What is Software Portfolio Management

What is Software Portfolio Management?  They never taught us about this in college.  This is when you are reading your email in the morning from an unhappy customer who wants new feature X when suddenly your phone rings and the VP of Sales wants to know when you will have an install ready for a customer Y whom you never heard of before and then all of the sudden the CEO walks in and announces that your team needs to start on pet project Z.  Sound familiar?  Enter SPM...a solution to stop the madness.

Here's how it works.  Your Executive Staff meets every two weeks.  You produce a list of all the hours available that your programmers collectively have for the upcoming two weeks (minus vacation, etc).  You produce a second list of ongoing projects, pending projects, and then you offer up the floor to whomever wants to request new feature X, Y, or Z.  They get to justify their request to the whole Executive Staff, preferably on paper, and then the whole staff decides when to start on the new project, and how to prioritize it. This way, project requests get presented and evaluated against the opportunity cost of the other projects, and not based on urgency or theatrics. 

There's a little more to it, but this basically describes an effective solution for an age-old problem.

Mike J Berry www.RedRockResearch.com

Book Review: Optimizing Corporate Portfolio Management - Part 1

I just bought a new book on Portfolio Management called Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy, by Anand Sanwal (Wiley Press). To my amazement, the forward commentary is by Gary Crittenden, a long-time friend of mine. Gary and I lived near each other in Munich, Germany years ago. I believe my girlfriend at the time was a nanny for his kids. He led a group of us on a 5 day bicycle trek across Austria. Amazing experience. We went skiing together often in Der Schweitz.

Gary worked for Bain at the time, and later was the VP of American Express, and now has the CFO chair at CitiBank. (If your reading this, Gary, Here's a big 'Hello!') I'm eager to read the book because it details the challenges, solutions, and results American Express faced as it went through a Portfolio Management Revolution. Internally, they call the process Investment Optimization (IO), but it is known throughout the industry as Corporate Portfolio Management (CPM). This process scales very well to the software industry, except that only about 50% of all software companies in America have any kind of Portfolio Management process. Of those, few target Customer Value as the main driver for success. So there is a lot of work to be done in the software development industry in this area.

Mike J Berry www.RedRockResearch.com