For most organizations, the next best focus area for the transformation is to enhance and improve the effectiveness of the SAFe portfolios. This drives the need for a deeper understanding (and visibility) into the connection between the strategic aims of the business and the way that team-of-teams build plans. Lean Portfolio Management: Frequently Asked Questions They make them as independent as possible while simultaneously interconnecting and coordinating them with the enterprises larger purpose. The new ways of working are becoming second nature for those operating within the development value streams. Analytical cookies are used to understand how visitors interact with the website. The senior leadership team will apply lean principles to manage the portfolio. When should a Lean portfolio be established? Flow and cycle time. When organizations fund team-of-teams through agile budgeting, then empower them to build plans that align to strategic goals, the new distributed accountability model speeds up the overall delivery of value. The road to a better future state should be paved with architectural principles and practices that enable the ongoing evolution of the portfolios solution set. You also have the option to opt-out of these cookies. Enterprise Architects help translate the business vision and strategy into effective technology plans. Build an operating structure that embodies the key pieces of LPM, with a customized feel. Lean management began when engineers at Toyota created a system to reduce waste in their manufacturing line. Unfortunately, this choice can inhibit the adoption of successful execution patterns, standard measures, and reporting that can be developed and applied across the portfolio. devote the people and resources required to implement the most valuable enhancements. 2. Analytical cookies are used to understand how visitors interact with the website. In the past 12 months, PepsiCo's stock price is up around 5.8%, yet investors have a total return of 8.8%, including dividend payouts. Privacy Policy. In order to accomplish that goal, its ideal to follow these eight lean portfolio management steps. It requires modernizing portfolio management, applying Lean-Agile thinking, and organizing Agile teams and ARTs around value streams that deliver a continuous flow of value to the enterprises customers. Scaled Agile Framework and SAFe are registered trademarks of Scaled Agile, Inc. Leverage the cadences to achieve shorter feedback loops. Energy flows where intention goes. and Lean-Agile Leadership 2. Please refine your filters to display data. The effective operation of the LPM function relies on three significant events: Typically, these events are held on a cadence, as illustrated in Figure 7. Topics typically include reviewing epic implementation, the status of KPIs, addressing dependencies, and removing impediments. We just dont have a good business discipline for converging on issues this abstract. This emphasis on flow has been exponentially enhanced in the most current version of the Framework. Our resource management tools help you see team availability, including global holidays, but also oversee their workload across your portfolio. Exemplify the core values 2. That is the portfolio leadership team. Business epics directly deliver business value, while Enabler epics advance the architectural runway to support upcoming business or technical needs. Coordinating and supporting decentralized program execution. Examples include developing an e-commerce website, medical device, or satellite and developing and deploying a software application within an enterprise for internal customers. Pain point #1: Long cycle times on large initiatives. Business Owners should frequently communicate the vision and the strategic themes, for example, during PI planning, all-hands company meetings, and throughout the PI. It does not store any personal data. The cookies is used to store the user consent for the cookies in the category "Necessary". This competency has proven to improve business outcomes for SAFe enterprises building the world's most important . For example, they can map the work requests in the demand-intake process and under initial review to Reviewing. Its used during the management of the portfolio to make sure all projects are meeting your strategic business outcomes while improving investment decisions. 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Conversely, when the LPM practices described in the previous section are expertly applied, and the specific tactics of Portfolio Flow are put into practice, value can move smoothly from the formation of enterprise strategy to the delivery to the market of the solutions that enable that strategy. Everyone working for you should be involved in this type of lean portfolio management. LPM adjusts budgets on a cadence, typically every six months or when significant events warrant, as part of the strategic portfolio review or Participatory Budgeting events (see below). Lean governance is the function that supports oversight of spending, audit, compliance, expenditure, measurement, and reporting. Portfolio managementteams learnabout an enterprises strategy and allocate a budget towards the execution of that strategy. And yet, organizations aren't typically structured in a way that allows them to do so. Surface positive feedback from retrospectives and make sure to celebratetheimproved flow of value through the organization. This cookie is set by GDPR Cookie Consent plugin. Embrace a Lean-Agile mindset 3. Redecorate - LPM brings in new decision-making techniques, like the emphasis on visualizing strategic alignment of the work and guardrail-based governance. The portfolio needs to understand its role in achieving the enterprise strategy. All, members of the train are new to Agile. Gartner Terms of Use 1. If adjusted less frequently, spending is fixed for too long, limiting agility. This allows you to prioritize work across your value streams and make adjustments to work according to demand. ProjectManager is not just a lean portfolio management tool, its also the leading project management hub online. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. LPM and its stakeholders need to create business and enabler Epics that feed directly into the Portfolio Backlog. when should a lean portfolio be established? - kaibiganocw.org These budgets are typically adjusted twice annually using PB. When there are a minimum of six Agile Release Trains that require coordination When required by management because it is better to operate in a completely decentralized environment When it is part of training the executives In the context of strategy and investment funding, portfolio flow describes the process of managing portfolio epics through their lifecycle, including limiting the number of significant and typically cross-cutting initiatives in progress to match the portfolios capacity. Our portfolio roadmap view shows every project in your portfolio in a Gantt chart timeline. This will give you an idea if its the right strategy to execute your portfolio management. Lets first define lean portfolio management and then delve into how it works. Organizations, at times, include the mix of agile and waterfall processes in the Portfolio Kanban to make their heterogeneous portfolio visible across the board. Privacy Policy. and Click here to view the entire roadmap. Lean Portfolio Management: Frequently Asked Questions. Learn the new rules to transformational agility. The cookie is used to store the user consent for the cookies in the category "Analytics". Some changes will require large initiatives to achieve the future state. Apply the SaFe Principles 4. The flow will get value to customers faster, which means customers can pull the product in less time than it had been taking. To continuously connect strategy to execution, the leadership team continuously assesses these targets: To achieve enterprise agility, the leadership team facilitates periodic reviews: Adopting lean practices into existing portfolio leadership teams is a significant change and requires strong organizational change management practices. X When the lack of communication between strategy and execution is hurting value Lean portfolio management (LPM) is a new way of managing company portfolios to increase efficiency and boost customer satisfaction. * Note that many of the concepts and principles described herein are proprietary to Scaled Agile Framework (SAFe). when should a lean portfolio be established? - autaza.com Lean Portfolio Management (LPM): Get Started [2023] Asana The VMO has a primary responsibility in improving portfolio flow. The best way to predict the portfolios future state is to create it through a purposeful and flexible portfolio roadmap (Figure 4). So, the next most important focus for enhancing the portfolio is to understand and implement the practices of portfolio flow that can provide the most significant and most immediate improvements to flow. For more information, see the advanced topic article and whitepaper:Achieving Regulatory and Industry Standards Compliance with SAFe. The LACE is often responsible for leading operational excellence with the help of an RTE and Scrum Master/Team Coach CoP. How can they be on this dedicated value stream? As a result, some enterprises have abandoned the PMO approach, distributing all the responsibilities to ARTs and Solution Trains. , whereby I agree (1) to provide Gartner with my personal information, and understand that information will be transferred outside of mainland China and processed by Gartner group companies and other legitimate processing parties and (2) to be contacted by Gartner group You can re-allocate right from the chart view to balance workload and keep your team productive. Like traditional portfolio management, LPM requires a set of events to establish a cadence for reviewing and prioritizing the proposed work. This forecast includes the MVP, proving or disproving the epics hypothesis and implementation if LPM makes a persevere decision. 5400 Airport Blvd., Suite 300 To this end, Lean-Agile leaders understand their value streams challenges and opportunities. With the deeper discussion of the eight flow accelerators in Principle #6 and the new Portfolio Flow article introduced in SAFe 6.0, the ways to achieve a continuous flow of value through the portfolio are explicit and actionable. Our flexible software can work in agile environments, more traditional methodologies, such as waterfall, or a hybrid for cross-functional teams. The enterprise can objectively evaluate and originate portfolio-level initiatives only when this balance is understood. ProjectManager is award-winning software that helps implement lean portfolio management. As a last resort, make changes to the composition of individual teams only if absolutely necessary to preserve the cohesiveness of high-performing teams. The Portfolio Flow article describes why each of the eight flow accelerators in Principle #6 is important to flow at the portfolio level and provides specific practical how to recommendations for implementing each accelerator. Realize Portfolio Vision Through Epics Many vision changes will require large initiatives (Epics) to achieve the future state. spc q 6.txt - 6. When should a Lean portfolio be established? X When Team and Technical Agility 3. However, this work is not a once-and-done exercise. Relevant stakeholders (essential, not merely interested parties) can attend these events and leverage the portfolio metrics and other insights provided by the APMO. When establishing metrics, what might an organisation focus on from a portfolio perspective that closely aligns with SAFe principle. Ensuring the entire portfolio is aligned and funded to meet business targets. DiscoverGartner BuySmart:Reduce risk and optimize spend on your next tech purchase. Our software is cloud-based, meaning you get real-time data to make better decisions. Necessary cookies are absolutely essential for the website to function properly. Many legacy portfolio practices remain despite massive market changes and how businesses operate in the digital era. Get started with ProjectManager today for free. Lean Governance - provides oversight and decision-making of spending, audit, compliance, forecasting expenses, and performance measurement. More important is who uses lean portfolio management and lean portfolio management tools to manage the portfolio. LPM plays a leadership role in operational excellence, helping the organization achieve its business goals. This way, the steps youve taken to implement lean portfolio management will be always reviewed and refined to improve the value and remove waste. The quote below reminds us that the purpose of alignment is not about centralized control. While SAFe has always focused on flow, the importance of flow at the portfolio level and the corresponding practices may have been less obvious. 8 a.m. 5 p.m. GMT Gartner Terms of Use Agile portfolio operations coordinate and support decentralized ART execution and enable operational excellence. when should a lean portfolio be established? It unleashes all portfolio members creative and productive energy toward achieving its goals and further unlocks peoples intrinsic motivation. *Note that some documents may not be available to all Gartner clients. (LPM) understands how Strategy and Investment funding is established, how to apply Agile Portfolio operations and Lean governance, and how to build a plan for implementing the . Lean Portfolio Management - Scaled Agile Framework Lean Portfolio Management (LPM) - 77% Flashcards | Quizlet When organizations emphasize a planning and execution model that yields continuous value flow, they strive to put value in customers' hands, instead of marking tasks as complete. Lean Portfolio Management (LPM) describes how senior leadership applies lean principles to connect strategy to execution. Everything You Need to Know About SAFe Lean Portfolio Management Emergent design alone is not sufficient at scale. Practice Test 1 Flashcards | Quizlet PPM leaders should identify the right talent for each focus area, having the respective expertise in: They can ensure that the agile program management office (APMO) has an in-depth understanding of agile philosophies, core SAFe terms, LPM events, and traditional PMO services such as data collection, analysis, reporting, etc. Once you get to this step, youll be back at the beginning as lean never stops. Business leaders, portfolio managers, value stream owners and the Agile PMO have to work together to: Forecast and budget dynamically across the enterprise. Still, they need additional structure to coordinate agile teams and optimize their use. In other words, aligning investments with returns. When should a Lean Portfolio be established? When the lack of One of the best ways to address these questions is to engage higher-level leaders with practical examples of how Lean-Agile practice patterns directly contribute to better business results and how extending those patterns into their areas of responsibility can further accelerate business agility. Figure 8 compares the strategic portfolio review and portfolio sync events. Because LPM is vital to the enterprise, executives and business owners who understand the financial, technical, and business contexts hold strategy and investment funding responsibilities. Its typically held on a quarterly cadence, at least one month before the next PI Planning event, to enable value streams to prepare and respond to any changes. The Lean Portfolio Management (LPM) competency aligns strategy and execution by applying Lean and systems thinking approaches to strategy and investment funding, Agile portfolio operations, and governance. The value stream is activities that enact your strategies and objectives to deliver value to customers and your business. evaluate the health of existing portfolios, identify the areas of greatest opportunity for improvement, then. Move back in - Recalibrate the active, funded work into leaner constructs that better support the flow of value, and consider using this opportunity to revisit the rationale for the work (pivot or persevere?). Each has the ability to allocate funding, translate enterprise strategy into a local context, and govern execution and spending. Strategy and investment funding ensures the right work is happening at the right time. Continuous and early feedback on current initiatives, coupled with a Lean approach to funding, allows the portfolio to make the necessary adjustments to meet its business targets. Fortunately, many enterprises have already traveled this path, and the change patterns are apparent, as shown in Figure 1. Boulder, CO 80301 USA, Privacy Policy The LACE can coach RTEs, and Scrum Masters/Team Coaches to address, optimize, and debug issues with achieving continuous flow. One of the key tenets of any Lean-Agile practice is the idea of maximizing value for the customer. SAFe Lean Portfolio Management 6.0 Agile Digest Developing the vision and strategy can be difficult and time-consuming. Organizations must respond simultaneously to new business challenges and implement larger-scale architectural initiatives requiring intentionality and planning. Cookie Policy Gaining portfolio alignment requires people to work toward a shared goal and purpose beyond any individual, team, ART, or value stream. John May is an enterprise solutions architect, product advisor, and thought leader for Atlassian. There are other reports, too, such as for timesheets, workload, variance and more. Every enterprise uses data to improve its products, optimize operations, and better understand its customers and markets. Recommended resources for Gartner clients*: 6 Practices for Effective Portfolio Management, 3 Steps for Starting SAFe Lean Portfolio Management, How PPM Leaders Can Use Zero-Based Prioritization to Refocus Portfolios on Strategic Initiatives. Continuous delivery is an agile development principle often incorporated in lean portfolio management as part of its value stream. Guardrails support these budgets by providing governance and spending policies and practices. All views update in real time so theres one source of truth. Early in the Implementation Roadmap, we recommended that the LACE train executives, managers, and leaders in basic SAFe concepts and specifically in how they can contribute to better value delivery by transitioning to Lean Portfolio Management (LPM). When should a Lean Portfolio be established a. Things have changed since the initial value streams were configured: Organizational Agility (one of the seven core competencies of business agility) is the ability to recognize when things have shifted and a willingness to make adjustments to maintain an optimal flow of value. Each DVS builds, supports, and maintains Solutions delivered to the Customer, whether internal or external to the enterprise. Portfolio managers can find inefficiencies and remove them to increase value and decrease cost. epics moving through the portfolio encounter bottlenecks, the portfolio takes on too much WIP, exceeding the capacity of its value streams, portfolio leaders continue to apply legacy waterfall governance policies to Agile development, shifts in solution strategy are not validated with customers through fast feedback, Analysis of value flow has revealed bottlenecks. Portfolio business and enabler epics, capture, analyze, and approve new business and technology initiatives. Theyre a valuable resource that should be tapped by teams. Here we illustrate the approach to implementing a Portfolio Kanban system. Lean portfolio management does this by using the five principles of lean. Neither images nor text can be copied from this site without the express written permission of the copyright holder. These initiatives typically require the collaboration of multiple value streams or the creation of new value streams or ARTs. Lean Portfolio Management offers a path to maximizing these advantages and building a more connected enterprise. Market rhythms. What Is Lean Portfolio Management? A Quick Guide When is an Epic considered done? It does not store any personal data. Portfolios connect the enterprises strategy to the execution of value creation by aligning the vision, Lean budgets, value stream organization, and epic priorities with the larger aims of the business. Early in the Implementation Roadmap, work was done to identify value streams and organize ARTs around the flow of value. Shift the operations focus to delivering incremental value at shorter cadences for larger initiatives. Enterprise Architects also facilitate the reuse of hardware and software components and proven design patterns across the portfolio to help value streams develop and enhance solutions faster and with higher quality. Theyll carry the day-to-day impact of lean thinking as theyre responsible for deploying lean techniques and using lean portfolio management tools. This event has a more operational focus than the strategic portfolio review. LPM was inspired by the lean methodology, which started small but quickly spread to the masses. Demand, whether operational or from a customer request, should be prioritized against your strategic priorities and carried out after reviewing the estimated cost and benefits expected. Once this purpose is met, the portfolio is fixed afterward. Ideally, adjustments to value streams can be implemented by simply adjusting team backlogs to support the reconfigured value streams. when should a lean portfolio be established? Try our roadmap template to get started. Adopting an enterprise-level model like Scaled Agile Framework (SAFe)* lean portfolio management can help PPM leaders align their portfolios with strategic business outcomes and improve investment decisions across the portfolio. As described earlier, SAFe provides a Lean approach to budgetinga lightweight, more fluid, Agile process that replaces the fixed, long-range budget cycles, financial commitments, and fixed-scope expectations of a traditional planning process. They establish a framework for creating an efficient organization of all projects in a portfolio. Lean encourages an organization to maximize the work not done. To continue with this analogy, hereare some tipsfora lean home renovation: Lean Portfolio Management brings time-tested lean principles to the teams and leaders that are best positioned to drive organizational change. In order for lean portfolio management to be effective, it must be implemented throughout an organization. Why Big Companies Need Lean Startup Techniques - Gartner In the spirit of SAFes core value of relentless improvement, the next best action to enhance the portfolio is to begin a focused and deliberate journey to: The critical moves to relentlessly improve portfolios include: The central aim of SAFe is to facilitate the continuous flow of value to customers in the sustainably shortest lead time. The information on this page is 2010-2023 Scaled Agile, Inc. and is protected by US and International copyright laws. This event focuses on achieving and advancing the portfolio vision. The following sections describe these dimensions. Be sure to monitor your planned costs against your actual costs to stay on track and reallocate as needed. To close this gap, leaders need the ability to: As businesses seek alignment and to stay aligned, they often find traditional methods of portfolio management are ineffective. Monday through Friday. View spc q 6.txt from BUSG MISC at Austin Community College District. Use this free Roadmap Template for Excel to manage your projects better. Here is only some of our content thats related to portfolio management. The color-coded workload chart makes it easy to see who is over-allocated and who is under-allocated, on vacation or assigned to a task. The point is to identify what isnt creating value and eliminate that waste. This helps to maximize your efficiency and realize your strategic objectives. Things to think about are the timeline for manufacturing and delivering a product, its price and requirements or expectations to meet. This new funding model allows the enterprise to eliminate or reduce the need for traditional project-based funding and cost accounting, reducing friction, delays, and overhead. A well-trained APMO can make knowledge-sharing more collaborative and fruitful. Except for Funnel, it is essential to set WIP limits for every state for a value-driven Kanban system. Continuous compliance Plans arent chiseled in stone. Lean Portfolio Management (LPM) has accepted the Epic All of the Epic's features are completed The customer accepts the Epic Portfolio governance is no longer required Portfolio governance is no longer required What is an example of using leading indicators in Lean Portfolio Management (LPM)? By clicking the "Continue" button, you are agreeing to the The third, and equally critical type of collaboration that must take place in Lean Portfolio Management is Lean governancehow decisions are made across the portfolio (s). Therefore, it is crucial to invest in developing a strong metrics capability. In the previous articles in the SAFe Implementation Roadmap series, we described the first eleven critical moves of the roadmap: By this point in the journey through the SAFe implementation, a lot has been accomplished. This makes enterprise architecture a critical component of strategy and investment funding. Can any active work be stopped or scaled back? These are high-level people in the organization. Principle #6- Make value flow without interruptions, 2. The following sections describe their duties. Theportfolio sync provides visibility into how well the portfolio is progressing toward meeting its objectives. Organizations are increasingly looking to agile frameworks to manage costs while delivering value and agility effectively. Operational excellence focuses on continually improving efficiency, practices, and results to optimize business performance. Collectively, these competencies work together to create superior economic outcomes. Flow time, load, and distribution are particularly relevant to the portfolio and are briefly described below. 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