How to drive a PPM process optimization project using lean and agile methods

Explore how lean and agile methodologies can be implemented to optimize Project & Portfolio Management 


Every organization that works on projects sooner or later will be faced with the problems of managing many projects at the same time. Human resources are limited, so priorities must be established to decide which project should be carried out first, which team should be assigned a specific project, and which investments should be put into action. All of this should be done with maximum adaptability to changes in a specific context. Also, there are circumstances in which, despite the significant investments in both people and money for a project, a company continues to generate bad results, because of individuals working on the wrong tasks or taking on too many initiatives. This attempt to accomplish too much can cause projects to be affected by expense overruns, delays, and low quality. Therefore, decision-making speed becomes critical when managing a project, and this is right where Project & Portfolio Management ( PPM ) comes into play.


Project & Portfolio Management

PPM is defined as the selection, prioritization and control of an organization’s projects, programs and operations in order to achieve strategic objectives in sync with the goals of the organization. Basically, it can be described as the prioritized set of all projects and programs in a company, reconciled to the resources available to accomplish them. The former concerns the implementation of the appropriate projects at the right time. As a result, it demands a whole set of new skills and viewpoints. Portfolio management can help organizations to successfully implement change and achieve their strategic goals. The most important features of PMM are:


  • Focus on return on investment and effective implementation of change through programs and projects as a whole
  • Ensuring optimal allocation of resources (human resources, assets, materials, money, and services) to achieve strategic business objectives
  •  Supporting organizations in choosing future projects and programs by giving managers more information about where to make the right investments.
  •  Ensuring that the priority of projects and programs is periodically reviewed so that resources are invested in line with the organization’s strategic objectives.


Moreover, PPM helps executives know the outcome of their project managers’ data, allows stakeholders to get in touch with solid information, and, lastly, enables project managers to easily connect with their teams. The latter results in improved communication among team members that can work more effectively.

One of the most important objectives of PPM is the ability to determine which projects to support in the most efficient way. Project portfolio optimization (PPO) is the attempt to carry out the best decisions under certain conditions. Optimizing a project portfolio is the process of building an optimal portfolio given current limitations and constraints.


When there are too many projects at stake, teams get overworked by managing different priorities at the same time and this results in a decreased productivity. The other problem is the lack of openness in the management process, which can result in a mismatch between business’ strategy and its implementation.


Therefore, one essential element for a successful portfolio optimization is to have lean processes in place that simplify projects data and use them to optimize the portfolio. To deal with them, two important methodologies for managing projects in line with the needs of modern project managers come into play: Agile and Lean.


Agile Portfolio Management

Agile portfolio management is a more flexible approach of managing a portfolio of projects and programs by emphasizing decentralized control, transparency, prioritization and improved alignment between execution and strategy. This approach is based on the Agile methodology, defined as an iterative technique of managing a process’ design and develop activities in a really flexible way, based on the Agile manifesto. The latter is composed of four principles, that favor:


  • People and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan


Using an agile portfolio means doing all the PPM tasks in a more efficient and streamlined way, delivering the maximum value to the organization. It is all about maintaining flexibility without compromising speed.


How does an Agile portfolio management process work?

Strategizing, prioritizing, and aligning the portfolio’s projects with the strategic objectives of the organization is the key. It is at this moment that the Kanban method comes useful. Kanban means “visual board” and it is defined as a workflow management method for defining, managing, and improving services that deliver knowledge at work. Its primary focus is on visualization, limitation of work in progress and managing flow, and it is applied on various levels of the organization, including the portfolio. In practice, the process is accomplished using Portfolio Kanban, which allows to track and optimize the flow of several business activities and projects.


Portfolio managers can create a committed Kanban board to visualize selected initiatives based on the organization’s strategy. A Kanban board is a tool for workflow visualization which helps to better understand processes and gain an overview of the workload. Then, depending on the size of the projects, they can be subdivided into sub-projects within that board or another. As the organizations works its way down the levels, it may continue to use interrelated Kanban boards to display different portions of the specific department or the entire business. Those can range from the most general project management processes to the individuals’ tasks assigned to members of the team. The goal is to build a central point where to keep track of the portfolio without losing sight of how it is being executed between the different teams.


Another important practice for controlling the portfolio flow is to keep the number of convergent projects to a minimum. This will help to lessen the overload on the staff and match the incoming demand with concrete capabilities. As a consequence, the firm will guarantee that the team is focused on the most vital tasks at any moment, focusing on boosting the overall output.


Revisiting the project portfolio on a regular basis is an essential aspect of portfolio management. Kanban advocates the use of feedback loops/cadences on a portfolio level to accomplish this. The objective is to examine the status of ongoing projects, goods, or services on a frequent basis and engage in collaborative debates with the middle management about things like recognized dependencies or hazards, and available capacity throughout the organization. Reviewing what’s going on inside the Agile portfolio on a regular basis helps managers react to strategic changes in direction and ensures that the appropriate things are done at the right time.


Agile portfolio management requires constant improvement. That is why a method is necessary  to gather and evaluate data in order to make better judgments. In a Kanban system, the organization can achieve this by tracking several agile metrics such as lead and cycle time, throughput, and work in progress (WIP). Then, using various charts such as Cycle Time Scatterplots, it is possible to track when the projects inside the portfolio are completed and how quickly they are anticipated to move through the system on average. This allows organizations to identify anomalies and developing patterns and take any required measures or explore management process changes.


Lean portfolio management

Lean PPM focuses on eliminating time-consuming governance inside an organization and on boosting the overall speed of the planning and reporting procedures associated with its vital function. The purpose of Lean system is that of maximizing value while eliminating waste, so adding greater value to the customer while making use of less resources. Toyota was the first to use the Lean methodology. The company chose to impose a strict regime aimed at minimizing waste in each phase of its Toyota production system. The result led to a reduction of production costs and lead times and the quality was enhanced. When applying a Lean management approach to a project or portfolio, there are five essential concepts to keep in mind:


  • Determine who your consumers are and specify their value
  • Determine your map and value stream.
  • Minimize waste
  • Respond to customer pull
  • Strive towards perfection


The steps to implement a lean approach are as follows:


–    Begin by clearly defining the team’s objectives and using those to establish criteria.
–    Each team has its own value stream. You need to determine which actions are necessary and which actions are completely unnecessary.
–    This is the section of the Lean PPM function where a company begins to get things done.
–    Another critical principle of Lean portfolio performance is that of responding to customer pull.


The most crucial aspect of the Lean management concept is that the task is never finished. No matter how efficient things appear to be at a specific moment, a company should always re-evaluate its processes and monitor against KPIs to ensure it is wasting as little as possible and operating as effectively as possible.