Overview of Lean Portfolio Management in Scaled Agile Framework

Table of Content :

• What Is the Purpose of Applying Lean Portfolio Management Principles?
• Lean Portfolio Management Vs. Traditional Project Portfolio Management 
• Conclusion 

Lean Portfolio Management (LPM) is a process that applies lean and systems thinking to execute projects. Through the process of applying lean portfolio management principles, management teams help improve business agility. It works in practice because portfolio management teams understand an enterprise's strategy and allocate funds to execute it using lean principles.

The overarching goal of lean portfolio management is to improve the speed and efficiency of deliverables. It seeks to create products and solutions for customers through agile development and is also one of the seven competencies of the Scaled Agile Framework.

What Is the Purpose of Applying Lean Portfolio Management Principles?

With globalization and increased digitization of the world, the pressure on companies to perform has also increased. By adopting SAFe, lean portfolio management can help companies address the challenges of defining, communicating, aligning strategy, and also focus on delivering gradual value. It also helps use feedback from company members, customers, and end-users to measure organization targets. 

With the use of lean portfolio management principles, organizations can build independent teams and reduce delays of deliverables. The principles also help organizations quickly modify short-term goals based on feedback and implement modified strategies.

With digital disruption and uncertainty in the market, lean portfolio management comes to the rescue by helping with better budgeting. With the application of agile budgeting, organizations can provide overall better value.

SAFe Agilist

Certification Course

2 Days of live virtual training

View course

 

Elements of Lean Portfolio Management 

There are three important elements or facets of lean portfolio management. They are strategy and investment funding, Agile portfolio operations, and lean governance.

Strategy and Investment Funding

This dimension focuses on aligning the portfolio to achieve the targets of the business. Through this dimension, the portfolio is organized to achieve the goals of the business. In practice, lean portfolio management uses this dimension to identify the portfolio status and develop better results. 

This requires the cooperation and coming together of different teams such as executives, portfolio stakeholders, etc. The overarching goal of a portfolio must be to focus on a company's main objectives.

Agile Portfolio Operations

This dimension is focused on organization and supporting different programs' executions. The goal of Agile portfolio operation is to improve operational efficiency and delivery of results. The goal is to coordinate and align value streams to improve competitiveness in the marketplace. One way to do that is to redesign the conventional PMO for an Agile Program Management Office (APMO). 

This utilizes the specific skills, expertise, and connections with executives, managers, and other key stakeholders currently comprised of established PMO members. With the transition, the lean portfolio management function can apply program executions across the portfolio. The APMO also practices objective metrics and reporting to business agility. 

Lean Governance

Lean governance is the dimension concerned with providing the structure and processes that ensure effective customer value deliverance. Lean governance aims to achieve several important objectives as follows:

1. People are equipped to complete work: Lean governance is focused on ensuring all teams have the ability and the correct authority to fulfill their responsibilities. Senior management must also provide appropriate support as needed to help teams carry out their work. 
2. Investment is spent judiciously: Lean Governance helps organizations make the best investments be it infrastructure or their people, with the end goal of serving their customers. It works in practice by first identifying the most valuable initiatives to undertake and then executing them. The main goal with investment from a lean governance perspective is to create real business value and achieve a return on investment (ROI). 
3. Effective teamwork: Teams must work in tandem with stakeholders and their organization colleagues. Lean governance aims to achieve that by modifying processes and structures to encourage collaboration. Teams must also ensure that the information they provide to stakeholders is accurate and provided in a timely fashion. Lean governance also places importance on everyone being on the same page when it comes to the broad goals and mission of the organization. 
4. Risk monitoring and mitigation: Another important dimension of lean portfolio management is risk monitoring and mitigation. Organizations need to work to ensure big risks are undertaken with care and proper guidance is provided. The way this will work is if someone is frequently monitoring the portfolio for risks.
5. Long Term Focus: Lean governance must focus on both short-term and long-term organizational goals. For example, there must be a frequent assessment of staff skills and to update traditional strategies that are no longer effective.

Goals of Lean Portfolio Management 

• Reduce Hurdles: The application of lean portfolio management principles helps reduce hurdles when balancing demand and opportunities.
• Maximize the throughput of value: Lean Portfolio management helps identify opportunities with the highest value and then manage the work in progress across teams to expedite value delivery. 
• Reduced delivery time: Lean Portfolio management also helps remove obstacles resulting in low delivery cycle times.

Also Read: Operational Value Streams

Lean Portfolio Management Vs. Traditional Project Portfolio Management 

Unlike traditional project portfolio management, where people are brought to the work, lean portfolio management helps target people directly by bringing the work to them. 

The goal of lean portfolio management is focusing on defining desired results, whereas traditional project portfolio management is focused on the quantity or number of outcomes. 

Unlike traditional project portfolio management, where the goal is managing budgets, lean portfolio management is not overly concerned with costs. The focus instead is on delivering value.

Lean portfolio management is focused on managing budgets quarterly rather than annually, as is the case for traditional project portfolio management.

SAFe Agilist

Certification Course

Get Certified from Scaled Agile

View course

 

Conclusion :

Smart organizations have to spend significant time developing agile systems in the fast-paced IT world with frequent digital disruptions and equally fast-changing customer goals. And once they have achieved that, they reap the benefits of these agile systems by aligning their business and technology teams. 
This is also where the importance of lean portfolio management comes into the picture. In a nutshell, Lean Portfolio management helps with reliable value delivery and allows organizations to pivot with marketplace changes. 
The IT industry has a major shortage of skilled personnel, specifically equipped for future challenges in the digital space. Students also need to learn lean portfolio management skills. Knowledge of Lean Portfolio Management SAFe has many clear benefits, such as improving interaction with customers and responsiveness to their issues, improving product quality by reducing revisions and defects, and optimizing processes.
A safe agile certification or safe training helps bridge this knowledge gap and equips professionals with the necessary skills in demand. Also important to note, a safe course provides a bucket of skills and certifications that help professionals put their lean portfolio management skills to practice. A safe agile certification or safe certification provides individuals with the skills necessary to introduce agile into any size organization.