Lean Portfolio Management - Targetprocess Agile Portfolio .


Lean Portfolio Management DemystifiedPractical Patterns for Amplifying the Impact of SAFe Scaled Agile, Inc. Scaled Agile, Inc.1

SpeakersAndrew SalesSenior Consultant, SAFe ProgramConsultant Trainer (SPCT) Scaled Agile, Inc.Olga IkhelisHead of Solutions &Consulting at Targetprocess2

Introducing theLean EnterpriseThe Lean Enterprise is a thriving digital agebusiness that delivers competitive systemsand solutions to its customers in the shortestsustainable lead time. ScaledScaled Agile,Agile, Inc.Inc.3

The world’s leading framework for enterprise agilitySAFe for Lean Enterprises is a knowledge baseof proven, integrated principles, practices, andcompetencies for Lean, Agile, and DevOpsscaledagileframework.com Scaled2017 ScaledAgile,Agile,Inc. Inc. All Rights Reserved.4

Lean Portfolio Management Competency Scaled Agile, Inc.5

Moving to Lean Portfolio ManagementSAFe provides transformational patterns to move from traditional mindsets toLean Portfolio Management.From traditional approachTo Lean-Agile approach#1Centralized controlDecentralized decision-making#2Project overloadDemand management; continuous value flow#3Detailed project plansLean, epic-only business cases#4Centralized annual planningDecentralized, rolling-wave planning#5Work breakdown structureAgile estimating and planning#6Project-based funding and controlLean budgeting and self-managing Value Stream#7Waterfall milestonesObjective, fact-based measures and milestones Scaled Agile, Inc.6

Responsibilities of LPM! Connect the portfolio to enterprisestrategy! Maintain a portfolio vision! Fund Value Streams! Establish portfolio flowStrategy &InvestmentFunding! Forecast and budgetdynamically! Coordinate value streams! Measure portfolio performance! Drive operationalexcellence! Coordinate continuouscompliance Scaled Agile, Inc.! Support program executionLeanGovernanceAgilePortfolioOperations7

Strategy &InvestmentFundingConnect the portfolio to enterprise strategyLeanGovernance ations8

The role of Lean Portfolio Management“Most strategy dialogues end up with executives talking atcross-purposes because nobody knows exactly what ismeant by vision and strategy, and no two people ever quiteagree on which topics belong where.”That is why, when you ask members of an executive team todescribe and explain the corporate strategy, you frequently getwildly different answers. We just don’t have a good businessdiscipline for converging on issues this abstract.”—Geoffrey MooreBestselling Author, Consultant andDisruptive Technology Specialist@geoffreymoore Scaled Agile, Inc.9

Connect the portfolio to the enterprise strategyStrategic Themes connect to the strategy!Differentiation from the current state to thedesired future state!A collaboration between LPM and the largerenterprise!Provides context for portfolio vision, leanbudgeting, and decision-makingExamples (for Retail e-commerce company): Scaled Agile, Inc.!Appeal to a younger demographic (18-30)!Reduce warehousing cost by 50%10

Define and charter the portfolio! Define the portfolio domain andbusiness model! Identify key portfolio constructs:partners, activities, resources,cost structure, revenue andbudget! Summarize portfolio valuestreams Scaled Agile, Inc.11

Find your opportunities with SWOT!Establish understanding ofcurrent strengths, weaknessand threats!Identify most significantopportunities Scaled Agile, Inc.12

Envision the future state! Use SWOT opportunities tobrainstorm potential futurestates! Pick one!! Identify the epics that will getyou there Scaled Agile, Inc.PotentialEpics13

Map value stream solutions by horizonHorizon 3Horizon 2Horizon 1Horizon 0DecommissionDecommissionEvaluatingEmerging Scaled Agile, Inc.InvestingExtractingRetiring14

Strategy &InvestmentFundingEstablish portfolio flowLeanGovernance ations15

Govern Epic flow with the Portfolio Kanban!Makes largest business initiatives visible!Brings structure to analysis and decision making!Provides WIP limits to ensure the teams analyze responsibly!Helps prevent unrealistic expectations!Helps drive collaboration amongst the key stakeholdersKanban!Provides a transparent and quantitative basis for economic decision-making Scaled Agile, Inc.16

Portfolio KanbanFunnelReviewAll big ideas arewelcome here!New businessopportunitiesCost savingsMarketplace changesMergers andacquisitionsProblems withexisting solutions Scaled Agile, Inc.Epic HypothesisStatementRefine understandingCalculate WSJFWIP lution alternativesRefine WSJFCost estimateIdentify MVPLean businesscaseWIP limitedGo/ no-go decision17

Epic Hypothesis Statement template & Lean Business Casehttps://www.scaledagileframework.com/epic/ Scaled Agile, Inc.18

MVPs foster innovation and control scope Scaled Agile, Inc.19

Strategy &InvestmentFundingFund Value StreamsLeanGovernance ations20

Problem: Cost-center budgeting ffortCC 4 E CC 3. OrganizationCC 1.CC 2 Scaled Agile, Inc. Project costestimate CC 3 EffortCC 2 EffortEfforCC 1ProjecteffortestimatetTraditional project-based, cost center budgeting creates overhead andfriction, lowers velocity.CC 4ProjectA project requires collaboration of costcenters, assignment of people, budget, andschedule. It takes multiple budgets to builda single project budget.Result:! Slow, complex budgeting process! Leads to utilization-based planning and execution! Low program throughput! Move the people to the work21

Solution: Fund Value Streams not projectsFunding Value Streams provides for full control of spend, with:!No costly and delay-inducing project cost variance analyses!No resource reassignments!No blame game for project overrunsLean BudgetsGuardrails Scaled Agile, Inc.22

Keep investments on track with budget guardrails!Guide investments by horizon!Optimize value and solutionintegrity with capacity allocation! Continuous Business Ownerengagement!Approve significant initiatives Scaled Agile, Inc.23

Ensure spending is aligned with investment horizon guidelines Scaled Agile, Inc.24

Optimize value and solution integrity with capacity allocationSystem and SolutionArchitect/Engineer(Design Authority)New FeaturesEnablersTech Debt and MaintenanceProgramBacklogProduct and SolutionManagement(Content Authority) Scaled Agile, Inc.25

Approve significant initiatives Scaled Agile, Inc.26

Continuous business owner engagement!The money is allocated, but it hasnot been spent!! Business owner engagementassures it is spent on the rightthings Scaled Agile, Inc.27

Self assess: Strategy and Investment Funding1. SitStrategy not formally communicated; project-based funding2. CrawlPortfolio, value streams and LPM responsibilities are defined3. WalkPortfolio prioritization and epic flow are in place4. RunValue stream funding and guardrails in effect5. FlyLean, rolling-wave strategy and budgets support operations and innovationLean Enterprise Health Radar1min Scaled Agile, Inc.28

Self assess: Strategy and Investment Funding Scaled Agile, Inc.29

Strategy &InvestmentFundingSupport Agile Portfolio OperationsLeanGovernance ations30

Agile Portfolio Operations is a collaboration! Support SAFe implementation, relentless improvement and Agile practices toachieve business goals! Enable continuous flow of value through coordination of Value Streams and ARTsCoordinate Value StreamsAgile PMO/LACERTE and SMCoPSupport program executionDrive operational excellence Scaled Agile, Inc.31

LACE mission statement example Scaled Agile, Inc.32

Self assess: Agile Portfolio Operations1. SitCentralized planning and project overload; traditional PMO2. CrawlAgile PMO engaged in Lean-Agile transformation3. WalkDecentralized planning and execution4. RunValue streams coordinated effectively5. FlyRelentlessly improving Lean-Agile operational excellenceLean Enterprise Health Radar1min Scaled Agile, Inc.33

Self assess: Agile Portfolio Operations Scaled Agile, Inc.34

Strategy &InvestmentFundingApply Lean GovernanceLeanGovernance ations35

Lean governance is a collaboration!Collaborate on forecasting and dynamic budgeting with an Agile approach!Establish minimum Lean portfolio metrics necessary to assure strategy isbeing implementedForecast and budget dynamicallyEnterpriseArchitectSolutionPortfolio MgmtMeasure Lean portfolio performanceCoordinate continuous complianceAPMO Scaled Agile, Inc.36

Exercise fiscal governance with dynamic budgetingFinancial governance is still in place. Adjust budgets dynamically to meetchanging business needs.Lean BudgetsLean PortfolioManagementValue Stream 1Value Stream 2Value Stream 3Value Stream 4PI 1 Scaled Agile, Inc.PI 2PI 3PI 437

Measure Lean Portfolio performance: ExampleLean Portfolio Metrics ExampleBenefitExpected ResultMetric UsedEmployee engagementImproved employee satisfaction; lowerturnoverEmployee survey; HR statisticsCustomer satisfactionImproved Net Promoter ScoreNet Promoter Score surveyProductivityReduced average feature cycle timeFeature cycle timeAgilityContinuous improvement in team andprogram measuresTeam, program, and portfolio selfassessments; predictability measureTime to marketMore frequent releasesNumber of releases per yearQualityReduced defect counts and supportcall volumeDefect data and support call volumePartner healthImproving ecosystem relationshipsPartner and vendor surveys Scaled Agile, Inc.38

Self assess: Lean Governance1. SitStage-gated milestones and reporting2. CrawlLean measures established3. WalkLean, objective measurement and Agile forecasting4. RunLean Budgets and guardrails are updated dynamically5. FlyLean governance facilitates innovationLean Enterprise Health Radar1min Scaled Agile, Inc.39

Self assess: Lean Governance Scaled Agile, Inc.

Q&A Scaled Agile, Inc.41

Thank You!For more information, visittargetprocess.com Scaled Agile, Inc.For more information, visitScaledAgileFramework.com Scaled Agile, Inc.42

SAFe provides transformational patterns to move from traditional mindsets to Lean Portfolio Management. From traditional approachTo Lean-Agile approach. #1 Centralized control Decentralized decision-making #2 Project overload Demand management; continuous value flow #3 Detailed project plans Lean, epic-only business cases #4 Centralized annual .