2.6 Development Portfolio

Portfolio management ensures that organisations’ strategic intent is met in development. Initiatives with better strategic fit and higher business value are given priority.

Portfolio management includes the following duties:

• Defining rules and guidelines on how initiatives are evaluated and prioritised
• Maintaining a list of portfolio level development initiatives and their status
• Approving and rejecting development initiatives
• Introducing best practice for development and providing relevant coaching
• Supporting development streams in value creation and problem solving
• Resolving conflicts of interest or dependency problems
• Creating a good development culture and continuous learning
• Organising business value realisation measures and sharing lessons learned
• Providing executive level reporting and dashboard on portfolio status.

The full list of development initiatives, either pending, committed or rejected, represent the demand portfolio. Once the initiative gets approved by the portfolio steering, it proceeds to the development portfolio.

Figure 2.6.1 Portfolio management

The development portfolio provides the visibility and guidance necessary to maximise the business value of the development initiatives whilst minimising the administrative burden on those initiatives. This ensures the most efficient path for the release.

In order to maximise efficiency, the Business Technology Standard uses an approach called minimal viable governance that customises the portfolio management practices to suit the different types of initiatives. Whilst larger capability developments can follow a traditional gate-based approach, incremental initiatives and minor changes are usually handled in a dedicated self-managed workstream.

When an approved development initiative is put into the sequential track as a project, the development portfolio follows it until project closure and beyond in the realisation of business value.

Figure 2.6.2 Project portfolio steering

Development Management Office (DMO)

The development portfolio is coordinated by the Development Management Office (DMO). The DMO oversees the resourcing, dependencies and the performance of major development initiatives, while providing the required support and consultation in order to maximise business value creation and minimise risks. It facilitates the activities to validate and prioritise development initiatives to be approved or rejected by the development portfolio steering. The DMO also sets and promotes development practices for company-wide visibility and consistency.

In order to fulfil its responsibilities, it is critical that the DMO either has, or can call upon, the appropriate resources. The DMO represents the technology side of the organisation in addition to business and service stakeholders. In particular, senior representation is critical to making adequate prioritisation judgements and business benefit realisation assessments.

The portfolio steering group includes different stakeholders to cover all aspects of decision making including the following:

• Business: Evaluate the strategic value of the request for the business, as well as impact on revenue, customer experience, risks, etc. This perspective is represented by Business Information Officers (BIO) and Service Owners
• Finance: Assess the business case credibility and help secure funding for the development. This perspective is represented by Chief Financial Officer (CFO) or person with his/her mandate
• Architecture: Understand the impact of the request on the enterprise architecture model and if any changes are to be made. This perspective is represented by Chief Enterprise Architect
• Security: Assess if the request is compliant with the organisation security policies and evaluate potential security risks and threats related to the project. This perspective is represented by Chief Information Security Officer (CISO)
• Legal and regulatory: Assess the potential legal and regulatory implications and requirements. This perspective is represented by Business Technology Governance Officer (BTGO)
• Capability: Understand the development and operations skills required to deliver the request and operate once released into service and allocate resources and manage dependencies. This perspective is represented by Business Technology Portfolio Officer (BTPO), who is chairman of the steering group as well.

Most organisations hold a monthly portfolio steering group meeting, and in some rare occasions where the request impacts the company strategy, escalate decisions to the business technology steering group. In most organisations, programmes must be approved by the business technology steering group as well.

Value stream portfolio views

Value streams expect an end-to-end view on portfolios related to all development topics. Different value stream views and consolidated enterprise views use the same data and require a centralised portfolio management tool to share the same information efficiently and in an up-to-date manner.

Figure 2.6.3 Portfolio views

While portfolio steering focuses on major development topics only, the value stream stakeholders have interest to see full picture of all development topics including:

• The innovations and improvements that typically get an incremental approach, taking advantage of agile or DevOps practices to adjust and adapt along the way and realising value with interim releases
• The larger capability developments are likely to benefit from a more structured approach and can therefore be expected to mainly follow the sequential development route
• Particularly complex initiatives may need to be managed through a programme. A programme is usually initiated when the desired outcome requires a co-ordinated implementation of number of projects and other initiatives in order to achieve the intended business benefits. Although the programme provides a level of management and governance to its constituent initiatives, the programme itself still sits within the development portfolio and the DMO has the same responsibilities for it as it does to all other development initiatives.

The demand portfolio guidelines establish the optimal approach for any given initiative to follow the sequential, incremental or change channel as appropriate. The DMO is there to assist should the initiative need advice or if it needs to change channel.

Once any initiative is approved via the appropriate channel, the channel’s sub-portfolio applies the relevant minimal viable governance approach to ensure that the initiatives that can, and should, benefit from light-touch governance can proceed quickly through to deployment so the business can start to realise the value.

Business value realisation

Regardless of the approach taken, it is the responsibility of the development portfolio to track the ultimate business value realisation for all the initiatives. In this respect the DMO needs to track the initiatives well into the service delivery. This overlaps in timescale with the service portfolio but the two have different focuses during this timeframe: development portfolio on the business benefit realisation, and service portfolio on ensuring services are reliable and constantly fit for their business purpose.

Optimised throughput

A secondary key role of the DMO is to optimise the number of initiatives being undertaken at any given time. In a challenging business environment, it is essential to make prioritisation decisions that support value creation, and to resist the temptation to simultaneously initiate too many projects coming from the demand funnel. This optimised approach reduces the overall waiting time and shortens the business case realisation time.

Figure 2.6.4 Maximise throughput with selective resourcing