Portfolio Management - Figuring Out How to Say When and Why
- 1. Portfolio Management Figuring Out How to Say When and Why
- 2. What is Portfolio Management, and Why Should I Care? Levels of Planning Strategic Vision Roadmap Release Tactical Iteration Daily Clip from Powers of Ten (1968), by Charles and Ray Eames, distributed by YouTube
- 3. What Happens If You Don’t Deal With Portfolio Management? Johanna Rothman. March 2011. Manage Your Project Por4olio, The PragmaGc Programmer, LLC. Page 31.
- 4. How Proper Portfolio Management Helps The Organization. Johanna Rothman. March 2011. Manage Your Project Por4olio, The PragmaGc Programmer, LLC. Page 30.
- 5. Definitions of Terms Product Line Product Project Roadmap Waypoint Release Plan Clip from Mechanical Principles (1930), by Ralph Steiner, distributed by YouTube
- 6. The Difference Between Roadmapping and Release Planning Roadmap Plans Product and features driving pro ts over time Marketing may have tendency to state dates with “wish and desire” Does not take all development realities and matrix effects into account Release Plans Technical realities force dates Need to address dependency issues and matrix issues
- 7. Good Planning is Relaxation On A System of Constraints Constraints Faced Risk tolerance Resources Uncertainties Need to perform and meet unreasonable expectations These constraints form the boundaries on an acceptable solution. One needs Agile honesty and transparency to understand and then relax the constraints to allow for an acceptable solution.
- 8. Justifying a Product Backlog Ordering Strict Scrutiny Test Extremely exacting – can you prove beyond all reasonable doubt? Rational Basis Test Low level of scrutiny – can you come up with some story that isn’t certi ably insane? Factors Used in Backlog Ordering Bene t Cost Risk
- 9. Das Kapital – An Unlikely Source For Roadmapping Guidance What It Is: Discounting method Cash ows in and out, i.e. quanti cations of bene ts, costs, and risks Computes the “time value” of money Why We Do It: Compare one long term project against another Allows us to see which alternative is the “best investment” for our money But stay Agile Don’t go nuts with the numbers. There are already huge guesstimates in the assumptions! Use SWAGs if necessary. Use rational basis, not strict scrutiny, in assessing level of con dence for roadmapping.
- 10. The Role of Risk Mitigation in a Successful Product Risk Categories Business Market Resource Dependency Analysis Technical Clip from Toncon9n Landing Over Road (2009), by obatala38, distributed by YouTube
- 11. The Perfect Product Roadmap Messed Up By The Usual Suspects Clip from The Usual Suspects (1995), by Bryan Singer, distributed by MGM Studios
- 12. The Moves To Portfolio Management 1. Create a business value based roadmap based on NPV to create an idealized roadmap. 2. Create a release plan that utilizes resources in the most efficient fashion to match the roadmap desires (make sure that you account for date constraints from non- team dependencies, too!) 3. Rinse, wash, and repeat 1 & 2 until mutually acceptable roadmaps and release plans can be agreed upon. 4. Conduct a Portfolio Management Update Review once a month to take new realities from the market as well as team progress based on velocity metrics into account.
- 13. Split Into Teams and Start the Workshop (10 Minutes)
- 14. Introduction to Today’s Exercise – The Company Location, Location, Location Software Solutions LLLSS builds location based software solutions by creating GPS hardware, associated embedded software, and application software for mobile (iOS, Android, BlackBerry OS, Windows Mobile) and web platforms. Product lines in automotive, pedestrian, aviation, and seafaring spaces, for consumer and industrial seings. 3 mobile app development teams 4 hardware development teams 1 embedded software development team 2 web app development teams
- 15. Introduction to Today’s Exercise – Product #1 I Shop Therefore I Exist Augmented Reality Glasses Vision: For the mobile consumer Who is cruising around and looking for shopping opportunities The “I Shop, Therefore I Exist Augmented Reality Glasses” product is a mobile product locator That points out places along a GPS driving route for purchasing opportunities that will be of interest and intrigue to the driver Unlike products such as Google Maps Our product projects driver purchase interests directly in a heads up display situated in fashionable goggles right along with the turn guidance of the main GPS system. ISTIEARG avoids confusing sensory overload in crowded urban situations by using head and eye tracking detectors, to ensure the timely updating of only those targeted businesses that match both the gaze and shopping interests of the drivers.
- 16. Introduction to Today’s Exercise – Product #1 I Shop Therefore I Exist Augmented Reality Glasses Future Ideas: One follow on product is targeted at the 35-65 years old tourist crowd, to point out local points of interest along the route. Another targets the 21-35 year old male demographic. This version has night light ampli cation technology as well as adult themed shopping content. Market Potential: First year, $15M in primary sales, $10M in advertising buy-ins. Second and third year, assume near 2nd order polynomial, tapering after market saturation Risks Identi ed: Engineering costs, safety factors, potential regulatory issues due to privacy concerns 1st Order Development Estimates: Mobile Apps none Embedded Software 2 team quarters Hardware 4 team quarters Web Apps 2 team quarters (data sources)
- 17. Introduction to Today’s Exercise – Product #2 King of the Road Vision: For the Surabu STi road rallying enthusiast Who wants to demonstrate their alpha maleness The “King Of The Road” entertainment system is an overpriced option to the Subaru built-in GPS offering that allows enthusiasts to select and download preplanned rally routes to their GPS. The driver can then drive the course and have their results automatically posted in this nationwide dare to drive game Unlike traditional road rally events Our product does not require time consuming and expensive rally clubs to facilitate the time trials, due to the “catch us if you can” aitude of the automated service.
- 18. Introduction to Today’s Exercise – Product #2 King of the Road Market Potential: Unclear. Subaru currently sells 2K in-car GPS units per year on STi vehicles. They claim that their consumers are price elastic, but we do not understand either the amount that the price can be stretched, nor the costs on our side to run the website. On the other hand, we would gain intangibles within the rally community that we might exploit on future offerings. We can always sell our data to cash strapped departments of transportation for a documentation fee! Risks Identi ed: Subaru claims that it will take them 2 years to integrate into their units. Right now, this is a rst to market feature, but in 2 years, many PNDs will have similar features for free on enthusiasts websites. Legal informs us that we may face lawsuits from police departments for encouraging speeding on the public roads. 1st Order Development Estimates: Mobile Apps 3 team quarters Embedded Software 1 team quarter Hardware 2 team quarters Web Apps 6 team quarters
- 19. Introduction to Today’s Exercise – Product #3 Trust-Me-Nots Vision: For creepy guys everywhere Who don’t trust their signi cant others when they are out of sight The “Trust-Me-Nots” brand of undergarments is an aractive set of lingerie with a built-in miniature GPS and 3G radio (housed in an aached locket) which allows tracking at a distance in real time Unlike the traditional chastity belt Our product gives the illusion of love and trust by presentation of the aractive box set of intimates, yet provides real-time intelligence to the interested party for tracking purposes.
- 20. Introduction to Today’s Exercise – Product #3 Trust-Me-Nots Market Potential: We’ll get no money on the lingerie version of this. Just bad press. But we would never be able to buy that much advertising, to get our name out. Risks Identi ed: Engineering risks and excessive costs. Device must be ready 4 months before Valentine’s Day, as this seems to be the biggest selling season. Potential FDA designation as a medical device would put us into a long term regulatory nightmare. Potential liability of estranged girlfriends, who may have litigious propensities based on their loss of privacy concerns. 1st Order Development Estimates: Mobile Apps 6 team quarters Embedded Software 1 team quarter Hardware 4 team quarters Web Apps 3 team quarters
- 21. Introduction to Today’s Exercise – Product #4 Way To Go! Vision: For the busy business traveler Who uses our standard navigation products The “Way To Go!” product is a GPS based driving guidance solution That uses the real time location, time of day, velocity of the entire eet using our products, and historical data, to provide an optimized driving experience Unlike other GPS driving guidance systems Our product, an extra cost option on top of our standard applications, gets the driver to their destination more quickly, by routing the vehicle around traffic problems as they develop.
- 22. Introduction to Today’s Exercise – Product #4 Way To Go! Future Ideas: This product probably has no extended market future. This feature set is rapidly facing commodi cation. Market Potential: At $5 per day for this service, we anticipate revenues of $15M per year for the rst 2 years of operation if we can be rst to market on this. After those rst 2 years, our rates will have to go down, and although we will aract signi cantly more customers, we anticipate only $5M for the remaining 2 years of anticipated useful produce life. However, since we will be collecting data from all users, we will be able to enhance the accuracy of all products, yielding a $10M bonus from that. Risks Identi ed: Potential regulatory issues due to privacy concerns 1st Order Development Estimates: Mobile Apps none Embedded Software 1 team quarter Hardware none Web Apps none
- 23. Introduction to Today’s Exercise – Product #5 Paint By Cars Vision: For the “Engadget or Droid” family Who’s ready for a day of fun The “Paint By Cars” product is a web based painting application That allows the car to draw the lines and the family to ll in the colors for pictures outlined over the course of a day’s driving Unlike products such as traditional Paint By Number kits, or even web based Paint By Numbers Online offerings, Our product uses the car to draw the lines using either preplanned web based routes downloadable to the GPS device to suggest pictures to use, or allows for complete “free hand” expression, so even the most artistically challenged families can create masterpieces on their rst aempt.
- 24. Introduction to Today’s Exercise – Product #5 Paint By Cars Market Potential: Probably zero. But we gain intangible reputation assets for being a cool company, so people might actually buy something else from us. This has been quanti ed at $10M for 2 years. Risks Identi ed: None. 1st Order Development Estimates: Mobile Apps 6 team quarters Hardware none Embedded Software 1 team quarter Web Apps 2 team quarters
- 25. Introduction to Today’s Exercise – Product #6 MapMaker Vision: For map data providers, such as NavTeq Who are looking for beer quality maps to sell to their customers The “MapMaker” product is a road nding and validating service running invisibly on all of our automotive navigation products that makes beer GPS road map data available by tracking every car motion and matching against the current road map data. As mismatches are found, the data is sent through a data connection to a central data server for analysis and new road discovery. Unlike competing smartphone crowd sourced solutions such as Waze Our product uses the superior GPS hardware of the LLLSS, augmented by powerful backend applications and those human eyes and brains monitoring and analyzing the backend system to provide a world class database.
- 26. Introduction to Today’s Exercise – Product #6 MapMaker Market Potential: A steady $12M per year. Risks Identi ed: We are unsure exactly how we are going to process the data anomalies at the present time. Automation may be of use, but we may need teams of analysis people to work the data. NavTeq tells us that they need will need 1 month to Incorporate our feed into their system. 1st Order Development Estimates: Mobile Apps none Embedded Software ½ team quarter Hardware none Web Apps ½ team quarter (for backend work)
- 27. Create Waypoint Summaries and Form Initial Roadmaps (30 Minutes) Normally need some form of a spike to gain necessary product and/or project knowledge. This should occur with an initial product backlog containing a few epic user stories. Bene ts section done primarily by Product Owner. Cost section done primarily by Delivery Team. Risk section is a joint effort. These are estimates, folks, not exactimates! Initial idealized roadmaps assume no matrixing between projects. In other words, pay aention to the product value (bene ts/costs/ risks) waypoints (such as product introduction at trade shows), but not the time of development.
- 28. Create Waypoint Summaries and Form Initial Roadmaps Assumptions That I Used In My Analysis. General Assumptions NPV Discount Rate 5% per annum Mobile App Labor Rate $150 per hour Hardware Dev Labor Rate $200 per hour Embedded Software Labor Rate $175 per hour Web App Labor Rate $100 per hour Team Size 7 people per team Hours Per Quarter 500 Mobile App Teams 3 Hardware Dev Teams 4 Embedded Software Teams 1 Web App Teams 2 You may use other assumptions.
- 29. Create Waypoint Summaries and Form Initial Roadmaps My Results. “I Shop Therefore I Exist Augmented Reality Glasses”
- 30. Create Waypoint Summaries and Form Initial Roadmaps My Results. “King of the Road”
- 31. Create Waypoint Summaries and Form Initial Roadmaps My Results. “Trust-Me-Nots”
- 32. Create Waypoint Summaries and Form Initial Roadmaps My Results. “Way To Go!”
- 33. Create Waypoint Summaries and Form Initial Roadmaps My Results. “Paint By Cars”
- 34. Create Waypoint Summaries and Form Initial Roadmaps My Results. “MapMaker”
- 35. Create Waypoint Summaries and Form Initial Roadmaps Product Backlog Ordered By NPV Initial Order Forecast Business Value ISTIEARG $31,735,379 King of the Road $5,312,091 Trust-Me-Nots $5,241,757 Way To Go! $19,301,386 Paint By Car $7,569,820 Map Maker $16,996,426 Ordered By NPV Forecast Business Value ISTIEARG $31,735,379 Way To Go! $19,301,386 Map Maker $16,996,426 Paint By Car $7,569,820 Trust-Me-Nots $5,241,757 King of the Road $5,312,091 We can safely forget about the last two products, as we make more money by not making them! Don’t forget about the coordination constraints on products (this turns out to not be an issue for this example).
- 36. Create Waypoint Summaries and Form Initial Roadmaps My Idealized Roadmap 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 5th Quarter 6th Quarter 7th Quarter 8th Quarter ISTIEARG $5,162,500 $7,525,000 $7,227,570 $5,719,008 $1,321,726 $15,121,437 $30,592,160 $40,998,790 Way To Go! $612,500 $226,250 $3,015,000 $6,803,750 $13,592,500 $16,681,250 $19,570,000 MapMaker $1,018,750 $3,931,250 $6,843,750 $9,756,250 $12,668,750 $15,581,250 Paint By Cars $2,537,500 $4,208,750 $1,962,500 $283,750 $2,530,000 $4,776,250
- 37. Overlay Initial Roadmaps With Development Realities (20 Minutes) The hard part is keeping track of resource estimates over time for matrixed organizations - good luck with that! J Sometimes, the best planning tool for this is Microsoft Project, done with “one bar per release”, and utilizing resources as an aggregate. There is nothing wrong planning to the appropriate level with Project and staying within an Agile mindset. But, if you start tracking against that plan, I’m going to have to hurt you! Even beer is a quick way to visualize your resources over time. Remember: We only need a rational basis to justify our plans we are not in a court of law. Things will change. Deal with change in Portfolio Management Update Sessions.
- 38. Overlay Initial Roadmaps With Development Realities My Method to Visualize Roadmap and Resources Over Time
- 39. Iterate on Initial Roadmap With Development Realities An Improved Roadmap, Perhaps? 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 5th Quarter 6th Quarter 7th Quarter 8th Quarter MapMaker $1,018,750 $3,931,250 $6,843,750 $9,756,250 $12,668,750 $15,581,250 $18,493,750 $21,406,250 Way To Go! $612,500 $226,250 $3,015,000 $6,803,750 $13,592,500 $16,681,250 $19,570,000 $22,258,750 Paint By Cars $2,537,500 $4,208,750 $1,962,500 $283,750 $2,530,000 $4,776,250 $6,996,250 ISTIEARG $5,162,500 $7,525,000 $7,227,570 $5,719,008 $1,321,726
- 40. Describe and Discuss Results Within Each Team
- 41. Retrospective on the Process (10 Minutes)
- 42. Fin
- 43. Portfolio Management Figuring Out How to Say When and Why