Ashutosh has over 18 yrs of exp. in managing business & IT teams. He holds a Bachelors degree in Electronics Engineering and a Masters degree in Information Systems.
In this lesson, we'll define lean portfolio management and explain how it uses lean thinking methodology to efficiently manage project portfolios and quickly deliver projects.
Lean Portfolio Management
Lean portfolio management (LPM) is the process of managing a program and product portfolios by applying the concept of lean thinking. This result-oriented approach delivers high-quality work by prioritizing and managing the work in the lean portfolio. It increases the speed of planning and reporting processes and eliminates the time-consuming governance.
Features of LPM include:
Prioritization of the most valuable and critical activities
Quick delivery of high-value work without interruptions
Task alignment with the company's objectives
Timely inspections and validation of work
Lean thinking is a methodology that's used to eliminate waste from activities, services, or processes in order to improve the efficiency and deliver more value to systems. For organizations to be successful in today's business world, it's imperative to focus on innovation and to adapt quickly to the changing demands of the business. Lean thinking helps to meet these changing business demands and speed up the decision-making process.
Every organization has a portfolio of projects that requires effective planning and management to maximize return on their investments. LPM uses lean thinking to manage a large project portfolio. It creates a project pipeline. The goal is to select tasks on a fast-flexible-flow basis that delivers maximum value to the organization.
Let's explore how lean thinking helps in managing a project.
It helps businesses focus on delivering the critical tasks first by minimizing work-in-progress and maintaining sustainable speed.
It addresses the risk associated with development activity by creating a feedback mechanism.
It directs businesses to choose a mix of small and large tasks from the pipeline to ensure essential tasks are being worked on all the time.
It helps businesses to prioritize tasks that deliver value to customers more quickly.
Purpose of LPM
The main purpose or benefits that lean portfolio management provide are:
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Organizations that follow the lean methodology are in sync with their business customers and know how to quickly deliver product features. This enables the organization to remove delays during product development. The reduced delays result in quicker delivery of high-quality products because it allows the entire team to focus on speed-to-market and speed-to-opportunity. Focusing on speed helps them to understand what they should build and what they should not. This results in less complexity in the system and leads to higher quality.
A Focus on Business Needs
You can think of the project portfolio as a set of requirements or capabilities that are loosely associated with business solutions. The lean portfolio gives a definite focus or a vision to those capabilities and strongly associates them with the business needs. The goal is to minimize work-in-progress and deliver each capability as quickly as possible.
Lean and agile teams build in smaller chunks, so features are completed one after another. After they complete one feature, they pick the next feature from a prioritized list of features. This enables the team to always work on and complete the highest priority features. It's relatively easier to manage the key resources who work on smaller chunks and are shared across the team.
When working in small chunks, interruptions are easy to handle. If the team members are involved in multiple projects, it's difficult for the manager to respond to an urgent task due to a lack of bandwidth for resources. If the team is working in smaller groups, any urgent task can be quickly taken after finishing the current task. This, in turn, increases the efficiency of the team.
Let's recap. Lean portfolio management (LPM) is a process of managing a portfolio of projects by applying lean thinking. It's a result-oriented approach that prioritizes and delivers high-quality work by aligning tasks with a company's objectives. Lean thinking eliminates waste in processes and improves efficiencies. The purpose of lean portfolio management is to achieve speed and quality of work, to focus on business needs, to minimize work-in-progress, and to minimize interruptions.
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