By: Dennis van der Spoel
Whether you are using a silo or a value stream approach to portfolio management, strategic alignment remains a major challenge. In the silo-oriented project portfolio management-approach, this is often due to segmentation of budgets and accountabilities. In lean-agile product / project portfolio management this is due to the focus on the short-term value of initiatives. In both cases, benefit mapping offers a solution. In silo-based portfolio management, benefit mapping helps to align and prioritize all initiatives across the silos. In lean-agile portfolio management, benefit mapping helps to discover and communicate the near-term business value of potential epics.
The Issues with Portfolio Management when Funding Silos
Every fall the ceremonies to define the organizational and departmental budgets for next year are the same. Each cost-center creates a spreadsheet of their forecast of next year’s income and expenses. Usually, these include revenues, wages, overhead, IT, and training. About 80 percent of the expenses is earmarked for business as usual. About 20 percent is reserved for planned change initiatives. And the total budget should preferably be within a 5 percent deviation from last year’s budget to avoid intense debate.