Can you explain what portfolio management is and how you think it might fit into product lifecycle management?
Portfolio management is managing the marriage of the set of corporate objectives with the set of project investments. In the product management world, those investments are the products that the company chooses to create and sell. A company has a set of strategic objectives -- branding, revenue, profitability, market share, stock price, etc. The leadership team will have identified a set of investments that they are willing to make in order to achieve those objectives. Each product represents one of those investments and is part of making sure the strategy is cohesive. There are other investments like "open an R&D center in Austin" or "mitigate currency risk by hedging with futures" -- but let's set those aside for the purpose of talking about Agile lifecycle management.
Each product is playing a role, with specific goals and expectations and budget. The portfolio management process focuses on assuring that each product's goals are supporting the corporate objectives, and that each corporate objective is supported by the product goals. Each product team's product management process assures that the product's goals are addressed by the team's requirements and plans, and that the identified requirements support the product's goals.
Agile product lifecycle management focuses on adapting product plans to external changes (markets evolve) and internal changes (schedules slip and accelerate). Those changes require teams to adapt their requirements and execution schedules in order to stay true to the product goals. Portfolio lifecycle management is conceptually the same thing, but on a larger scale. When a product team identifies that they cannot (or should not) adapt to continue to meet the goals for the product, the alternative is to update the goals for the product. When this happens, the corporate strategy team needs to revisit at the portfolio level to determine the impact of updating the goals for that particular product.
Changing the allocation of goals to one product causes a ripple of impact in updating the goals for the rest of the products in the portfolio. Dropping a goal from one product causes you to either (a) add it as a goal for another product, or (b) update the strategy to no longer be dependent on that product-goal. Either of those changes can drive ripples of expectation, prioritization, budgeting and constraints on the other products in the portfolio -- causing each of those teams to revisit their plans. When a company is acting with business agility, these ripples and updates to the plan happen "on demand" instead of at a predefined time (like the annual budgeting cycle). These changes are also expected and relished instead of being unwanted surprises -- because they represent the business "getting smarter" instead of information lying fallow until the next procedural opportunity to put it to use.
This was first published in May 2012