Intro to agile portfolio governance v6

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Kevin Thompson, PhD, PMP, ACP, CSP, CSM!
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Introduction to  
Agile Portfolio Governance"

Copyright 2013, cPrime Inc. !
2"2
Who is cPrime? 
Engaged For Your Project-management Success"

3"3
Who Are You?
"
1)  How big is your organization?!
2)  What is the dominant type of project in your portfolio?!
3)  Which of these best characterizes the products you develop?!
4)  What is the biggest issue in your Portfolio Governance?!
5)  Which topic would you most like to see addressed in our next
webinar?!
"

4"4
Start Communicating!!
•  Download the white paper “Recipes for Agile
Governance (RAGE): The Enterprise Web.” "
•  Email: agileexpert@cprime.com "
•  Social media: #RAGEwebinar "
•  Share ideas and you could win an iPad! "
http://www.cprimelabs.org:8090/display/AgileGov/Agile+Governance+Home "
•  Give a real world example of how a company could use one of the
principles discussed in the white paper/webinar.!
•  Tell us about the biggest problem you face that this model would
address. !

5"5
After the webinar…"
•  We will send directions to collect the PDU you will
earn from attending this webinar "
•  We will also send a links to the recorded webinar
and presentation slides once they are posted online"
•  Please hold your questions until the end of the
presentation"
"

6"6
About Our Presenter"
Kevin Thompson, Ph.D., has a doctorate in Physics from
Princeton University, and extensive background in
managing software development projects. He specializes
in training individuals, teams, and organizations in agile
development. Dr. Thompson helps companies make the
challenging transition to agile development by working
with development teams and business stakeholders to
identify their needs, define the right process for the
business, determine the steps needed to implement the
process, and work through the steps successfully. Dr.
Thompson has Project Management Professional (PMP),
Agile Certified Practitioner (ACP), Scrum Master (CSM),
and Scrum Practitioner (CSP) certifications."
Kevin Thompson

7"7
What will You Learn Today?"
•  Basic recipes for Agile Portfolio Management"
•  How to develop business cases!
•  How to estimate ROI!
•  How to make portfolio decisions!
•  How to evaluate Initiative status!
•  This approach incorporates Principles of Agile
Governance"
•  Download “Recipes for Agile Governance: The Enterprise Web”
from www.cprime.com for much more detail!

8"8
Review: Agile Governance"
Governance: The formalization and exercise of
repeatable decision-making practices"
"
•  Governance = how to decide what to do"
•  Agile Governance is an Agile style of governance"
•  Enables rapid decisions, based on lightweight artifacts
developed with minimum effort!
•  Applicable to any process (Agile, Plan-Driven, Hybrid, etc.)!
Governance Recipe: A mildly prescriptive and
customizable technique for making a speciﬁc type
of decision"

9"9
Review: 
How the Principles Work Together"
Recipes have Standard Elements, including
Common Role Types and Categories of
Governance Points. We organize deliverables at
each level into a small number of coarse-
Granularity items, which we rank by value, and for
which our estimates for effort, value, etc. should be
Good Enough for the current need, and no better.
Work is always completed to a Deﬁnition of Done,
and the Handoff from source to receiver is
accomplished through sustained interaction over
time."
Download Recipes for Agile Governance: The Enterprise Web !

10"10
Review: Levels of Governance"
•  Classic perspective"
•  Project: Temporary endeavor to deliver a ﬁxed scope!
•  Program: Collection of linked projects!
•  Portfolio: Group of Programs/Projects to be managed together!
•  Classic deﬁnitions don’t map well to Agile world, but…"
•  Hierarchical organization is still relevant."
•  Our levels for Agile Governance"
•  Project Level: Refers to work of a single Team, which is a persistent
grouping of people!
•  Program Level: Refers to the collaboration between Teams!
•  Portfolio Level: Refers to the development and management of
business Initiatives that lead to program- and project-level work!

11"11
Levels of Governance"

12"12
Portfolio Governance Deﬁned"
•  We deﬁne Portfolio Governance to be about"
•  Deciding which Initiatives to undertake, and in what order!
•  Deciding whether to continue, modify, or cancel ongoing
Initiatives!
•  We will examine how to make these decisions
quickly and effectively"

13"13
Portfolio Governance Summary"
•  The Area Product Owner provides draft Business Cases for
review in Portfolio Grooming Meetings. Program Manager,
technical leads estimate effort and give feedback."
•  In the Portfolio Planning Meetings"
•  The Portfolio Owner discusses new Business Cases with Area Product
Owners and Program Managers to improve consensus on the Return and
Investment numbers of each Business Case, and to rank the current
Business Cases by ROI, and to move approved Business Cases into the
Portfolio Backlog.!
•  Program Managers provide their assessments of when new Initiatives are
likely to begin, based on current work status and Portfolio Backlog ranking. !
•  All discuss current work status, possible changes to plans!
•  Portfolio Owner makes ﬁnal decision to continue, revise, or cancel Initiatives
under way!

14"14
Starting Point: The Business Case"
•  A Business Case describes an Initiative’s"
•  Concept!
•  Value!
•  Cost!
•  We suggest a one-page Business Case that includes"
•  Agile Charter!
•  Return on Investment estimate!
•  Anything else you need!
•  Business case is done (to Deﬁnition of Done) when"
•  Charter, ROI, other required elements are provided!

15"15
Agile Charter"
•  What it is"
•  Simplest useful statement about what the Initiative is intended to
do, and why!
•  Purpose it serves"
•  Generate and maintain consensus understanding!
•  Standard elements"
•  Vision for Initiative: What the Initiative will produce!
•  Mission: What our business will do with the deliverables!
•  Success Criteria: How to know if we’ve succeeded!

16"16
Product Vision"The Product Vision addresses these
questions:"
1.  Who will buy and use the product?!
2.  What customer needs will the product
address? !
3.  What category is the product in?!
4.  Which attributes must the product have to
address key customer needs selected, which
are critical for the success of the product? !
5.  How does the product compare against
existing products? What are the product’s
unique selling points? !
“For a (target customer) who (statement of the need or
opportunity), the (product name) is a (product category) that (key
beneﬁt, compelling reason to buy). Unlike (primary competitive
alternative) our product (statement of primary differentiation).”"
From Crossing the Chasm, by Geoffrey Moore. © 1999 by HarberBusiness
Dig Deep!

17"17
Charter: Example"
Product Vision"
For aerospace engineering majors wanting to explore aerodynamics with
paper planes, Airplanes for Geniuses is a book that provides an extensive
set of easy-to-build planes. Unlike other books, Airplanes for Geniuses gives
a concise description of aerodynamic principles at work for each plane,
enabling the reader to observe the connection between principles and
performance through experimentation.!
Mission"
Publish and sell a book for aerospace engineering majors, which
demonstrates the principles of aerodynamics by using paper planes!
Success Criteria"
1.  Available to customers June 1, 2012!
2.  Ship 500 copies through 5 campus book stores in Q3!
3.  Ship 2000 copies through 20 campus book stores in Q4!
4.  Keep proﬁt margin per book above 10%!

18"18
Return on Investment"
•  ROI is key driver for investment decisions"
•  ROI= 𝑅/𝐼 "
•  R = Return (some measure of value)!
•  I = Investment (some measure of cost)!
•  The larger ROI, the greater the beneﬁt for our
investment"
•  The challenge is in estimating R and I!

19"19
How to Estimate ROI"
Steps are easy to understand"
1.  Estimate the Return"
1.  Total revenues from Initiative!
2.  Net Present Value!
3.  Etc.!
2.  Estimate the Investment"
1.  Effort!
2.  Cost!
3.  Compute ratio"
"
Sadly, this is not usually possible"

20"20
Understand the Limits 
of what is Possible"
•  The Return is composed of many factors"
•  The Effort is composed of many factors"
•  Limitations"
•  All factors are highly uncertain!
•  No factors can be estimated reliably!
•  Most factors cannot be tied to real-world numbers"
•  What is achievable—and sufﬁcient"
•  Understand whether ROI is better or worse for different Initiatives!
•  Express Return as weighted sum of standard factors!
•  Express Investment as weighted sum of standard factors!
•  Deﬁne common scale for factors based on relative values!

21"21
Example ROI Calculation"
1.  Select Return factors"
•  Value-related items!
•  NPV is often WAG!
2.  Select Investment factors"
•  Cost-related items!
3.  Select weights for factors"
•  Range: 0—1 !
4.  Select ﬁnite Rating scale
for factors"
Weight"
1.0!
0.5!
1.0!
Weight
1.0
1.0
Return Factor"
Net Present Value!
Urgency!
Regulatory Compliance!
Investment Factor
Effort to implement
Technical Risk
Scale Values
Fibonacci 0,1,2,3,5,8
NPV=5, Urgency=3, Reg. Compliance = 1, Effort=8, Risk=1!
𝑅𝑂𝐼=(1×5+0.5×3+1×1)/1×8+1×1 =0.83
Example:"

22"22
Portfolio Backlog"
•  Items in Portfolio Backlog are Business Cases"
•  Items are ranked (sequenced) in order of decreasing ROI"
•  Analogous to Product Backlog in Scrum!
•  Do largest ROI items soonest"
•  Schedule for when bandwidth becomes available!
•  Minimize parallel Initiatives to maximize productivity!

23"23
Tracking and Metrics"
Burn-Up Chart"
•  Per Initiative!
•  Per Release!
Relationship between
Initiatives and Releases is
Many-to-Many"
R1 R2 R3
I1
I2 I3

24"24
Decisions about Ongoing Initiatives"
1.  Continue Initiative"
•  Assumptions valid, progress on track!
2.  Cut scope"
•  Assumptions valid, but won’t hit planned goals!
3.  Add scope"
•  Assumptions valid, but ahead of schedule!
4.  Change scope"
•  Value can be improved with scope changes!
•  Remove as much work as is added!!
5.  Cancel Initiative"
•  Changes in needs make planned value not worth pursuing,
compared to alternatives!

25"25
Roles"
Area Product Owner
•  Works with customers, stakeholders to define & prioritize user-facing
features
•  Develops Business Cases for Initiatives
•  Estimates value factors for Initiatives
•  Works with Program Manager, others to get effort estimates
•  Runs Portfolio Grooming Meeting
Portfolio Owner
•  Authority over Initiative selection and
prioritization
•  Reviews Business Cases
•  Sets ranking of Initiatives
•  Decides whether to continue, revise, or
terminate Initiatives in flight
•  Runs Portfolio Planning Meeting
Program Manager
•  Ensures cross-Team
collaboration is done well
•  Facilitates effort estimation for
Initiatives
•  Supplies Teams’ schedule,
capacity information needed
for Portfolio planning

26"26
Portfolio Grooming Meeting"
•  Purpose: Ensure Business Cases are ready for next Portfolio
Planning Meeting!
•  Area Product Owner facilitates!
•  When: 2—4 hours per month!
•  Who: Area Product Owner, Team Product Owners, Program
Manager(s), technical leads (Engineering and QA)!
Agenda"
•  Provide feedback on clarity, quality, completeness of Business
Case!
•  Identify major components, areas of work!
•  Provide rough effort estimates!
•  Follow-up actions"
•  Area Product Owner revises, completes Business Case!

27"27
•  Purpose: Rank pending Initiatives, assess in-ﬂight Initiatives!
•  Portfolio Owner facilitates!
•  When: 2—4 hours per month!
•  Who: Portfolio Owner, Area Product Owners, Program Manager"
Agenda"
For each new Business Case (BC)!
1.  Area Product Owner reads BC to group!
2.  All discuss, ask Area Product Owner to clarify details!
3.  Portfolio Owner may adjust value-related factors (not effort)!
4.  Portfolio Owner adds BC to Portfolio Backlog, ranks via Decision
Matrix!
5.  Program Managers advise on timing of Initiatives!
•  For in-ﬂight Initiatives!
1.  All discuss status, possible changes!
2.  Portfolio Owner decides to continue, revise, or cancel!
Portfolio Planning Meeting"

28"28
Summary of Recipes"
When Participants Decisions & Actions
Portfolio
Grooming
Meeting
Area & Team Product
Owners, Program
Manager, Tech Leads
Team Product Owners, Tech Leads,
Program Manager give feedback on
Business Case. Program Manager &
Tech Leads estimate effort.
Business Case
Completion
Area Product Owner Area Product Owner ensures
Business Case satisfies Definition of
Done prior to Portfolio Planning.
Portfolio
Planning
Meeting
Portfolio Owner, Area
Product Owners,
Program Managers
All discuss Business Cases. Portfolio
Owner ranks Business Cases via
decision matrix, decides what to do
with in-flight Initiatives based on
status information and business
needs.

29"29
Which Agile Governance 
Principles are Used?"
All of them!"
"
1.  Standardization of Recipe Elements"
2.  Common Role Types"
3.  Categories of Governance Points"
4.  “Good Enough” is Good Enough"
5.  Granularity"
6.  Deﬁnition of Done"
7.  Handoffs"
Download “Recipes for Agile Governance: The Enterprise Web” !

30"30
Conclusion"
•  Portfolio-level governance is about"
•  Deciding which Initiatives to undertake, and in what order!
•  Deciding whether to continue, modify, or cancel ongoing
Initiatives!
•  Portfolio governance can be conducted with"
•  Roles: Portfolio Owner, Area Product Owner, Program Manager!
•  Ceremonies: Portfolio Grooming, Portfolio Planning Meetings!
•  Artifacts: Business Case, Agile Charter!
•  Tracking and Metrics: Burn-Up Chart!
•  Key insights"
•  Evaluate ROI as ratio of weighted sums of value- and effort-
related factors!
•  Estimate factors with coarse-grained relative scale!

31"31
Coming Up: 
More Practical Recipes 
for Different Worlds"
•  Our follow-up presentations will provide more
examples of practical recipes for speciﬁc
situations:"
ü  Program Governance for Application Development!
ü  Program Governance for Production Deployment!
ü  Project Governance for Distributed Scrum Teams!

32"32
Question & Answer

Intro to agile portfolio governance v6

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