Agile Portfolio Management Using the Lean Canvas

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Great slides from AgilePalooza Twin Cities: Brad Swanson is a Senior Agile Coach at agile42. He started his software career at age ten on the Apple IIe, and is now a Certified Scrum Coach (CSC), Certified Scrum Professional (CSP), and Certified Scrum Master (CSM) with 17 years of experience in management, project and program leadership, product management, and software development in both start-ups and large companies. Brad has led the adoption and implementation of agile and scrum methodology at many organizations, leading successful agile projects with teams in the US, Europe, and Asia. He has deep experience with agile software development, starting with eXtreme Programming (XP) in 1999, and also Scrum, Lean and Kanban methods. He is active in the Agile and Scrum communities as President of Agile Denver and speaker at international conferences such as Agile2011, Agile2012, Agile Tour Toronto and multiple Scrum Gatherings. See when AgilePalooza is coming to you! http://agilepalooza.com/

Transcript of Agile Portfolio Management Using the Lean Canvas

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2013

    Portfolio Management using the Lean Canvas

    Brad Swanson, CSC, Senior Agile Coachbrad.swanson@agile42.com@bradswanson

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    The Agile Coaching Company We make your agile transition succeed agile42 is a market leader in providing agile transformation services to companies looking to adopt a more efficient and adaptive way of working.By continually refining our approach, agile42 has developed a unique and proven framework for supporting organizations in realizing the benefits of a agile & lean practices. We provide assessment, strategic consulting, training, and coaching to get you results. Our customers regularly confirm that they achieve: Accelerated revenue generation Faster Return-on-Investment Improved technical quality Rapid delivery to market Increased team motivation

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    Photo: Rory Mizen

    HighestPaidPersonsOpinion

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2013

    Adaptive Portfolio Credo: We Value...Optimizing the holistic portfolio over protecting

    departmental budgetsCourage to change over following a planAbility to evaluate the portfolio on a frequent basis

    over infrequent (i.e. annual) planning cyclesResponding to emerging opportunities over sticking

    to the planMaximizing value over managing costCollaborating on decisions over centralized authority

    Scrum Coach Retreat, December 2011

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    1.Problem

    top 3 problems

    Exis2ng alterna2ves

    4.Solu2ontop 3 features

    8. Key metricse.g. AARRR

    3. Unique value

    proposi2onClear compelling message. Why makes you dierent?

    2.Customer segments

    Target customers

    Early adopters?

    9. Unfair advantageNot easily copied

    or bought

    5.ChannelsPath to customers

    7. Cost StructureCustomer acquisi2on, distribu2on, people,

    etc.

    6. Revenue streamsRevenue model, life 2me value, revenue,

    gross margin

    Lean Canvas: Ash Maurya

    Lean Canvas, from Ash Maurya: Running Lean. Licensed under Crea2ve Commons-AVribu2on-Share Alike 3.0

    Product Market

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    BuildLearn

    Measure

    Minimize time thru the loop

    Validated Learning: the Build-Measure-Learn cycle

    Eric Ries: The Lean Startup

    1) What do we need to

    learn?

    2) How can we measure it?

    3) What is the simplest thing

    to build that would let us

    measure?

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    ProblemTop 3 problems

    Exis2ng /alterna2ve solu2ons

    Customer segmentsEarly adopters?

    Success metrics

    Leading and lagging indicators

    Possible solu2onsKey features & benets for customers & business

    Business readinessWhat is needed to deploy and support the solu2on?

    (Sta, budget, training, systems, support, opera2ons dependencies on projects/

    vendors)

    ChannelsPath to

    customers

    CostsPeople, training, capital, marke2ng, etc.+ Objec2ve jus2ca2on

    Business value1. User & business value2. Cost of Delay (urgency)3. risk reduc2on/opportunity enablement+ Objec2ve jus2ca2on

    Lean Project Canvas

    ProductMarket

    Cost of delay

    time

    linear

    dela

    y co

    st

    1,2,3,5,8,13,21 1,2,3,5,8,13,21

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    time

    linear

    dela

    y co

    st

    time

    must do now

    dela

    y co

    st

    time

    logarithmic

    dela

    y co

    st

    time

    intangible

    dela

    y co

    st

    Cost of Delay is the cost we incur by delaying delivery of a product, due to lost revenue or unrealized cost savings.

    Cost of Delay profiles

    time

    fixed date

    dela

    y co

    st

    Kenny Rubin: Essential Scrum

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    ProblemDistributors dont know inventory and must call to nd it.Extra call volume

    Exis2ng alterna2ve solu2ons

    Call to nd inventoryOrder on back-orderThe compe22on

    Customer segmentsDistributors

    Success metrics

    Inventory inquiry calls decline 50%large orders increase by 5%Customer reten2on up by 2% (6 months in)

    Possible solu2ons

    Integrate ERP inventory to order system & web siteShow es2mated ship date on orders

    Business readiness

    Marke2ng to adver2se featureWarehouse sta to test ERP integra2onSetup to measure # inventory inquiry calls

    ChannelsWeb siteAdver2se to distributors

    CostsWeb site development: SmallERP integra2on SmallMarke2ng: Small

    Business valueLarge order increase: $100k/yearCustomer reten2on up 2%: $100k/year$50k/year in reduced call volume

    Example: Inventory visibility for distributors

    ProductMarket

    Cost of delay

    time

    linear

    dela

    y co

    st

    1,2,3,5,8,13,21 1,2,3,5,8,13,21

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2013

    Business Value GameTM

    What is the relative value of these features of a car?1) 30 mpg fuel economy versus 20mpg (Baseline: )2) leather seats3) seating for 7 people (versus 4 people)4) 100,000 mile warranty 5) side curtain airbags

    1 2 3 5 8 13 21

    5

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    Estimate the relative value of projects in a portfolio

    1 2 3 5 8 13 21

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2013

    Process for Business Value Ranking

    1. Stakeholders and Product Owners prepare canvases. Optional: limit number per stakeholder

    2. Review & validate canvases for completeness & understanding - ahead of time

    3. Select appropriate group of voting stakeholders and a neutral facilitator

    4. Brief sales pitch for each project, based on the canvas

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2013

    Process for Business Value Ranking (2)

    6. Choose a baseline project/canvas, assign it a mid-range point value. Can shift up/down later if necessary.

    7. Business Value GameTM,1; assign the relative value of each project, without considering cost/effort (Alternative: Buy a Feature2)

    8. Delivery teams estimate cost/effort. Calculate ROI, or WSJF (weighted shortest job first)3

    9. Prioritize & allocate investments: (1) ROI (WSJF), (2) cost of delay (3) people/resource constraints

    1agile42 2Innovation Games 2Dean Leffingwell: Agile Software Requirements

    WSJF = (UV+CoD+RR|OE)/effort

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    ROI calculation & project priority

    Project Total Value Effort (cost) ROI Priority?

    A 15 3 5B 16 5 3.2C 19 8 2.4D 27 13 2

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    Project User valueRR&OE value

    Time value (CoD)

    CoD profile

    Total Value

    Effort (cost) ROI Priority?

    A 1 1 13 15 3 5B 13 1 2 16 5 3.2C 3 13 3 19 8 2.4D 21 1 5 27 13 2

    *RR: Risk reduction. OE: Opportunity enablement. CoD: Cost of delay

    ROI calculation & project priority

  • agile42 | The Agile Coaching Company www.agile42.com | All rights reserved. Copyright 2007 - 2012.

    Photo: Rory Mizen

    HighestPaidPersonsOpinion

    No HiPPOsallowed

    !

    Brad Swanson, CSC, Senior Agile Coachbrad.swanson@agile42.com @bradswanson

    http://www.agile42.com/en/blog/2013/04/11/lean-project-canvas/