An executive once told me that they wanted to implement SAFe because it offered a solution at the portfolio level. Anyone with experience of Scaled Agile will know that the SAFe solution is a failure state rather than a target state for most organisations. Whether they tell you or not depends on whether they are in the community of solutions or the community of needs.
The fundamental problem with most IT portfolios is that they are based on budget/funding. A large pot of money is assigned to be spent on IT. This pot of money is broken down into a number of investment pots that are known as portfolios.
This is fundamentally the wrong way to think about the portfolio. When portfolios are constructed in this way, there are normally capabilities that exist in more than one portfolio. In this case, team 1 is needed in both portfolios. Normally team 1 would exist in one portfolio, and be managed as a dependency by the other portfolio. This means that it is possible for the organisation to have a sub-optimal portfolio if “Team 1” is a constraint. There are two solutions. The first solution is to ensure that “Team 1” has adequate capacity to ensure that it is never a constraint. Given that capabilities needed across portfolios are often “shared resources” that are centralised in order to minimise costs, this is unlikely.
The second solution is to construct the portfolio based on shared capabilities. All investments (I have named them Epics here), that are linked by shared resources are managed together in the same portfolio. That way, the business investors can come together to construct a portfolio that optimises business value according to the organisations vision and strategy.
As time progresses, the organisation might identify additional resources that need to be managed in the portfolio as they become constraints. These constrained resources may be funding, visas, shipping capacity, physical space, or any other resource that is constrained.
In summary, construct your portfolio based on shared capability rather than funding, and regardless of organisational divisions. Managing dependencies is a recipe for failure and leads to sub-optimal portfolios.
February 20th, 2019 at 5:15 am
[…] What is a portfolio in Scaled Agile? Written by: Chris Matts […]