Is there still a role for portfolio management in an Agile enterprise?

No one can doubt that our time is characterized by traditional organizations being challenged by tech-oriented start-ups. As a response, number of incumbents are moving towards Agile operating models, keeping up with increasing and fast evolving customer expectations.

Legacy applications are often identified as main impediment on this journey. But actually, the operating model embedded in the organization’s DNA could potentially be even harder to adapt to this new way of working.

There is no such thing as an Agile project. When starting to adopt Agile methodologies, companies are applying those to a limited set of projects, resulting in an increased capability to react to changing customer — and thus business — requirements, hence reducing time-to-market

Taking the next step to scaled Agile requires enabling long-standing teams and a mindset of continuous improvement, will blur the line between projects and products.

Portfolio management = centralized management of one or more project portfolios? According to the Project Management Institute, “portfolio management ensures that an organization can leverage its project selection and execution success. It refers to the centralized management of one or more project portfolios to achieve strategic objectives” (www.pmi.org).

What will remain of this role when projects no longer exist? Does this mean that there is no such thing as portfolio management in Agile enterprises?

Enterprise level product owner. Several methodologies for scaled Agile do exist and all of them have a role or process in place to ensure strategic consistency. The Spotify model, for example, will serve its customers via Agile “squads” and business-oriented “tribes”. But what is the instrument to manage the overall cross-tribe strategy?

Throughout Scaling Agile transformation journeys, this is naturally raising questions like:

• Who will define the tribe focus?
• How will budgets be distributed over tribes?
• Which high-level epics will be put forward and how will they get prioritized?

In a scaled Agile enterprise, these questions will need to be addressed by a limited set of enterprise level product owners, reporting to the C-level. They will need to combine a great business savviness and in-depth knowledge of the Agile principles. Through tribe definition, budget distribution and continuous epic prioritization, they will hold the instruments to keep focus and ensure strategic consistency.

Conclusion. Just as product manager and project manager roles are evolving towards product owners and scrum masters, a fundamental change will take place at the level of portfolio management focusing on strategic prioritization and empowering the different agile teams to take care of implementation. If the actual portfolio managers are able to transform themselves and demonstrate their ability to be the liaison between C-level and tribe heads, they are best positioned to become the future enterprise level product owners.