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Wednesday, October 30, 2013

Value of Product Governance & Portfolio Management in Agile Product Development

In a networking event on effective agile transformation, a question came up from a few learners in terms of the practices of project governance in capital project selection was agile or traditional development practice. The same question manifested differently in a PMI-ACP class I was facilitating where a learner expressed the challenges with not doing some proactive requirements gathering exercise around the extent of data exchange methods from the application service provider as part of the Agile approach to favor customer collaboration over contract negotiation. The learner reasoned that the later negotiations to add these requirements only hurt the organization with increased costs, reduced speed to market, and decreased customer satisfaction and organizational profitability.

There seems to be a common pattern that I think is evolving where practitioners of agile are forgetting the importance of Agile Manifesto. While Agile Manifesto was prohibiting extensive upfront requirements gathering for software product development keeping working software as a measure of progress, the Agile manifesto never eliminated documentation requirements. In fact the stage-gate approaches promoted by Dr. Robert Cooper from the Product Development Institute (Cohn, 2010) takes product development from discover to post-launch review through the stage gates of idea development, business case development, development, testing, validation, and launch introduces multiple stage gates. Each stage gate becomes a major milestone serving as a go/no-go decision making point.

A formal product selection criteria, also advanced by Project Management Institute’s Program and Portfolio Management Processes, for the organization to evaluate the key performance indicators to measure the return on investment (ROI) and use financial measures likes Internal Rate of Return (IRR), Net Present Value (NPV), & payback period to evaluate the profit potential, operating expenses, resource requirements is not prohibited by Agile Manifesto. Some product development where specialized expertise is outsourced to be competitive in the market, dependencies on external vendors that handle testing or audit procedures, use of distributed agile teams, or adherence to high quality management practices like CMMI may mandate that the standard operating procedure (SOP) is clearly outlined so that the teams productively work towards product development and are not burning unnecessary cycle times with delays and external dependencies. Not considering these things in advance by using Agile’s Manifesto as the shield to avoid “Contract Negotiation” or “Comprehensive Documentation” is not Agile’s failure.

Mike Cohn (2010), a pioneering contributor to the Agile Manifesto, recommends that any document or artifact required to achieve compliance be part of the product backlog and use of agile project management tool and practices for products in the regulated industries demanding compliance requirements. In a white paper submitted by Primavera, Oracle (2011) recommends the combination of Agile and Enterprise Project Portfolio Management (PPM) systems mitigates the risk in pharmaceutical and financial services industry (p. 3) increasing visibility of projects, resources, schedules and business value for the entire organization (p. 6).

It is therefore evident that our own understanding of Agile’s core principles may have to evolve when we apply agile in different industries. But, putting down project governance, product selection, and product portfolio management techniques as ineffective practices promoted by Agile is choosing to ignore the best practices. It is no wonder that topics of scaling agile are evolving leading to the latest description of Scaled Agile Framework (2013) for implementing scaled lean and hybrid agile framework in enterprises.

Description of the Scaled Agile Framework (2013). Retrieved October 26, 2013, from

Oracle (2011). The Yin and Yang of Enterprise Project Portfolio Management and Agile Software Development: Combining Creativity and Governance. Retrieved October 27, 2013, from

Cohn, M. (2010). Succeeding with Agile: Software development with Scrum. Boston, MA: Addison Wesley