Strategic Portfolio Management 101

Author: Lindsey Marymont

Back to school for the latest stakeholder-focused techniques

I don’t know about you, but at this time of the year I become energized by the smell of freshly-sharpened pencils and the fresh promise of brand-new, blank notebooks. I was fortunate enough to spend some time this back-to-school season with Forrester’s Margo Visitacion. Recently we were able to hear directly from Margo in our webinar Strategic Portfolio Management 101: Getting started with outcome-oriented portfolio management, which pulled some concepts from her recent Forrester research, Strategic Portfolio Management is Agile.  I’ve cribbed some notes for you to gain some actionable ideas right here, however, I urge you to listen to the webinar, as well, to ensure you’ve got a thorough grasp of this crucial subject.

“I was told there would be no math”

If agility is now a prerequisite for firms to continuously execute on their digital strategy, then PMO leaders need to double down on linking product outcomes to this particular business strategy. During the webinar, Margo stated these agile delivery practices are gaining traction, with “76% of respondents saying their technology organizations practice continuous planning” a hallmark of agile. Perhaps project success rates have improved because we’re able to check in more often on projects to see if they’re draining resources, costing too much, or running too long before they can do that same amount of damage. PMI reports that “for the first time in five years, the amount of failed investments due to project performance has declined by 20%.” That’s math we all can live with, even if you stressed your math quizzes back in the day.

Who rules the school?

If you remember your senior year of high school, it seemed like everything you and your classmates did set the tone for the whole school. Today, the customer (or internal stakeholder) has the power to influence functional leaders, service managers, plus product and IT service delivery organizations, and can even transform our business models. In fact, “54% of technology and business leaders reported that they are now or will be changing their business model within six months” based on customer obsession. Traditional annual planning processes are no longer enough to keep internal stakeholders or external customers meeting their business goals. During the webinar, Margo showed us how to do continuous agile planning and keep these stakeholders in the center of corporate strategy.

Your seven-step syllabus

When portfolio management gets sufficiently agile, you can “become the communication and analysis vehicle for the entire organization.” Margo went into a lot of helpful detail about how to do so—so once again, I’d suggest you listen to our webinar—but here’s the list and a quick definition for each step:

  1. Vision themes – Strategic portfolio management is led by themes like TD Ameritrade’s – “improve the client experience, grow client assets,” etc. Do you have overarching themes to inform your strategic PMO?
  2. Change request funnel – PMOs are the gatekeeper for ideas, business enhancements and everything demanded of the business. Oversight stays within the portfolio and can be tracked and measured for business value before making a change.
  3. Assessment – Portfolio owners select the appropriate investment using impact, cost and risk reviews.
  4. Trade-off analysis – Identify value-maximizing choices and the priority of those choices.
  5. Backlog- Control of the prioritized list of products, services and features waiting in the wings for project status.
  6. Performance monitoring – Reporting, KPIs and other guardrails that show you’re “making the grade” in strategic portfolio management.
  7. Retrospective analysis – ongoing, continuous performance review and business outcome status measurements that add to portfolio management best practices.

Don’t worry if you were unable to take notes during this review (blog) —you can always contact us directly to get all the answers (plus tutoring!) when your portfolio is put to the strategic test.