The reason why the applications and systems portfolio management methods do not fit more into the current business reality

(Antwerp, Belgium) I write to you from the city where the concept of logistics was reinvented over time, to talk about the management of systems portfolio and software requirements and how the most traditional methods are not consistent with the current reality.

The management of portfolio of applications and even components revolves around the optimization of resources and frequent adjustment to market and user feedback, reflecting the acceptance of the products and the uncertainty of the general contextual.

In this permanent alignment, one of the main issues is: How to better distribute the budget through the portfolio?

The problems that the traditional approach allows to identify are:

1. We do not consider all variables and the unpredictability of the context

  • Budget
  • Dimension and nature of all products/projects
  • Private and strategic priorities for business or products
  • Resource Availability
  • Change of executives and management strategies
  • Initiative or response of the competition, among other variables that cannot be predicted or contained.

2. The traditional process is long and heavy

Usually in traditional planning it starts with a year of antecedence. Ideas are gathered, and decisions are made based on business cases, full of suppositionsand assumptions. A business case is not the right method to select ideas or projects, given the high level of factual uncertainty and judgments of personal value, individual opinions of those involved in the development of the business case and have a personal interest in doing so happen or not.

A good business case requires effort and time to be created and the same applies to analyze the result:

  • Collect data;
  • Create/Modify Business case Template
  • Make assumptions
  • Create and justify the business model on the revenue side (increases project revenue, project cost savings) and cost side.
  • Prepare final analysis and recommendations.

If the effort to create the business case is very large, it can be found ways to make the process easier for its more rapida approval. The selection of projects, based on business cases generates waste: there is an effort investment to justify ideas that, once prioritized, will not have space in the budget or time possible.

So, how should we solve this dilemma? I recommend you the post: Portfolio management: How to collect and prioritize demand in a Lean and Agile approach?

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