This document discusses how to build strategic portfolio management maturity. It recommends establishing a planning structure to assess investments and ensure alignment with business strategy. Measurement competencies should use customer data and outcome-based metrics to influence decisions. Continuous planning focuses on outcomes through objectives and key results that cascade alignment. Process competencies optimize portfolio management and use agile resource planning. Governance transitions from projects to product-based funding with business unit accountability. The most mature approach supports product teams through continuous portfolio management that robustly optimizes investments.

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How to Build Your
Strategic Portfolio
Management
Maturity
A KeyedIn Hosted Webinar featuring

2. How to Build Your
Strategic Portfolio
Management Maturity
Margo Visitacion
VP/Principal Analyst

3. State of Customer Obsessed
Organizations

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Business Priorities and Tech Adoption Priorities

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Priorities and Challenges for Digital and Software
Leaders
Digital Leaders:
• 41% want to improve IT systems to support new digital technologies
• 30% want to create more smart and digitally aware/connected products and services
• 28% want to define clear and quantifiable metrics for measuring the success of their digital
strategy
Software Leaders
• 30% cite that budget is their biggest software challenge
• 28% note that their current systems are too inflexible
Source: 2019 Priorities & Journey Survey and 2018 Software Survey

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Software Budget Distribution Challenges Funding

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CEOs Signal Caution
2019 PWC CEO survey
2018 CEO attitudes
• 52% very confident in revenue growth
• 95% plan organic growth
• 69% plan M&A
• 59% target cost reduction
• 12% plan to outsource
2019 CEO attitudes
• 32% extremely concerned about availability of qualified workers
• 46% somewhat concerned
• 35% confident of revenue growth
• 29% believe that global growth will decline (vs. 5% in 2018)
• 41% decrease in CEO’s seeing US as top growth market

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Customer Obsessed Operating Model
Influence Ability

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Traditional Planning Doesn’t Support Business Agility

10. How can you build your
strategic portfolio
management maturity?

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Expanding Structure and Measurement Competencies
Structure
• Execs have articulated and communicated corporate vision
• Company has implemented a planning structure to assess
applications, technology and investments to measure alignment
• Product and program investments are aligned with strategy
• People and money are adequately assigned based upon
alignment

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Benchmark Your
Structure
Our organization has executive support of the
vision for a customer obsessed operating model.
Our organization has a planning organization
dedicated to the enrichment and betterment of
apps and technologies.
Our organization has aligned goals and
strategically allocated budgets.

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Expanding Structure and Measurement Competencies
Structure
• Execs have articulated and communicated corporate vision
• Company has implemented a planning structure to assess applications, technology and
investments to measure alignment
• Product and program investments are aligned with strategy
• People and money are adequately assigned based upon alignment
Measurement
• Performance measures are outcome based and aligned
• Measures are rooted in empirical evidence
• Customer data is used to influence decision making
• Outcome measures are used to influence future investment
• Necessary data is always easily accessible

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Benchmark Your
Measurement
Our organization leverages real time insights to
make portfolio decisions.
Our organization uses customer demand
analytics to make strategic decisions.
Our organization has clear benefits realization
that improve selection and prioritization of
investments.

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Continuous Planning Focuses on Outcomes

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Aligned Measures: Objectives & Key Results
Purpose
• Defines and tracks objectives and their outcomes
• Brings focus to efforts to make measureable contributions
• Highly visible
• Useful at the organization, team and individual level
• Powerful tool for continuous improvement
Effective Goal System
• Improves on S.M.A.R.T goal
• Break up goals and objectives into smaller steps
• Cascades alignment and traceability
• Set quarterly and measured in 12 check-ins (at least!)
• Stretch goals
• Collective organizational wisdom – 70% bottom up alignment
• Transparent and accountable

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Sample:
Improve market
presence through
new products
Sales
Expand sales in
current markets by
25%
% net new
customers in
existing markets
Product
management
Launch new mobile
product by 2018
% successfully
delivered features
Marketing
Increase marketing
campaigns per
advertiser from 2 to
5
% Lead to close
conversions
Objective
Organization Key Results KPI

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Expanding Process and Governance Competencies
Process
• Portfolio management processes that support products, programs and
services
• Optimization practices that support continuous planning with the ability to
pivot based on customer or market conditions
• Resource capacity planning that supports Agile, hybrid and traditional
planning practices
• An ecosystem of planning and delivery tools to support end to end
lifecycle management

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Benchmark Your
Process
Our organization optimizes portfolio management
for quick and proactive responsive analysis.
Our organization has portfolio management
automation in place to optimize and monitor
performance.
Our organization understands the importance of
agility when it comes to resource management
and adapting to changing demands.

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Expanding Process and Governance Competencies
Process
• Portfolio management processes that support products, programs and services
• Optimization practices that support continuous planning with the ability to pivot based on
customer or market conditions
• Resource capacity planning that supports Agile, hybrid and traditional planning practices
• An ecosystem of planning and delivery tools to support end to end lifecycle
management
Governance
• Organize by product/program with formal management structures
• Employ Lean/Agile funding along side of traditional planning
• Business unit self funding and self accounting for technology investments

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Benchmark Your
Governance
Our organization has embraced the transition
from functional groups to product teams to
optimize delivery.
Our organization uses product-based or value
stream based funding instead of annual project-
based funding.
Our organization has clear visibility of delivery
empowering leaders to invest in technology when
they need to.

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Beginner
Your organization still operates on an annual departmental project-based planning
structure. A committee is in charge of funding for projects and decisions based on
requirements, estimates and plans. Portfolio progress is measured only by cost and
scheduled to be reviews on a quarterly basis. Any changes to budgets require
executive level approval and often are very difficult.
Intermediate
Your organization uses project-based funding, but embrace strategic products and programs to
continuously plan and create product-based funding decisions with guidance by line of business
executives. Portfolio reviews are held on a regular basis, but are a mixture of cost and value-based
criteria.
Advanced
Your organization operates under an agile, product-based portfolio
planning model that supports investment in products and capabilities.
Your company embraces strategic planning while funding and prioritizing
product and capability-based teams. Performance is measured based on
value driven delivery with an emphasis on efficiency and effectiveness.
Building Strategic Portfolio Management Maturity

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Organize by Product/Program Teams
• Developers
• Product Owner
• Testers
• Scrum Master
UX Designer
Designer
Architects
Product
Manager
Release Train
Engineer
Executive
Sponsor
Agile
Coach
Product

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Source: ADP and Forrester Research
Working in Shared Services Environment
Senior Product/ Program
Owner
Development Leader
Architect/UX Leader
Scrum Master
DevOps Arch/Dev Scurity
t
t
Shared Services
Scrum
Squads
Planning Teams
UX
Portfolio
Mgmt

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PMOs Provide Support with Prioritization, Dependency Management

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Continuous Portfolio Management Becomes Key
Demand Mgmt Prioritize/Capacity
Value Stream
Performance/Execution

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Source: “The Agile Planning Ecosystem Takes Center Stage” Forrester report
Continuous Portfolio Cadence Supports Robust Optimization Analysis
Product

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Transitioning Budgets to Product Oriented Planning

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Recommendations
• Pick the right catalyst for transformation – pick for value
• Value organizations, individuals and interactions over process fidelity
• Celebrate wins and learn from losses

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Thank You.
Margo Visitacion
VP/Principal Analyst, Forrester
mvisitacion@forrester.com