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What is Lean Portfolio Management?
There are multiple portfolios in large organizations that need management to deliver value successfully. Lean Portfolio Management is a modern and strategic approach that helps organizations in managing portfolios and making sound decisions to deliver maximum value. The five principles of Lean are the foundation for LPM to coordinate strategy and execution across various domains. The five Lean Principles that are used by LPM are as follows:
Identify value
Map the value stream
Create Flow
Establish Pull
Continuous Improvement
Why is Lean Portfolio Management needed?
Many enterprises are adapting the Agile way for developing and managing projects for which they also need to adapt other modern approaches as well. Agile Transformation needs the enterprises to implement Lean-Agile values efficiently to get successful results. Many challenges are triggered throughout the process and it becomes really difficult to manage all the portfolios in the traditional way. LPM is the solution for all the challenges and also ensures that the work is carried out in a more systematic and organized way.Â
What are the dimensions of Lean Portfolio Management?
The whole Lean Portfolio Management framework is divided into three dimensions namely:Â
Strategy & Investment Funding- This dimension is all about using the financial resources to its fullest. It deals with strategizing usage, allocating funds and aligning the finances with the business objectives. The main responsibility of this dimension is Portfolio Prioritization but the others included in this stratum are as follows:Â
Aligning the portfolio and the enterprise objectives.Â
Maintain the vision of the portfolio.
Using Epics to realize portfolio vision.
Establishing Guardrails and Lean Budgets.
Establish Portfolio Flow.
Agile Portfolio Operations- This dimension deals with all the execution processes and it is all coordinated. This dimension needs active involvement of the critical roles like VMO, LACE, RTE(Release Train Engineer) and Scrum Master to empower solution trains. The responsibilities that are carried on this dimension are:
Coordinating Value Streams.
Creating an environment to foster Operational Excellence.
Supporting ART execution.
Lean Governance- A lot of factors affect the growth and progress of a project directly or indirectly. This is why Lean Governance helps to keep a check on compliance, expenditure, measurement, spending, auditing, reporting and security. Lean Governance serves the following purposes:
Forecasting and Budgeting according to changes.
Evaluating Portfolio performance.
Continuous coordination of compliance.
Which roles are involved in Lean Portfolio Management?
Each dimension has many functions and so there are many roles involved to get the work done. Here is the list of all the roles Lean Portfolio Management:
Strategy & Investment Funding
Enterprise Executives
Business Owners
Enterprise Architect
Agile Portfolio Operations
VMO/LACE
RTEÂ
Coaches CoP
Lean Governance
VMO
Business Owners
Enterprise Architect
How to master the Lean Portfolio Management Role?
Here are some of the strategies that can be adopted to master Lean Portfolio Management:
Clearly defining objectives- The primary responsibility of LPM is prioritizing portfolio for which the vision and objectives should be clear. The objectives are the blueprints for the execution of work to be done by the team.
Implementing Lean Governance efficiently- LPM empower teams by emphasizing on Lean Governance that helps to respond quickly to the changes and also helps to foster a culture of ownership.
Encouraging Value Stream Thinking- Value Streams make the management simple. LPM encourages Value Stream thinking to declutter the projects in order to focus on the big picture and eliminating the wastes for the process.
Embracing Lean-Agile Principles- LPM helps to embrace Lean-Agile principles in the process to increase the efficiency and also to adapt quickly to changing needs.
Use metrics and feedback- Metrics are very important to trace success of any project and also measure the performance. The feedback helps in making continuous improvement throughout.
Conclusion
LPM Certification gives all the necessary insights and use of tools to master management role. Acekube is a platform that offers this and many more certifications that help organizations to adapt the Agile way of working.
FAQs
What challenges might organizations face when adopting Lean Portfolio Management, and how can they overcome them?
The challenges faced while adopting Lean Portfolio Management are as follows:
Difficulties in understanding and accepting the functions of LPM.
Implementing LPM needs to eradicate silos to centralize decision-making. This may not settle down with everyone.
Lack of investment in business architecture will trigger problems in aligning with the objectives.
2. What are the typical steps involved in transitioning an organization to Lean Portfolio Management?
The typical steps involved in the transition of an organization to Lean Portfolio Management are as follows:
Establish strategic themes
Use value stream for funding, allocation and management.
Continuous planning.
Optimum utilization of resources.
Continuous delivery and reporting.
Implement Lean Governance.
3. What are the common misconceptions about Lean Portfolio Management, and how can they be addressed?
Lean Portfolio Management is a very strategic or modern approach for managing portfolios but it has some drawbacks as well:
LPM is not applicable to all the approaches.
It is not cost effective rather it is very expensive.
LPM practices may affect the work culture.
LPM may take away jobs of some roles that are no longer necessary for the process.