This webinar will provide guidance on effective ways to conduct Portfolio Management, using our concepts of Agile Governance to simplify and expedite the key decisions. These techniques can applied for Agile, hybrid, and classic plan-driven processes.

1. Kevin Thompson, PhD, PMP, ACP, CSP, CSM
The leader in training and consulting for project management and agile development
Introduction to
Agile Portfolio Governance

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New at cPrime
Comprehensive Portfolio Management Solutions
Our Portfolio Kickstart Package includes all of the following – each can also
be utilized separately.
• Portfolio Assessment and Planning - An Agile Solution Architect
configures scaling backlog and Portfolio solution to optimize your
organizational structure and culture
• Portfolio Training –This course focuses on how to develop Portfolios of
business initiatives.
• Portfolio Coaching – Experienced Enterprise Agile Solution Architect
works with your organization to define Portfolio Processes.
• Portfolio Software Integration – We use a complex configuration of Agile
software including Innotas and JIRA solutions to support the Portfolio
processes put in place by our Agile Architects.
© 2013, cPrime Inc. All

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Who is cPrime?
ENGAGED FOR YOUR SUCCESS

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RAGE is…
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Portfolio Management is…
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Before we dive in. Tell us a little about you
• What Portfolio Management Topic interests you
most?
• What is your role?
• How would you rate your knowledge of Agile
Portfolio Management?

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After the webinar…
• We will send directions to collect the PDU you will
earn from attending this webinar
• We will also send a links to the recorded webinar
and presentation slides once they are posted online
For more information, visit www.cprime.com

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About Our Presenter
Kevin Thompson, Ph.D., has a doctorate in Physics from
Princeton University, and extensive background in
managing software development projects. He specializes
in training individuals, teams, and organizations in agile
development. Dr. Thompson helps companies make the
challenging transition to agile development by working
with development teams and business stakeholders to
identify their needs, define the right process for the
business, determine the steps needed to implement the
process, and work through the steps successfully. Dr.
Thompson has Project Management Professional (PMP),
Agile Certified Practitioner (ACP), Scrum Master (CSM),
and Scrum Practitioner (CSP) certifications.
Kevin Thompson

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What will You Learn Today?
• Basic recipes for Agile Portfolio Management
• How to develop business cases
• How to estimate ROI
• How to make portfolio decisions
• How to evaluate Initiative status
• This approach incorporates Principles of Agile
Governance
• Download “Recipes for Agile Governance: The Enterprise Web”
from www.cprime.com for much more detail

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Review: Agile Governance
Governance: The formalization and exercise of
repeatable decision-making practices
• Governance = how to decide what to do
• Agile Governance is an Agile style of governance
• Enables rapid decisions, based on lightweight artifacts
developed with minimum effort
• Applicable to any process (Agile, Plan-Driven, Hybrid, etc.)
Governance Recipe: A mildly prescriptive and
customizable technique for making a specific type
of decision

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Review: Levels of Governance
• Classic perspective
• Project: Temporary endeavor to deliver a fixed scope
• Program: Collection of linked projects
• Portfolio: Group of Programs/Projects to be managed together
• Classic definitions don’t map well to Agile world, but…
• Hierarchical organization is still relevant.
• Our levels for Agile Governance
• Project Level: Refers to work of a single Team, which is a persistent
grouping of people
• Program Level: Refers to the collaboration between Teams
• Portfolio Level: Refers to the development and management of
business Initiatives that lead to program- and project-level work

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Levels of Governance

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Portfolio Governance Defined
• We define Portfolio Governance to be about
• Deciding which Initiatives to undertake, and in what order
• Deciding whether to continue, modify, or cancel ongoing
Initiatives
• We will examine how to make these decisions
quickly and effectively

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Portfolio Governance Summary
• The Area Product Owner provides draft Business Cases for review
in Portfolio Grooming Meetings. Program Managers, technical leads
estimate effort and give feedback.
• A Portfolio Planning Team, consisting of Portfolio Owner, Area
Product Owners, and others, defines and manages the Portfolio.
• The Portfolio Owner works with the Portfolio Planning Team in
Portfolio Planning Meetings to approve, reject, and schedule
Initiatives for implementation
• The Portfolio Owner works the Portfolio Planning Team in Portfolio
Review Meetings to assess what to do with in-flight Initiatives,
based on their value and status
• The Portfolio Planning Team conducts Retrospectives to ensure
improvement over time

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The Initiative and its Business Case
A Business Case is a document that
• Describes the concept and scope of an Initiative
• Presents information needed to make decisions about whether or
when to execute the Initiative
• Decision factors: Value, Return on Investment, Cost, etc.
A Business Case should be brief
• Purpose is to enable decision-making, not provide comprehensive
requirements
• Try to get it on one page
There is no standard format for a Business Case!
• Use any that suits your needs
• Incorporate Description, Acceptance Criteria, Decision Factors

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Example: Description
Title
Upgrade embedded Agents to V2
Description
Each networked medical device contains an Agent program that
communicates with remote Administration and Reporting workstations. The
large volume of network traffic produced by the Agents in our devices means
that no more than fifty devices can be on one network. The upgrade will
allow at least 500 devices to share the same network, by using a longer,
customizable polling interval, and richer XML-based message formats.

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Example: Acceptance Criteria
Success Criteria
1. System works with at least 500 active devices, 50 monitors, and 5
administrative stations on one local area network
2. Upgraded monitor and admin stations support mix of V2 and earlier
Agents in networked devices
3. SysAdmin can set new parameters (polling intervals, logging levels,
content of device reports)
4. Agent connection time < 30 seconds after restarts (is now 3 minutes)
5. All 32 device types must have this upgrade

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Return on Investment
• ROI is key driver for investment decisions
• ROI =
𝑅
𝐼
• R = Return (some measure of value)
• I = Investment (some measure of cost)
• The larger ROI, the greater the benefit for our
investment
• The challenge is in estimating R and I

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How to Estimate ROI
Steps are easy to understand
1. Estimate the Return
1. Total revenues from Initiative
2. Net Present Value
3. Etc.
2. Estimate the Investment
1. Effort
2. Cost
3. Compute ratio
Sadly, this is not usually possible

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Understand the Limits
of what is Possible
• The Return is composed of many factors
• The Investment is composed of many factors
• Limitations
• All factors are highly uncertain
• No factors can be estimated reliably
• Most factors cannot be tied to real-world numbers
• What is achievable—and sufficient
• Understand whether ROI is better or worse for different Initiatives
• Express Return as weighted sum of standard factors
• Express Investment as weighted sum of standard factors
• Define common scale for factors based on relative values

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Example ROI Calculation
1. Select Return factors
• Value-related items
• NPV is often WAG
2. Select Investment factors
• Cost-related items
3. Select weights for factors
• Range: 0—1
4. Select finite Rating scale
for factors
Weight
1.0
0.5
1.0
Weight
1.0
1.0
Return Factor
Net Present Value
Urgency
Regulatory Compliance
Investment Factor
Effort to implement
Technical Risk
Scale Values
Fibonacci 0,1,2,3,5,8
NPV=5, Urgency=3, Reg. Compliance = 1, Effort=8, Risk=1
𝑅𝑂𝐼 =
1 × 5 + 0.5 × 3 + 1 × 1
1 × 8 + 1 × 1
= 0.83
Example:

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Portfolio Backlog
• Items in Portfolio Backlog are Business Cases
• Items are ranked (sequenced) in order of decreasing ROI
• Analogous to Product Backlog in Scrum
• Do largest ROI items soonest
• Schedule for when bandwidth becomes available
• Minimize parallel Initiatives to maximize productivity

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Tracking and Metrics
Burn-Up Chart
• Per Initiative
• Per Release
Relationship between
Initiatives and Releases is
Many-to-Many
R1 R2 R3
I1
I2 I3

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Decisions about Ongoing Initiatives
1. Continue Initiative
• Assumptions valid, progress on track
2. Cut scope
• Assumptions valid, but won’t hit planned goals
3. Add scope
• Assumptions valid, but ahead of schedule
4. Change scope
• Value can be improved with scope changes
• Remove as much work as is added!
5. Cancel Initiative
• Changes in needs make planned value not worth pursuing,
compared to alternatives

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Roles
Area Product Owner
• Works with customers, stakeholders to define & prioritize user-facing
features
• Develops Business Cases for Initiatives
• Estimates value factors for Initiatives
• Works with Program Manager, others to get effort estimates
• Runs Portfolio Grooming Meeting
Portfolio Owner
• Authority over Initiative selection and
prioritization
• Reviews Business Cases
• Sets ranking of Initiatives
• Decides whether to continue, revise, or
terminate Initiatives in flight
• Runs Portfolio Planning Meeting
Program Manager
• Ensures cross-Team
collaboration is done well
• Facilitates effort estimation for
Initiatives
• Supplies Teams’ schedule,
capacity information needed
for Portfolio planning

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Portfolio Grooming Meeting
• Purpose
Ensure Business Cases are ready for next Portfolio Planning Meeting
• When: Bi-Weekly
• Who: Area Product Owner (facilitator), Team Product Owners,
Business Analysts, Program Managers, Architects, Tech Leads (Dev
& QA),…
• Agenda
• Attendees provide feedback to Area Product Owner on clarity, quality,
acceptance criteria, dependencies, ranking, risks of Business Cases
• Attendees identify major components, areas of work, “holes” (esp.
technical) to be addressed
• Follow-up actions
• APO revises Business Case
• Program Managers gets estimates of work for Initiative, supplies to Area
Product owner

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• Purpose:
Approve, Rank, and Schedule Initiatives
• When: Quarterly
• Who: Portfolio Owner (facilitator), Area Product Owners, Program
Managers, others as needed
• Agenda
The Portfolio Owner discusses new Business Cases with Area Product
Owners and Program Managers
1. Area Product Owners clarify details, benefits, investments, risks
2. Portfolio Owner may revise value-related factors (not effort)
3. Portfolio Owner decides which BC’s to add to Portfolio Backlog
4. Group uses tools (such as Decision Matrices) to guide ranking
5. Program Managers provide guidance about when new Initiatives
are likely to begin, based on current work status and Portfolio
Backlog ranking.
Portfolio Planning Meeting

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• Purpose:
Review progress, revise plans
• When: Monthly
• Who: Portfolio Owner (facilitator), Area Product Owners, Program
Managers, others as needed
• Agenda
• Area Product Owners present status of in-flight Initiatives
• All discuss benefits and drawbacks of continuing, revising
scope for, or terminating Initiatives
• The Portfolio Owner decides what to do with each Initiative
Portfolio Review Meeting

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Retrospective Meeting
• Purpose:
Learn from experience, and improve
• When: Between Portfolio Planning Meetings
• Who: Portfolio Owner (facilitator), Area Product Owners, Program
Managers, others as needed
• Portfolio Owner facilitates, records, enforces time box
• Say, 60 minutes total: 30 for recording, 30 for discussion
Agenda
1. Review status of work items from previous Retrospective
2. All participants describe
 What went well, that we should do again?
 What would we like to be better?
3. Specify follow-up actions
1. Prioritize improvements
2. Select top few to address
3. Select owners to drive improvements

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Which Agile Governance
Principles are Used?
All of them!
1. Standardization of Recipe Elements
2. Common Role Types
3. Categories of Governance Points
4. “Good Enough” is Good Enough
5. Granularity
6. Definition of Done
7. Handoffs
Download “Recipes for Agile Governance: The Enterprise Web”
from www.cprime.com for much more detail

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Conclusion
• Portfolio-level governance is about
• Deciding which Initiatives to undertake, and in what order
• Deciding whether to continue, modify, or cancel ongoing
Initiatives
• Portfolio governance can be conducted with
• Roles: Portfolio Owner, Area Product Owner, Program Manager
• Ceremonies: Portfolio Grooming, Portfolio Planning Meetings
• Artifacts: Business Case, Agile Charter
• Tracking and Metrics: Burn-Up Chart
• Key insights
• Evaluate ROI as ratio of weighted sums of value- and effort-
related factors
• Estimate factors with coarse-grained relative scale

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Question & Answer