Portfolio Management

Managing change in an organization is much like renovating a home. Some changes are deeply foundational – like updating your heating or plumbing system – while others are more cosmetic or localized, such as designing a new office space. Each initiative requires attention, and has a different dynamic. Overseeing these initiatives at the same time requires portfolio management.

At its core, portfolio management is about making integrated decisions and effectively managing change initiatives. It helps organizations focus limited resources on the initiatives that matter most, while balancing autonomy and alignment across the enterprise. 

Navigating Complexity: Different Dynamics, Different Approaches 

Modern organizations juggle a wide range of change initiatives. These fall along a spectrum of dependency and impact: 

• Foundational initiatives, such as shared IT infrastructure or integration platforms serve as groundwork for business initiatives and therefore need to follow their pace. Central decision-making is supported by business cases focused on value and costs. 
• Distinctive initiatives, such as shared IT infrastructure or integration platforms serve as groundwork for business initiatives and therefore need to follow their pace. Central decision-making is supported by business cases focused on value and costs.

Portfolio management brings structure to this landscape by recognizing and managing these different dynamics in different ways. It ensures the dynamic of every activity is respected, while maintaining balanced decision-making on portfolio level. 

Effective portfolio management depends on a strong partnership between business and IT. Business brings insight into customer needs and business value creation, while IT contributes technical direction and innovation. Together, they ensure that initiatives are not only impactful, but also feasible and future-proof. 

From Prioritization to Empowerment 

Traditional portfolio management focuses heavily on ranking projects and allocating budgets. In agile environments, the approach is evolving: 

• Product teams pitch their ideas in settings inspired by formats like Dragon’s Den, backed by data and business cases. 
• Product owners and business directors take greater responsibility for their domains, especially where work can proceed independently of other systems or initiatives. 
• Central portfolio discussions focus on value creation, resource allocation and aligning the high-level roadmap.

This means that the central portfolio process becomes more strategic and less about micromanaging every decision. 

Seeing the Business in Color 

To guide these decisions, we at Anderson MacGyver use multimodality as framework to classify business activities and their supporting IT based on their character and strategic value. The model divides business activities based on their dynamics and distinctiveness, and can be used, among other things, to make strategic choices or to create focus and alignment between teams.

Each modality benefits from a different way of working. For instance, for generic, stable activities a structured (project) approach is fit, while unique and dynamic activities flourish in autonomous teams focused on learning and innovation. Creating this clarity helps organizations to effectively and integrally manage their digital portfolio.

Portfolio Management That Builds the Right Foundation 

Just like in a well-planned renovation, the goal is to ensure the essentials are robust, while allowing room for creativity, ownership, and differentiation. Portfolio management provides the decision-making structure to do just that — building a strong foundation while creating areas of autonomy to boost innovation.