these practices in the industry. Equipped with these principles, we can now close the gap between a naturally agile business environment and agile software engineering.[i] That means the needs for adapting to constant change in the business world translates directly into agile management practices, which are then engineered by an agile project team.
Challenge With Traditional Portfolio Management
In larger organizations, however, a major challenge remains: the alignment of the strategic corporate vision at an executive level and the transformation at a project level. Due to the size of the organization, political hierarchies, and geographical boundaries, the communication channels between levels are often ineffective. Written status reports, tools, and indirect communication channels can create additional layers of ambiguity.
Agile project teams need direct access to the folks creatingthe corporate strategy so that questions and issues can be resolved pragmatically. For example, executive management wants unbiased insights into strategic IT projects. Review meetings, however, are often executed with stakeholders at different levels of an organizations. Reports are created at many different organizational levels.
The higher the in the hierarchy the more condensed the status report, focusing on metrics rather than assessing the technical progress and issues. It is also very common, that project teams are not very open about the issues in written formal reports.[ii] Furthermore, the performance of one project may be difficult to compare with the performance of another project. Different metrics, review cycles and the inclusion of prose-style reports make it very difficult to compare individual projects with each other. Harvesting, administrating, and massaging the data could increase internal costs as compared to open communication in a review meeting with a clear agenda.
On the other hand, project team members (including the project manager) often cruise on their own towards the goals initially defined in vision documents, a.k.a. scope or mission documents Not knowing when and how the executive strategy has been adjusted, the project team could continue going into the wrong direction.
Sometimes the vision is re-communicated to projects that are in progress. This may challenge them with drastic changes to the goals of their project, especially if the project is near the end of the schedule. Smaller and more frequent changes to the corporate strategy will be easier to digest than one major shift late in the project.
Establishing Agile Portfolio Management
A portfolio which includes agile projects should be in-line with the Agile Manifesto and the Declaration of interdependence. Agile portfolio management must therefore foster and nurture an agile environment top-down. It seems logical, for example, that a portfolio manager should not request frequently endless amount of metrics from the project teams without violating the agile value of working software over comprehensive documentation .
Similarly, a portfolio manager should not ask the agile project manager to lay out complete detailed project plans before the project is initiated without interfering with the value of improving effectiveness and reliability through situationally specific strategies, processes, and practices.
On the other hand, an agile project depends on the PMO removing or changing non-agile, traditional and dysfunctional procedures. Only this will encourage a corporate-wide agileenvironment. In exchange, agility is translated basically from software code back to a corporate strategy from the bottom up. The agile pyramid only enables a bi-directional agile collaboration if all layers in the pyramid encourage agility. Without a layer, the pyramid is not effective and may collapse.
Agile portfolio management is therefore a two-way collaboration channel, simplistically balanced in a sense so that agile project teams are equipped to execute the corporate strategy while providing enough information back to portfolio management to support sound decisions (see Figure