Are you ready?

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Agile Portfolio Management for a Fast-Paced WorldAre you ready?

Are you ready for a fast-paced world?Business moves fast. Customers demand now. You need to get ahead of it all. Business is moving faster than ever. Markets are changing overnight; and the startups are disrupting the giants – not causing a little annoyance – disrupting. The biggest risk you can take is to stand still. Do what you’ve always done and, you guessed it, you’ll be lucky to get the same results you’ve seen in the past. Odds are, those smaller, faster companies are going to sail right by.

If you don’t have a formal portfolio management practice, think of where your organization spends its software development budget: there’s no better expression of your strategy. In a world where every organization is a software organization, every software organization is doing some form of portfolio management. If you can’t describe your portfolio management process, chances are you’re not doing it right.

Agile and Lean practices, when applied to portfolio management, will help you keep pace with, then outpace, the new speed of business, giving you a disciplined approach to implementing your strategic vision as realistic work plans. These practices are purpose-built to help you adapt to internal and external changes, take informed risks, make the right trade-off decisions, and optimize how you allocate your available resources.

As a result, you’ll:

decrease time to market

deliver what your customers

want

make better decisions

going forward

increase your investment

returns

“Ask a company today what its top priorities are, and you’ll hear about growth and customer obsession. For enterprise architects working with business and technology leaders, this means investing in technology to better serve customers and using customer satisfaction metrics to evaluate the effectiveness of investments” *

*Forrester Research Inc. Forrester Research, Inc., July

2015, It’s Time For Agile Strategic Planning And Portfolio

Management To Join The Mainstream

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Start with an adaptive mindsetLegacy approaches to portfolio management no longer serve companies trying to survive disruption: They tie budgets to a fixed (and large) scope, require heavy upfront planning, and align resources based on plans from six months ago, rather than adapting to the needs of today. Keeping up with the new pace of change requires lighter-weight processes and an adaptive mindset.

Four fundamentals of Agile Portfolio ManagementIt’s helpful to keep in mind these four fundamentals when thinking about portfolio planning and performance in today’s fast-paced world:

• Value Management helps you prioritize the work with the biggest impact

• Work Management coordinates the fast delivery of prioritized work

• Capacity Management allocates the right “resources” to the prioritized work

• Financial Management directs funds where they have the most impact

DEMAND • VALUE CREATION • SUPPLY • CONSTRAINT

LEGACY MINDSET ADAPTIVE MINDSETSchedule focused

Project funding

Large upfront planning

Assign FTEs to projects

Risks and returns

Value focused

Incremental funding

Continuous planning

Allocate features to teams

Time to market

FEED

BACK

PORTFOLIO PLANNING

PORTFOLIO PERFORMANCE

FEEDBACK

ValueManagement

WorkManagement

CapacityManagement

FinancialManagement

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How do you measure the value created by your organization? When conditions change, do you reevaluate the expected return on your investments? A clear understanding of your desired outcomes puts you in the driver’s seat. You need to be disciplined at carefully selecting the value you deliver, prioritizing the most valuable work, and stopping work that doesn’t deliver value quickly. By stopping what doesn’t work, you open resources for new ideas and requirements. Not every idea needs to go to the back of the line. Breaking free of the “planned equals committed” mindset allows teams the freedom they need to deliver value, not line items.

Agile and Lean practices can help you focus on value over requirements, using lighter-weight and more purposeful techniques like design thinking, build-measure-learn, minimal viable business cases, jobs to be done, and economic prioritization, to name a few.

Work ManagementWork, the effort applied to produce a deliverable or accomplish a task, is what delivers value to everyone. Work management is where value creation happens—where the rubber meets the road between demand (value) and supply (capacity). Organizations need to think of where they spend their effort just like they think of where they spend their money. You can’t let “keeping the lights on” work consume all of your capacity. You must find ways to free up capacity so you can take on innovative and differentiating work.

Capacity ManagementDo you have the people, the technical expertise, and the tools you need to execute on your investments? How fast you reallocate “resources” to respond to market changes is all about making the most of your scarce, knowledge worker capacity. Five simple principles will help you better manage capacity and create stronger portfolio plans, faster.

Coast Saving

New Revenue Compliance

Customer Satisfaction

Employee Satisfaction

Stakeholder Value

Revenue Retention

Value

WasteExperiments DifferentiationNeutralizationProductivity

• Team as the Resource Unit

• Roughly Right

• Continuous Planning Cadence

• Matching Supply to Demand

• Tolerance for Incomplete Data

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“It is better to be roughly right than precisely wrong.”- JOHN MAYNARD KEYNES

Team as the Resource UnitAllocating resources to work should no longer be an excruciating exercise in managing time slices of FTEs. With so much data correlating stable teams with higher performance, the team supersedes the individual as the resource unit. Agile teams delivering value faster, which opens up new opportunities at the strategic level for companies to respond and adapt quickly.

Roughly RightPrecision can often bring a false sense of certainty, especially if you tie your capacity to precise plans that become obsolete within months. The better way to manage uncertainty is to aim for “roughly right”: compare capacity (supply) and value (demand) at a level appropriate for the planning timeframe, then distribute the rough plan to those closer to the work. High-performing teams (and, by extension, high-performing organizations) need the authority and accountability to plan at a more refined level within a shorter planning timeframe.

Continuous Planning CadenceTo respond to market changes quickly, you need to look around more frequently. While annual planning provides a longer-horizon view, you need to supplement it with a quarterly planning cycle where you revise long-range business commitments, forecasting, delivery plans, and budgeting decisions. More frequent planning at higher levels provides updated strategy, guidance, and decision- making to the lower-level planning cycles, which in turn provide learning and feedback into strategy and future decisions.

Matching Supply to DemandBusiness value streams — end-to-end workflows of how the business delivers value to customers and stakeholders — provide the context for better understanding customer and stakeholder problems and collaborating on differentiating solutions. While it’s tempting to consume available capacity with low-effort, limited-value work, consuming that capacity undermines the potential to deliver higher returns on investment work. Bias your decisions towards what you should do (to meet more demand) vs. what you could do given your supply expertise.

Tolerance for Incomplete DataIn today’s cut-throat business environment, the cost of delay can be so high you have no choice but to get comfortable with operating on good enough data. You can feel confident if you know which data is critical for making roughly right decisions. As you adopt a continuous planning cadence, the ability to manage uncertainty becomes much more tolerable because you know you will have the opportunity to inspect and adapt at more frequent intervals.

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Financial ManagementTraditional project funding inhibits your ability to respond quickly to market changes and deliver more value faster, as it couples funding with scope for the entire project duration. An adaptive mindset shifts to allocating your budget to high-level investment areas rather than to individual projects; then, apply each investment area budget to fund dedicated teams. During the year, you review and adjust what the teams work on to maximize the yield from your software organization. Combined with short iterations that deliver value faster and continuous planning cadences which let you steer for results, you can break from the traditional funding model to adapt your funds where they matter most and intentionally fund innovation.

Portfolio Planning and PerformanceDo you know where you want to be in three to five years? Balancing a portfolio begins with strategy that’s aligned to your vision. The most adaptable organizations create plans informed by their current portfolio performance, rather than creating aspirational plans that can never be realized. The connection between portfolio planning and portfolio performance is key to ensuring your work is aligned to strategy, capacity is used wisely to deliver on business strategy and your strategy is informed by the work progress.

Are your portfolio plans informed from past performance? The empirical knowledge of past work represents the best predictability indicator for future work in similar conditions. By knowing what your teams can realistically deliver, you are improving the accuracy of your portfolio plans. As you develop faster feedback loops between portfolio planning and portfolio performance, you’ll know quickly if you need to re-plan to adapt to internal and external changes.

Get GoingWhen you operate in a fast-moving world with threats and opportunities, you must respond with adaptive strategies, fast performance, and funded innovation. An adaptive mindset and agile portfolio management fundamentals will help you rapidly adjust your strategy to respond to market shifts. Learn more about agile portfolio management techniques and how CA Technologies can help you deliver on strategy.

Read more about Agile Portfolio Management: visit ca.com/agile

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CA Technologies (NASDAQ: CA) creates software that fuels transformation for companies and enables them to seize the opportunities of the application economy. Software is at the heart of every business, in every industry. From planning to development to management and security, CA is working with companies worldwide to change the way we live, transact, and communicate – across mobile, private, public cloud, distributed and mainframe environments. Learn more at ca.com.

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