One of the most important things I’ve learned from my recent stint in the project and portfolio management (PPM) space is that business success is not just about efficient and effective project execution (agile or traditional). Success is more determined by making sure that your precious resources are working on projects that return the most value to the organization. I can execute the hell out of a project and bring it in 25% ahead of schedule with a satisfied customer. But if my competitors are delivering new higher value products that satisfy a broader customer base, then I will be left in the dust. The irony is that they may have worst project execution and still beat me in the end if they’ve selected the right projects to invest in!
In the PPM space, determining what project investments to make is typically considered part of demand management. Demand management considers inputs from a variety of internal and external sources including customers, analysts, partners, IT, business units, and more. All of this demand needs to be reviewed and appropriate selections made.
If the incoming demand is not structured and managed, effective decision making will be impossible (garbage in, garbage out). Each request should include a standardized business justification for the new “investment” that includes meaningful expected costs and benefits. The requests should also demonstrate alignment with corporate goals, compliance with technical architecture, and other measures important to the organization. If a standardized structure to incoming demand is applied, a selection process can be realized that allows comparison of all incoming demand and with ongoing projects in enterprise portfolio.
There is a broader business context that agile projects need to exist in for an organization to succeed. The larger and more complex the organization, the more standards and processes are required. This may seem like blasphemy to us agile zealots, but its the cold hard reality of managing a successful business. The key is to put in appropriate controls and at the same time leave enough degrees of freedom to foster an environment of creativity where agile teams can thrive.
"Demand Management" covers the front end of the funnel. In a future post, I'll discuss the impact on the tail-end of the funnel and the impact of product release on the broader organization. This has a whole other set of issues that impact agile teams.