The Basics of Lean Project Portfolio Management

Executive Summary 

This article gives a brief overview of Lean Project Portfolio Management (PPM) and provides the benefits to your organization’s efforts to modernizing their PPM practices. There is greater pressure on organizations today of any size and industry to focus on being lean and agile. Delivering the right solution and adapting to change quickly is no longer a trendy mantra; it is the way of business solutions in the 21^st century. PPM is the practice of prioritizing high-value, high-need investments that bring value to the business as well as continuously steering those investments and evaluating their alignment to the business value process chain of an organization. Lean PPM directs an organization’s focus on eliminating time consuming governance and increasing the overall speed of the planning and reporting processes related to this critical function. Despite which solution execution methodology of waterfall, agile or a hybrid approach, the basic Lean PPM principles expressed below will still apply.

Lean PPM

Today’s business value chain has proven that innovation is king and the ability to adapt quickly to changing business demands is imperative for all organizations to be successful. Lean PPM is essential to speed up decision-making that helps to meet the demand driven by the business value chain. Leadership within an organization must look at the big picture on an iterative basis through which they can continuously align solutions to meet the constant change of business requirements. External and internal factors will cause projects to shift their original goals. With each shift, an assessment of that shift across the portfolio will need to occur. Organizations should use the following techniques to achieve a Lean PPM environment:

1. Lean PPM Adoption Strategy. Start with an implementation team of cross functional project teams, business managers and the project management office (PMO). This team needs to put together a Lean PPM implementation plan to implement Lean PPM within the organization. The plan needs to be a quick read and incorporate pilot example information of how the organization will transition. The plan needs to be distributed to everyone, but use the pilot as the model for success.
2. Lean PPM Guidance. Proper training is critical for the organization. PMI offers a certification in Agile, and it is delivered by an organization that traditional project managers can trust. However, once the training is finished the Project Management Office (PMO) needs to guide the projects along. 

Lean PPM Planning & Prioritizing

Balancing an organization’s portfolio of investments, programs and projects remains a very critical function in a Lean PPM environment. What, at a high level, are the solutions your organization’s teams should deliver? Are the solutions that are being delivered in alignment with your organizational strategic roadmap? Simple questions that demand simple answers, but the process and effort to get to those answers must be as equally simple. Complexity in an organization is not solved by complex solutions. Below are some key basic principles to implementing the planning and prioritization functions within your Lean PPM environment:

1. Decrease the Planning Lifecycle. Five, three and even one year plans do not fit into a Lean PPM environment. The high level ‘Plan’ or roadmap can still be established annually, but must be assessed and allowed to change quarterly, if not monthly.
2. Strategy must be linked at all levels within an organization. For very small organizations, a single strategic roadmap may be sufficient. However, in organizations with multiple business units and layers, there must be a strategic roadmap for each unit that aligns to an organization’s overall roadmap. Changes that occur in each unit’s strategic roadmap should be flagged for realignment to the organization’s strategic roadmap. This type of change needs to occur seamlessly whereas the business manager initially realigns the new strategy, while executive leadership has the ability to review and approve the change through an automated workflow. 
3. Empower the Business Managers to make decisions. In a lean and agile environment, executive management will most likely cause inefficiencies if they drive every decision. Business managers are closer to the outcome that is being delivered and should be given the responsibility to prioritize and plan certain work within their unit. That being said, there is a need for a consistent framework across business units to understand the current state, the business requirement, the impact of the decision, and ultimately how to decide on an optimal solution for a need.
4. Integrate your organization’s decision-making criteria. Empowering business managers to make decisions also requires a level of integration and collaboration between business units. Each unit will have their own perspective as to the best opportunities for the business which means they will have their own set of criteria for making decisions. Business managers across business units should hold recurring and regular enterprise socializations to collaborate and avoid moving in a direction that is in direct conflict with another business unit’s proposed outcomes.

The above principles are key to an organization’s transition to Lean PPM planning and prioritizing. Planning should occur at the value stream level of the organization. The value chain of technology should always align with the context and value chain of the business. In the next section, you will read about Lean PPM Reporting and how visualization of the planning, prioritizing and execution is just as important in a Lean PPM environment.    

Lean PPM Reporting 

An organization’s planning and execution team speed is an important piece of the Lean PPM framework. Just as important remains the need for greater visibility into managing the business opportunities, measuring value, and achieving the appropriate level of resource allocation across the organization. An enterprise PPM software solution enables organizations to automate the collection and reporting of valuable information. Balancing an organization’s portfolio and measuring value at the enterprise level requires sophisticated integration across toolsets as well as business driven aggregation of the data. Below is a list of suggested enterprise level metrics and tactics that would add value from a reporting standpoint in a Lean PPM environment: 

1. Results. Units of work completed per iteration. Standardizing this metric across your organization is very important. The units of work could be measured by iteration, agile team, and/or each resource. This also allows an assessment of your solution delivery team’s velocity or speed at which outcomes are delivered.
2. Alignment. As written in the planning and prioritizing section above, alignment of work efforts to a business unit’s strategic roadmap as well as the enterprise strategic roadmap adds great value to an organization. Enterprise reporting as well as reporting at the business unit level allows for efficient strategic discussions related to the decision-making process in a Lean PPM environment. 
3. Code Coverage. Code coverage measures the percentage of code that is tested via automated tests. Automated testing is critical for agile projects; without it quick agile release cycles are problematic and very costly. There needs to be a focus on quantitative software development metrics produced by automated process.
4. Mandatory Socializations. Socialization is a term to describe the demonstration of working solutions. The demonstration needs to include your organizations solutions delivery team, product owners, business managers and executive leadership. Gaining trust in the delivery team is critical for Lean PPM success and the easiest way to gain trust is to prove that the solution is working as intended.

In relation to Lean PPM Reporting, it is recommended to focus your organization on defining the enterprise level metrics that add value to the decision making process without reducing your delivery team’s velocity. After the metrics have been defined, it is important to focus on the efficient aggregation and reporting cycle that optimizes your end-to-end business model.

Conclusion

Lean PPM directs an organization’s focus on eliminating time consuming governance and increasing the overall speed of the planning and reporting processes related to this critical function. Organizations today are an aggregate of projects. An enterprise PPM software solution gives organizations the ability to store project data in one place, allowing executives to manage from the top down and team members from the bottom up. Projects perform better when executives, customers and team members are collaborating using such a software solution. Your organization will gain high visibility through daily, weekly and monthly reporting on your project portfolio. Your organization will manage change proactively with the support of PMO services and the use of an enterprise PPM software solution.