Agile PMO - Portfolios & Measurement of Success

Post date: Jan 12, 2015 11:19:45 AM

Project success is regarded in different ways and most of the time there is a strong emphasis on concerns affecting different dimensions such as scope, cost, time, quality, risks and benefits (this would be a complete list of the business case aspects).

While investments decisions are driven by financial forecast metrics such as the net present value and the internal rate of return, a critical dimension of a portfolio of projects should be its alignment with the overall business objectives of the organization executing those portfolios.

The measurement of the benefits coming from each project in a portfolio proves to be more important than a mere consideration of not meeting a certain constrain. A 20% budget overrun for a portfolio or project within it, might have realized the acquirement of a market segment that would significantly increase the return on investment in the next two years and then if this was indeed an objective of the company, then despite of not meeting a constraint, that project or portfolio should still be viewed as successful.

Benefits realization should take priority compared to the project execution into given boundaries. Portfolios are in general planned, monitored but are not that often measured with respect to the benefits achieved.

However a balanced score card (BSC) could help in achieving this kind of measurement at portfolio level and in case of an agile company the measurement of the agile level of the organization would add an extra dimension of process improvement on the way, at the same time helping in improving less quantifiable objectives, such as customer satisfaction, employee and stakeholder engagements in portfolios.

What can be measured with regards to benefits realization? Below some criteria that is an integral part of the Balanced Score Card (BSC):

  1. 1.Efficiency

Is the portfolio meeting the organization's targets with regards to deliverables,

productivity, revenue and cost?

What to measure: contribution margin, organizational stability, capacity, productivity, velocity (for forecasting in order to derive an ideal, constant release cycle)

    1. Value Delivery

Does the portfolio deliver to the organization and its customers the desired business value?

What to measure: number of releases, user story points delivered, release date percentage delivered according to expectations, architectural refactors(including technology upgrades and advancements)

    1. Quality

Are portfolio projects' deliverables meeting the quality targets of the organization with respect to their customer quality standards and expectations?

What to measure: defects and normalized defects per number of users, product satisfaction, support satisfaction, support calls and normalized support calls per number of users, escalation percentage (to development) for support issues

    1. Project Management Strategy

Is the portfolio following and enriching organization's goals regarding project and portfolio management targets for the organization?

What to measure: effectiveness of templates, procedures and processes, effective usage of organizational process assets, management strategies (especially risk, procurement and quality)

    1. Agility

Is the portfolio capable to meet the organization's goal of improving and meeting future performance objectives?

What to measure: an agile process self assessment with regards to product ownership, release planning and tracking, iteration planning and tracking, teamwork, development and testing practices

Through periodic measurement and monitoring of these metrics better alignment of portfolio and project objectives with organizational objectives and its vision will be achieved and this will count more significantly to project success than fulfilling constraint boundaries at each project level.