Portfolio Management Execution with Shorter Wait Time
Figure 5.2.3 Example of Waiting time vs Throughput Time.
In the example above, when Minimizing the Wait Time approach is used, all projects are started the same time and concluded within 8 months with a total of 6 months of benefit consumption.
The second approach, Minimizing the Throughput Time, suggests concentrating on only one project at a time, and then finishing it as fast as possible before starting a new one.
Even if in both cases all projects will be finished within 8months, the lean strategy (2) improves flow efficiency and performs better as the benefit realization starts much earlier resulting a total of 15 months of benefits consumption instead of 6 months.
Although a bit simplified (e.g. not considering the individual skills of assigned FTEs), the example gives an idea what can be gained with a Throughput Time Minimization approach. In order to run projects successfully with this approach a change in mindset is needed in the following two levels:
- The Portfolio Steering level has to have the courage to make bold prioritization decisions between development initiatives and stick with the prioritization order in the implementation.
- The execution level needs to build the project-based team work capability within self-directed groups that have adopted an agile working methodology.
Project State Indicator
Project State Indicator gives an overview of the current situation of the projects in a portfolio. The idea is to be able to see the situation of all projects at one glance. Projects are listed and followed by the categorization columns indicating the different impacts on the projects. The colors green, yellow and red give the status of a particular project. The up and down triangles indicate the state of change from last report: upwards for better and downwards for worse. Arrows indicate better (green, pointing up), same (grey, pointing right) and worse (red, pointing down).
Figure 5.2.4 Example of a Project Status Indicator for major project portfolio.
Project Classification Principles
During the classification process, the Portfolio Steering Group gives scores to the projects based on compliance with the classification criteria. Below (figure #) is an example list of a classification criteria. Criteria may vary depending on the company or portfolio size. Besides scoring, the Portfolio Steering can also give priorities to projects by addressing the business impact. For example, in some cases it is enough for a project to qualify as major based on its business impact, even if only one criteria is met.
Figure 5.2.5 Example of Project Classification Criteria.