. They execute the right mix of projects to achieve their high-level business objectives. It doesn’t help the organization much if you crank through complex projects, only to realize that there are still gaps in the overall business solution. This is the domain of portfolio management—creating, organizing, and prioritizing the portfolio of projects to best meet company objectives.
Portfolio Management
You will recall that our initial definition of an agile project revolved around internal and external uncertainty. Internal uncertainty is specific to the project itself, while external uncertainty is related to the environment in which the project operates. This external environment includes the cross-functional organization running the project, the corporate parent, competition, customers, and the overall economic environment. Portfolio management encompasses those areas that are external to the project but still within the sponsor organization, such as other (related) projects, business strategy, and organizational resources. Figure 11-1 depicts how a project might fit into a larger portfolio of projects within the parent company, as well as its various external influences. Note that external influences to the project are not always external to the parent company.
Figure 11-1: A general portfolio management structure showing the alignment of high level strategy, business objectives, programs, and individual projects.
Many companies treat portfolio management as an independent process—often an exercise that takes place during the annual business planning cycle. Taken in this context, I probably would not include portfolio management in this book. However, in the accelerated business environment, the project is the business—or, more appropriately, the projects are the business (see Chapter 3). This expanded view of agile PM will further facilitate the quest for organizational agility by ensuring that the company’s scarce resources are best utilized not merely within a single project, but within the company’s portfolio of projects. This concept takes on an even greater importance as changes in the business environment become increasingly rapid. An annual review of the portfolio is no longer adequate. You must be prepared to reprioritize projects, as needed, whenever events cause selection criteria to change value, or criteria weighting to change, or new criteria to be introduced.
Portfolio management is a key linkage between business strategy and tactical project execution, and it is much more effective than trying to tie individual projects directly to business strategy. In the ideal case, strategy would be translated into business objectives, which would be translated into programs, then to projects. All of these would be filtered through the portfolio management machine for optimization. You would then execute your projects, and business strategy would be successfully achieved. However, as you know, the ideal world and the agile world are two different environments. Projects originate from all sorts of places. Business strategies change more frequently than we would like. Competition forces us to change plans on the fly. What worked last year may no longer be applicable today. Resources are available, and then they’re not. Or they get reallocated, causing a ripple effect. All of these realities call for an agile portfolio management process.
Agile Strategy Use portfolio management to create the vital linkage between business strategy and the tactical execution of individual projects.
In the classic project environment, the waterfall of information flows mostly downhill from high-level strategy to business objectives to the program to the individual project (see Figure 11-2). The real value of the portfolio management process is in keeping all of these areas aligned. In this case, most of the aligning happens at the bottom level, where the individual projects reside. Since the classic project operates in a generally more mature industry, it is less likely to be directly influenced by an event outside of the company. The high level strategy, however, is very open to influence by external events. Therefore, changes in the classic portfolio are more likely to be initiated upstream than downstream.
Figure 11-2: In classic portfolio management, external influences start at the top and flow downstream.
Externally influenced changes in the classic paradigm are more likely to be felt initially at the strategy level, then cascade down to the project level.
On the other hand, agile projects, which are more attuned to external influences to start with, are more prone to feel their direct effect at the project level (see Figure 11-3). They also tend to be breaking new technological ground, giving them a potentially greater importance to the overall business schema. All of these dimensions have the power to cause a ripple effect upstream (see Figure 11-4). Essentially, an unexpected change in an individual project could create a business strategy change in the agile environment.
Figure 11-3: In agile portfolio management, external influences are felt directly at the top and bottom and subsequently flow both downstream and upstream.
Figure 11-4: The direction of influence in an agile versus classic portfolio.
Externally influenced changes in the agile paradigm are felt at the project level, as well as at the strategy and objectives levels. This, in turn, can create an upstream ripple effect from the project level to the strategy level.
In industries where agility is truly required, portfolio management inevitably consumes an increasingly significant portion of the senior program manager’s time. In slower-moving industries, however, portfolio management will most likely remain within executive management’s domain. Program and project managers will provide data on the projects, business/financial analysts will weigh the criteria, executive management will select/prioritize the projects, and then the program/project managers will execute the modified portfolio. It is not unusual for this process to take two to three months to come full circle. An annual portfolio review that takes three months may be tolerable (and appropriate) in some industries, but in a fast-paced business environment, this is a recipe for failure. (See Figure 11-5.) Because of the high rate of uncertainty and fierce competition, it will be necessary to do two things:
Integrate portfolio management into the day-to-day/month-to-month project management process.