Portfolio management

Prioritize cloud products and initiatives in line with strategic intent, operational efficiency, and your capacity to deliver.

At the heart of every business is the business model. The business model articulates how you create value from raw resources of materials and talent into products and services. These products and services are organized into a portfolio to be presented outwardly and communicated to customers through marketing and sales.

The late management guru Peter Drucker famously stated that the purpose of business is to create and keep a customer. If your purpose is to create and keep a customer, and customers realize the value you create through your products and services, managing your portfolio of these products and services is an essential capability for your business.

Research has shown that customer-centric companies generally outperform their peers. Such companies have product-driven structures and cultures, where products specifically target customer needs, and consider the end-to-end experience across all interactions and business operations. This means remaining true to your mission and brand while also being able to adapt to new opportunities in the market.

Customer-centric companies adopt an enterprise-wide view of the product portfolio, modernize their business and operational governance, and make strategic decisions on where to invest in innovation versus scale, based on customer behavior, operations, culture, and market opportunities.

Portfolio management is a living view of what your products and services are, how you deliver them, how you uniquely message them in the market, and how your customers perceive their value. Done correctly, you will have business insights into each of these areas through operational metrics. Portfolio management that uses the agility, scale, and speed of the cloud enables you to operationalize your strategy, product portfolio, and pace of innovation. It is core to your business model and the heart of your business.

Start

• Product portfolio analysis — Product portfolio analysis is the very first step in your portfolio management strategy. It helps you categorize the products into different sections and implement the right course of action. Whether it’s a project or a product, the very first step in any management strategy is to evaluate if the product or service being built aligns with organization’s short and long-term goals.

  • The analysis should also diligently assess existing products or services offered by your organization. The intent here is to minimize investments in lagging products and bolster the development of the ones that have breakthrough potential. This approach not only impacts the top line but also ascertains that your resources are working on value-adding assignments.

  • Given that most product launches fail, as part of the product portfolio analysis, you must diligently study the market, evolving demands, and other parameters, before launching the new product or service.

• Product lifecycle stages — The next step after extensive analysis and categorization is to find out where each product stands in the product lifecycle. The comprehensive view of the product and its stance in the lifecycle enables you to prioritize and eventually decide the right course of action.

• The product portfolio roadmap — You can start with a cloud portfolio roadmap by considering short-term and long-term outcomes as well as low-risk (proven) and higher-risk (experimental) opportunities. Use automated discovery tools and the seven common migration strategies for moving applications to the cloud (known as the 7 Rs) to rationalize your existing product portfolio and build a data-driven business case.

  • Portfolio plans should include migration, modernization, and innovation initiatives, and consider financial (lower costs and/or increased revenue) and non-financial (for example, improved customer and employee experience) benefits.

  • Portfolio management teams optimize the business value of your portfolio in line with your resource, financial, and schedule constraints. To reduce your time to value, consider increasing the frequency of your planning cycles or adopting a continuous planning strategy.

• Enable a product-driven organization — A product-driven organization has the culture, capabilities, mechanisms, and organizational structures necessary to build and maintain a portfolio of products at a scale that delivers customer value and revenue in a profitable way. Products are embedded across organizational levels, through all parts of the organization, aligning everyone (business, technology, finance, sales, marketing, and other shared services) around the same strategic outcomes.

Advance

• Scaling and sustaining product innovation — More and more successful organizations are implementing an open Innovation program: ideate, pilot, scale and sustain. It is important to include and embed innovation in your portfolio strategy. With an accelerating pace of change, it is critical to ensure that innovation strategies and initiatives are fast-paced and sustainable. The portfolio management team helps you think strategically about early wins, develop selection criteria for initiatives to create market differentiation, and advance your culture of innovation.

  • Organizations benefit by positioning the intended business results as criteria for determining the best initiative investment.

  • Rapid breakthrough innovations help organizations to build new horizons. It is equally important for organizations to gradually develop and build on the existing products and ideas to ensure longevity.

  • Portfolio management ensures breakthrough innovations and incremental innovations are pursued to fuel the sustainable long-term growth. Seeking simplicity is one of the keys to successful innovation. Portfolio management team priorities big ideas to strategic outcomes and prioritizes initiatives for product teams’ ownership to deliver end results.

• Benefits and value realization — Organizations measure how prioritized initiatives add true value to the enterprise. Value realization is a highly impactful method to capture quantitative and qualitative outcomes. The portfolio management team guides the product team on how to identify, analyze, deliver and sustain these benefits in alignment with the strategic vision, goals and objectives.

  • Guide teams to establish key performance metrics for each initiative in partnership with the business. The portfolio management team enables appropriate tools, such as benefit register, benefit realization roadmap, benefits breakdown structures, and helps to establish processes to monitor and control progress against the established benefit realization plan. Organizations gain business commitments though transparent communication on the benefit progress report.

Excel

• Data-driven decision-making — Your success in portfolio strategy is driven by your vision and long-term growth plans. To be successful, it is also important that business goals and priorities are established and overseen at the executive level. It is important to incorporate key metrics to drive data-driven decision making to help delivery of program and project teams. Integrate enterprise systems with your portfolio system to help ensure effective performance management. This ecosystem enables faster and more effective decision-making at multiple levels.

• Strategic delivery excellence — Organizations that have strong delivery capabilities excel and compete well. These organizations ensure cultural adoption and successful implementation and organizational change. Constant innovation-driven portfolio initiatives help to stay on top of the operations and markets. Innovation is a continuous process everywhere in the organization.

The operations teams focus on the change operation and the development side of the organization focuses on more exploratory and innovative initiatives towards evolution. There is a realization that the fastest and least expensive way for anything new and innovative is through setting up a new program or portfolio. Now it is possible to talk about real strategy delivery with required level of integration within organization.