Lean Portfolio
Management
Aligning Strategy with Execution
using the Scaled Agile Framework®
SAFe® Course — Attending this course gives students
access to the SAFe Lean Portfolio Management exam and
related preparation materials.
5.1
PROVIDED BY
© Scaled Agile, Inc.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Welcome to the course!
Make the Most of
Your Learning
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Mange your member profile, access videos and training resources, join
Communities of Practice, and more.
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For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
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For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
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For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
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for Continuous Value Flow with SAFe®
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with SAFe® 5 Release Train Engineer Certification
with SAFe® 5 Advanced Scrum Master Certification
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with SAFe® 5 Agile Product Manager Certification
with SAFe® 5 Product Owner / Product Manager Certification
with SAFe® 5 Lean Portfolio Manager Certification
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with SAFe• 5 Program Consultant Certification
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Table of Contents
Privacy Notice.....................................................................................................Page 11
Course Introduction.............................................................................................Page 12
Lesson 1: Introducing Lean Portfolio Management.............................................Page 15
Lesson 2: Establishing Portfolio Strategy and Vision..........................................Page 41
Lesson 3: Realizing Portfolio Vision through Epics.............................................Page 66
Lesson 4: Establishing Investment Funding........................................................Page 86
Lesson 5: Managing Portfolio Flow.....................................................................Page 108
Lesson 6: Applying Agile Portfolio Operations....................................................Page 126
Lesson 7: Applying Lean Governance................................................................Page 140
Lesson 8: Practicing SAFe..................................................................................Page 159
SAFe Glossary....................................................................................................Page 166
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Privacy Notice
Your name, company and email address will be shared with Scaled Agile, Inc. for
course fulfillment, including testing and certification. Your information will be used in
accordance with the Scaled Agile privacy policy available at
https://www.scaledagile.com/privacy-policy/.
Page 11
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lean Portfolio
Management
I
Aligning Strategy with Execution
using the Scaled Agile Framework®
SAFe® Course - Attending this course gives students access to the
SAFe Lean Portfolio Manager exam and related preparation materials.
5.1
~SAFe· scAi:.Eo
AGIL~·
1
© Scaled Agile, Inc.
1
© Scaled Agile, Inc.
Logistics
►
Course meeting times
►
Breaks
►
Facilities
►
Technology requirements
►
Working agreements
SCALED AGILE'"
2
© Scaled Agile, Inc.
Page 12
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Discussion: Introductions
►
Step 1: Introduce yourself to your
break-out group and share
something you know about SAFe
and the role of Lean Portfolio
Management (LPM)
►
Step 2: Be prepared to share with
the class:
Prepare
Share
5
2
– What is your current role?
– What are your expectations for
this class?
SCALED AGILE'"
3
© Scaled Agile, Inc.
Lean Portfolio Management is a two-part course
Lean Portfolio
Management
Getting Started
with LPM
Two Day Course
One Day Workshop
Part One: 2-Day Course
Part Two: 1-Day Optional Workshop
Two-day, interactive course that teaches
the practical tools and techniques
necessary to adopt LPM.
One-day, optional workshop available
to help Enterprise teams get started
with LPM in their organization.
.
SCALED AGILE'"
4
© Scaled Agile, Inc.
Page 13
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Course Outline
►
►
►
►
Lesson 1: Introducing Lean
Portfolio Management
Lesson 2: Establishing Portfolio
Strategy and Vision
Lesson 3: Realizing Portfolio
Vision through Epics
►
Lesson 5: Managing Portfolio Flow
►
Lesson 6: Applying Agile Portfolio
Operations
►
Lesson 7: Applying Lean
Governance
►
Lesson 8: Practicing SAFe
Lesson 4: Establishing Investment
Funding
SCALED AGILE'"
5
© Scaled Agile, Inc.
Duration
Activity: Agility and SAFe Experience
►
5
Step 1: Identify where you are on the Agility
and SAFe Experience Matrix in terms of:
– Experience with Agile
– Existing certification or courses taken
►
Step 2: Identify where your Enterprise is in
terms of the SAFe Implementation
Roadmap
SCALED AGILE'"
6
© Scaled Agile, Inc.
Page 14
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: Welcome to LPM Course
1
http://bit.ly/WelcomeLPM
SCALED AGILE'"
7
© Scaled Agile, Inc.
Lesson 1
Introducing Lean Portfolio Management
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
8
© Scaled Agile, Inc.
Page 15
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson Topics
1.1 Why LPM?
1.2 The Lean-Agile Mindset
and SAFe Principles
1.3 The problem with
project-based accounting
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around value
1.5 SAFe portfolio structure
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1.6 Shift to LPM
9
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson, you should be able to:
►
Explain the need for Lean Portfolio Management
►
Describe the Lean-Agile Mindset and SAFe Principles
►
Recognize the problem of project cost accounting
►
Describe the key benefits of organizing around value
►
Define a SAFe portfolio structure
SCALED AGILE'"
10
© Scaled Agile, Inc.
Page 16
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
1.1 Why LPM?
SCALED AGILE •
11
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Duration
Video: An Introduction to Lean Portfolio Management
6
An Introduction
to Lean~tfolio
Manag~nt
SCALED AGILE~
Provider of SAFe
https://bit.ly/LPM_Introduction
SCALED AGILE'"
12
© Scaled Agile, Inc.
Page 17
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Why Lean Portfolio Management?
►
The LPM function governs each SAFe
portfolio
►
It provides three essential
collaborations to realize its
responsibilities:
Enterprise
Executives
i~~
Business • •/
Owners .._
'
& Enterprise
•
Architect
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1. Strategy and investment funding
2. Agile portfolio operations
3. Lean governance
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LPM is one of the seven core competencies of the Lean Enterprise
►
The LPM competency aligns strategy with execution
by applying Lean and systems thinking approaches
to strategy and investment funding, Agile portfolio
operations, and governance.
►
It’s one of the seven core competencies of the Lean
Enterprise, each of which is essential to achieving
Business Agility.
►
Each core competency is supported by a specific
assessment, which enables the enterprise to assess
their proficiency.
SCALED AGILE'"
14
© Scaled Agile, Inc.
Page 18
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
SAFe portfolio elements
Organlzatlonal
Enterprise
Government
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1.2 The Lean-Agile Mindset and SAFe Principles
SCALED AGILE ·
16
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 19
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: What is a Lean-Agile Mindset?
. .
3
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https://bit.ly/LeanAgileMindset
SCALED AGILE'"
17
© Scaled Agile, Inc.
Two primary aspects of a Lean-Agile Mindset
Thinking Lean with the SAFe House of Lean
Embracing Agility with the Agile Manifesto
We are uncovering better ways of developing software by
doing it and helping others do it. Through this work we
have come to value:
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Customer collaboration over contract negotiation
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LEADERSHIP
SCALED AGILE'"
That is, while there is value in the items on the
right, we value the items on the left more.
18
© Scaled Agile, Inc.
Page 20
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Applying the SAFe Lean-Agile Principles to the portfolio
1-Take an economic view
#
#2-Apply
#3-Assume
systems thinking
variability; preserve options
4-Build incrementally with fast, integrated learning cycles
#
5-Base milestones on objective evaluation of working systems
#
#6-Visualize
and limit WIP, reduce batch sizes, and manage queue lengths
#7-Apply
cadence, synchronize with cross-domain planning
8-Unlock the intrinsic motivation of knowledge workers
#
9-Decentralize decision-making
#
10-Organize around value
#
SCALED AGILE'"
19
© Scaled Agile, Inc.
Principle #1: Take an economic view
Base decisions on economics to
achieve better business outcomes:
►
Deliver early and often
►
Operate within Lean Budgets and
Guardrails
►
Understand economic trade-offs for
Solutions
►
Leverage Suppliers
►
Sequence jobs (Epics) for
maximum benefit
►
Empower local decision-making
SCALED AGILE'"
,
Lean Budgets
Guardrails
Cost of Delay
WSJF=
----
Job Duration
(Job s,ze)
20
© Scaled Agile, Inc.
Page 21
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Principle #5: Base milestones on objective evaluation of working systems
Program Increment (PI) System Demos are orchestrated to deliver objective
progress, product, and process Metrics.
►
►
Build the system in
increments, each of
which is an integration
point that demonstrates
evidence of the
Solution feasibility
Progress
Product
Objectives
Customer
Feedback
I..___
__
I
Product/Solution
Performance
Improvement
Backlog Items
• __
_____.I
System Demo
Milestones based on
objective evaluation of
working systems
SCALED AGILE'"
Process
21
© Scaled Agile, Inc.
Principle #6: Visualize and limit WIP...
Lean Enterprises strive to achieve a continuous flow of value. Three keys to
implementing flow:
►
►
►
Visualize and limit the amount of
work-in-process (WIP) to match
demand to actual capacity.
Reduce the batch sizes of work.
Smaller batches go through the
system faster and with lower
variability.
3
V ®Funnel
■
•
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3
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Reviewing
Analyzing
■
■
■
■
•
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Portfolio Backlog
■ ■
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Done
M VP
IPersevere
■
■ ■
•
Manage queue lengths to decrease
delays, reduce waste, and improve
predictability of outcomes.
SCALED AGILE'"
22
© Scaled Agile, Inc.
Page 22
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Principle #9: Decentralize decision-making
Centralize strategic decisions—those that are infrequent, long lasting, and have
significant economies of scale. Decentralize all others.
Provide clarity on organizational objectives and provide opportunities to exercise
and cultivate decision-making abilities.
Openly discuss how to move authority for decisions closer to where the work is
performed.
Establish a decision-making framework that equips knowledge workers with the
information to make good decisions.
Apply Lean Budget Guardrails to create alignment for decentralized decisions with
the appropriate controls.
SCALED AGILE'"
23
© Scaled Agile, Inc.
1.3 The problem with project-cost accounting
SCALED AGILE •
24
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 23
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Project cost-center budgets create overhead, friction, and lower velocity
CC 3 Effo
rt
CC 4 E
ffort
CC 1
Effort
$
$
$
$
...
Cost center 1
Cost center 3
…
...
Cost center 2
SCALED AGILE'"
----
estimate
......
....__.,,.,....
…
Enterprise
CC 2 Effort
Project cost
Project effort
estimate
Cost center 4
Project
A project requires collaboration of cost
centers, assignment of people, budget,
and schedule. It takes multiple budgets
to build a single project budget.
Result:
►
Slow, complex budgeting process
►
Leads to utilization-based planning and execution
►
Low program throughput
►
Moves the people to the work
25
© Scaled Agile, Inc.
Project overruns cause re-budgeting and increase cost of delay
What/who do we blame?
Project estimate
Planned:
Project
Actual:
Project
▸ Technology
▸ Change
▸ The
challenge?
in scope?
team?
▸ Does
it matter?
Results:
▸ Wait for new budget approval; increase cost of delay (CoD)
▸ Costly variance analysis; blame game; threatens transparency
▸ Resource scramble reassignments
SCALED AGILE'"
26
© Scaled Agile, Inc.
Page 24
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
1.4 Benefits of organizing around value
SCALED AGILE •
27
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Value doesn’t follow functional silos
Value delivery in silos is
inhibited by hand-offs
and delays.
Political boundaries can
prevent cooperation
across silos.
Communication across
silos is difficult.
Management challenge: Connect the silos
SCALED AGILE'"
28
© Scaled Agile, Inc.
Page 25
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Instead, organize the portfolio around value
►
Move from organizing in projects to organizing around the portfolio’s
development Value Streams that create Solutions—products and services—
used by customers.
►
Customers do not buy Features or Capabilities. Rather, they buy wholeproduct Solutions that deliver desired outcomes, which make Solutions one
of the central concepts in SAFe.
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
Development Value Streams
SCALED AGILE'"
29
© Scaled Agile, Inc.
Identify the Development Value Streams within a portfolio
►
Understand how the organization
of Development Value Streams
and Agile Release Trains (ARTs)
impact value delivery
►
Identify Development Value
Streams and ARTs within a
portfolio
►
SAFe® Value Streams and ART
Identification Workshop
This workshop is led by an experienced
SPC who has access to this toolkit in the
SAFe Community Platform
Periodically run the SAFe Value
Stream and ARTs Identification
Workshop to optimize the flow of
value
SCALED AGILE'"
30
© Scaled Agile, Inc.
Page 26
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Development Value Streams are realized by ARTs
►
Agile Release Trains (ARTs) build, support, and maintain Solutions within a
Development Value Stream
►
ARTs contain all the people needed to define, deliver, and operate the Solution
-
Product
Mgmt.
SCALED AGILE'"
Software
Quality
1esting
Compliance Operations
_
31
© Scaled Agile, Inc.
Lean Budgets are not affected by Feature overruns or changing priorities
Planned:
Feature 1
Feature 2
When a Feature takes longer than planned, keep
people working on the right Feature for the right
reasons
Actual:
Feature 2
Feature 1
Delay this Feature
as necessary.
Fixed cost per PI
SCALED AGILE'"
32
© Scaled Agile, Inc.
Page 27
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Value Streams in SAFe
1. Operational Value Streams
The sequence of activities needed to deliver a
product or service to a customer. Examples
include manufacturing a product, admitting
and treating a patient, and delivering a
professional service.
2. Development Value Streams
The sequence of activities needed to convert a
business hypothesis into a technology-enabled
solution that delivers customer value. Examples
include developing a medical device, building a
satellite, and building an eCommerce site.
SCALED AGILE'"
33
© Scaled Agile, Inc.
Discussion: Organizing the portfolio around
value
►
Step 1: Considering the current state of
your portfolio, discuss:
–
–
►
Is your portfolio organized in functional
silos or is it organized around value
using cross-functional teams?
Prepare
Share
5
3
SAFe Portfolio
Strategic
Themes
AGILE RELEASE TRAIN
PB
AGILE RELEASE TRAIN
AGILE RELEASE TRAIN
Do you manage work through projects
or Agile Release Trains, which are
empowered for continuous value flow?
Step 2: Be prepared to share with the
class.
SCALED AGILE'"
34
© Scaled Agile, Inc.
Page 28
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Key benefits to organizing around value
Enables long-lived, stable teams
Enables faster learning and shorter time-to-market
Contributes to higher quality and more productivity
Supports leaner budgeting mechanisms
SCALED AGILE'"
35
© Scaled Agile, Inc.
Activity: Assess current process alignment to
SAFe Lean-Agile Principles
►
►
Step 1: Using the scale,
identify the degree to
which your current
process is aligned with
the SAFe principles
discussed in the class
Step 2: Be prepared to
present to the class
(low)
1
2
3
Prepare
Share
5
5
4
(high)
5
#1 Take an economic view
#5 Base milestones on objective
evaluation of working systems
#6 Visualize and limit WIP, reduce batch
sizes, and manage queue lengths
#9 Decentralize decision-making
#10 Organize around value
SCALED AGILE'"
36
© Scaled Agile, Inc.
Page 29
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Assess current process alignment to SAFe Lean-Agile Principles
(high)
(low)
1
2
3
4
5
Take an economic view
Principle #1
Base milestones on objective
Principle #5
evaluation of working systems
Visualize and limit WIP, reduce
Principle #6
batch sizes, and manage
queue lengths
Decentralize decision-making
Principle #9
Page 30
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
1.5 SAFe portfolio structure
SCALED AGILE •
37
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
What is a SAFe portfolio?
A SAFe portfolio is a collection of Development Value Streams.
►
Each Development Value Stream builds, supports and maintains Solutions
►
Solutions are delivered to the Customer, whether internal or external to the
Enterprise
AG I L E R E L E A S E T R A I N
PB
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
SCALED AGILE'"
38
© Scaled Agile, Inc.
Page 31
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
An Enterprise may have a single portfolio or multiple portfolios
SAFe Portfolio
Small Enterprise
Large Enterprise
SCALED AGILE'"
►
►
Strategic
Themes
AG I L E R E L E A S E T R A I N
PB
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
Single Portfolio
SAFe Portfolio
SAFe Portfolio
SAFe Portfolio
Strategic
Strategic
Themes
Strategic
Themes
Themes
AG I L E R E L E A S E T R A I N
PB
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
PB
PB
AG I L E R E L AG
EAS
NA S E T R A I N
I LEE TRREALIE
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
Single Portfolios
AG I L E R E L E A S E T R A I N
Multiple portfolios
39
© Scaled Agile, Inc.
Activity: Understand your current portfolio
process
►
Step 1: Capture your current portfolio process.
For example:
–
What is the portfolio intake process?
–
How is new work approved and introduced to
teams?
–
►
What challenges do you have with your current
process? For example, are you satisfied with
how quickly you make decisions?
Prepare
Share
20
10
Current LPM process
■
-
I
\
■
■-
Step 2: Be prepared to share with the class.
SCALED AGILE'"
40
© Scaled Agile, Inc.
Page 32
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
1.6 Shift to LPM
SCALED AGILE •
41
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Traditional project portfolio management challenges
Traditional project portfolio approaches inhibit the flow of value because of:
►
Project cost accounting
►
Annual planning and rigid budgeting cycles
►
Perpetual overload of demand versus capacity
►
Phase-gate approval processes that fail to mitigate risk
►
Overly detailed business cases with speculative ROI
SCALED AGILE'"
42
© Scaled Agile, Inc.
Page 33
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Traditional approaches to organizing people vs organizing around value
VS.
People organized in functional silos
Business
Product
Mgmt.
Hardware
Software
Quality
Testing
Compliance
People organized in Value Streams/ARTs
••
Security
UI 1h11
t
•
11
11111
I
t :-
1111
Functional silos inhibit value flow
Traditional project portfolio approaches and
siloed organizational structure inhibit the flow
of value and innovation in the Enterprise.
SCALED AGILE'"
Organizing around value and applying
cadence-based planning aligns all teams
to a shared mission and Vision.
43
© Scaled Agile, Inc.
Project cost accounting vs Lean Budgets and Guardrails
Funding projects
Funding development Value Streams
VS.
....
·
--◄•
PB
Funding work as projects causes friction,
unnecessary overhead, and delays.
SCALED AGILE'"
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
Funding development Value Streams, along
with budget Guardrails, enables faster delivery
while maintaining financial and fitness for use
governance.
44
© Scaled Agile, Inc.
Page 34
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Annual planning and rigid budgeting cycles vs. rolling wave budgeting
VS.
PI Planning
Value
Strategic
Review
Stream Portfolio
2
PI Planning
Value
Stream 1
Participatory Budgeting
Rolling
waveSync
planning
and budgeting
Portfolio
process
Participatory Budgeting
Big up-front annual plan and budget
Ir!i~r.!"1I·•~~~.I
Annual planning
Value
Stream 3
Value
Stream 4
Strategic
Portfolio Review
lJLJO 000
PI 1
Annual planning and rigid budgeting cycles
inhibit the ability to respond to change.
SCALED AGILE'"
PI 2
PI 3
PI 4
Rolling wave planning and dynamically
adjusting budgets enables adapting to change.
45
© Scaled Agile, Inc.
Perpetual overload of demand vs. matching demand to capacity
Unlimited work intake
VS.
Matching demand to capacity
NFRs
Uncontrolled management of demand and
work-in-process (WIP) decreases throughput.
SCALED AGILE'"
Matching the demand to capacity increases
flow through the system.
46
© Scaled Agile, Inc.
Page 35
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Phase-gate approvals vs incremental value delivery
Phase-gated development
VS.
Incremental development
Planned
deployment
Requirements Design
complete
complete
Not enough
time to adjust
False-positive feasibility of initiatives due to
waterfall measures of progress and
phase-gates. Defers learning to the end.
SCALED AGILE'"
Delivers working solutions faster and earlier
than phase-gated approaches. Learning is
continuous and adjustments can be made
incrementally each Iteration.
47
© Scaled Agile, Inc.
Overly detailed business cases vs Lean business cases
Big up-front commitment
Detailed business cases drive over-specificity
and commitment too early in the cone of
uncertainty due to the large effort invested.
SCALED AGILE'"
VS.
Initial commitment limited to MVP
Lean business cases provide just enough detail
to establish viability, a definition of a minimum
viable product (MVP) with a business outcome
hypotheses, and deployment impact.
48
© Scaled Agile, Inc.
Page 36
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Action Plan: Shifting to Lean Portfolio Management
►
Step 1: Consider the topics
discussed in this lesson
►
Step 2: Write three action items you
can take to organize your portfolio
around value and shift towards Lean
Portfolio Management
►
Step 3: Share your insights with the
class
SCALED AGILE'"
5
49
© Scaled Agile, Inc.
SCALED AGILE'"
Page 37
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Action Plan
Shifting to Lean Portfolio
Management
Page 38
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson you:
►
Explained the need for Lean Portfolio Management
►
Described the Lean-Agile Mindset and SAFe Principles
►
Recognized the problem of project cost accounting
►
Described the key benefits of organizing around value
►
Defined a SAFe portfolio structure
50
© Scaled Agile, Inc.
Page 39
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
Page 40
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson 2
Establishing Portfolio
Strategy and Vision
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
1
© Scaled Agile, Inc.
Strategy and investment funding: Collaboration and responsibilities
Strategy and investment funding ensures that the entire portfolio is aligned
and funded to create and maintain the Solutions needed to meet business
targets
Connect the portfolio to Enterprise strategy
Enterprise
Executives
Business
Owners
SCALED AGILE'"
Maintain a portfolio Vision
•
11111
'------'
Enterprise
Architect
Realize portfolio Vision through Epics
Establish Lean Budgets and Guardrails
Establish portfolio flow
2
© Scaled Agile, Inc.
Page 41
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson Topics
Objective
Key Results
2.1 Connecting the
portfolio to the Enterprise
strategy
Enterprise
Executives
&ti
Business • •/
Owners ...
"
a Enterprise
•
Architect
'-.__./
2.2 Maintaining the
portfolio Vision
2.3 Developing the
portfolio Roadmap
APMO
~
Enterprise :
Architect M
~
~
Business
..l. Owners
'-.__./
APMO/LACE
U,
1~1 ~;;
~:~
\___,I
3
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson you should be able to:
►
Construct well-written Strategic Themes
►
Explore a current and a future state of a portfolio
►
Describe the portfolio Roadmap
SCALED AGILE'"
4
© Scaled Agile, Inc.
Page 42
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
2.1 Connecting the portfolio to
Enterprise strategy
SCALED AGILE •
5
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Duration
Video: What is strategy?
9
What is
Strategy?
https://bit.ly/What_is_Strategy
Creative Commons Attribution license (reuse allowed)
SCALED AGILE'"
6
© Scaled Agile, Inc.
Page 43
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Elements of Enterprise strategy formulation
KPIs
Portfolio
context
• Vision
• Mission
• Core values
Enterprise
business
drivers
Financial
goals
SCALED AGILE'"
Lean Budget Guardrails
Portfolio
budgets
Enterprise
Strategy
Formulation
Distinctive
competence
Qualitative data
Strategic
Themes
Competitive
environment
7
© Scaled Agile, Inc.
Strategy development is bi-directional
SAFe Portfolio
Strategic
Themes
Lean Portfolio
Budgets
Strategic Themes and Lean Budgets
are outputs of Enterprise strategy
formulation
SAFe Portfolio
Strategic
Themes
AG I L E R E L E A S E T R A I N
PB
Lean Budgets
AG I L E R E L E A S E T R A I N
AG I L E R E L E A S E T R A I N
Enterprise Strategy
Portfolio Context
• KPIs
• Qualitative data
• Lean Budget Guardrails
The portfolio context is an input to the
evolving Enterprise strategy
SCALED AGILE'"
8
© Scaled Agile, Inc.
Page 44
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Connect the portfolio to the Enterprise with Strategic Themes
Strategic Themes are differentiating business objectives that:
Enterprise
Government
Strategic
Themes
►
Are a collaboration between LPM and the larger Enterprise
►
Drive the future state of a portfolio
►
Connect the Portfolio to the Enterprise strategy
►
Provide context for the Portfolio Vision and Lean budgeting
Good examples of Strategic Themes
(Retail e-commerce):
• Appeal to a younger demographic (18 – 29)
• Reduce warehousing cost by 35%
SCALED AGILE'"
Bad examples of Strategic Themes
• Increase shareholder wealth
• Maximize corporate value
9
© Scaled Agile, Inc.
Describe Strategic Themes with objectives and key results (OKRs)
►
Objectives represent the Strategic Themes (differentiating business objectives) that
drive the future state of a portfolio.
►
Key results must be measurable. Two to five key results per Strategic Theme is
recommended.
Objective
Key Results
Reduce membership churn from 20% to 5%
Increase Net Promoter Score (NPS) from 35 to 60
Increase customer engagement in
our community platform
Improve average weekly visits per active user from
5,000 to 20,000
Increase non-paid (organic) traffic from 1,500 to 5,000
users
Improve engagement from 30% to 60%
SCALED AGILE'"
10
© Scaled Agile, Inc.
Page 45
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Influence of Strategic Themes
Strategic Themes influence portfolio strategy and provide business context for
portfolio decision-making.
Portfolio Vision
E,--:terprise
Government
Portfolio Kanban and Portfolio Backlog
Enterprise Government
····-
·--·--
----+
Strategic
Themes
Vision for Solution, Program, and Team Backlogs
Value Stream Budgets
Investment Horizons Capacity Allocation
Lean Budget Guardrails
Above portfolio
threshold?
SCALED AGILE'"
Approve Significant
Initiatives
© Scaled Agile, Inc.
Business Owner
Engagement
11
Duration
Video: Introduction to Terrific Transport Corporation
2
http://bit.ly/TTCintroduction
SCALED AGILE'"
12
© Scaled Agile, Inc.
Page 46
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Activity: Establish Strategic Themes
►
Prepare
Share
10
5
Step 1: Working in your group, choose at
least one Strategic Theme below for TTC
and identify at least three measurable key
results:
- Expand autonomous delivery into
healthcare
- Expand autonomous delivery into retail
►
Step 2: Be prepared to share with the class.
SCALED AGILE'"
13
© Scaled Agile, Inc.
SCALED AGILE •
Page 47
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Describe a Strategic Theme
Strategic Theme
Key Results
Page 48
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
2.2 Maintaining the Portfolio Vision
14
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 49
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Define the Value Streams and portfolio domain via the portfolio canvas
►
►
►
Describes the Development
Value Streams
Portfolio Canvas
Portfolio Name:
Value Propositions
~
Captures essential
information regarding
partners, activities,
resources, and economics
I!'.
Current and future state
canvases define the
intended Portfolio Vision
...
-
Key Resoun:es
eo. ........
lhePorltolllCmHasis~ITtmlhBDusrie5sNodalC-..(tap:IWwwa&iW1S51WJdelg..Thi5wod<islicen58dlrderhCre,o,eQnwnons~Alike3.01~Lioense.
ati.:wo
.....m).
To.,.,.acopyofthislicensev61:ttt,:/A;:f8111ilecommons.Ol!l,ltonsedby-sa'J.0.
SCALED AGILE'"
15
© Scaled Agile, Inc.
The portfolio canvas is an adaptation of the Business Model Canvas
►
..,
Documents business models of
existing or new products
►
Aligns business and technology to
a common language
►
Provides a shared language to
describe and visualize the current
and future business model
Business Model Canvas
Activities
Value
Proposition
Customer
Relationships
dnwi,,Jilt),.IAM
There is a large body of knowledge about how
to use the Business Model Canvas. You can
refer to: Osterwalder, Alexander,· Pigneur,
Yves. Business Model Generation: A
Handbook for Visionaries, Game Changers,
and Challengers Wiley Kindle Edition
SCALED AGILE'"
16
© Scaled Agile, Inc.
Page 50
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: Understanding the Portfolio Canvas
4
http://bit.ly/UnderstandingPortfolioCanvas
SCALED AGILE'"
17
© Scaled Agile, Inc.
Prepare
Share
10
5
Activity: Understand portfolio canvas structure
►
►
Step 1: Working in your group,
explore the structure of the TTC’s
portfolio by placing each portfolio
item in the correct location.
'9
Step 2: Be prepared to share with
the class
iii
M-,,Act ...lllN
,# R,.,.nuesn ... ,
0
I
0
=~
Autonomous Com..-ci,I o.t ... ryVffidn;
Autonomous Public T,1nspo,t,t,on VehidH
IO
0
1nd in,-•tion
i.b, R.-gul•trOf'I
veh.cl.1 lo, del.....y of com,.,.,aal
good1;Autonornou1whidffbpublic
tr1n1ponationofpeopl1
0
OnlN plarform with eCommerc, c.pabilities;
lntt,~•p,:,withcu1tornii1bl1p,of•,.,,c•1
Eng,ne.,. b<Jlkii~ the SNS toh.rtion on TTCW1b
Se.vices Plnnff Netweri.; Enh1n«d villon system
♦ndi.wr•~~lid.,.
0
O Autoncmou1
Ser,,icecharge; Membetshipwbocnption
04rnll;,,,,,5mill;on
0Loc1lbusirlflsd1lrve,y;localpublic
tranopon,t,on...,..,;u
«:)10Voiceohhecusto..,.,;Se,,.,lce1ubscribe,s
fDTTCWeb~P,rtne,Nei...ork,R.-gioNI
Tr-porta~onTron:litSys«im
1osai.1ndfa.tond.,.,.,nd9,cx;..yO.l,_,.,y;
S.fe..reliable,IHl1nd...:on<>IT'icaltran1pon1uon
withbuik~non-bolrdse<vices
SCALED AGILE'"
'9Avffag,,,profotma,g,n,cust..,._aqu11111oneos1;
Customer retention
18
© Scaled Agile, Inc.
Page 51
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Portfolio Canvas Structure
Portfolio Canvas
Portfolio Name:
Date:
Version:
Value Propositions
Value Streams
Solutions
Customer
Segments
•
Channels
Customer
Relationships
•
Budget
KPIs /
Revenue
-------------------------------------~-------
------
------
---------------------------------------------
------
------
Key Partners
Key Activities
Cost Structure
Key Resources
Revenue Streams
The Portfolio Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com).
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license visit: http://creative commons.org/licensed/by-sa/3.0.
•
•
•
••
•
1
Autonomous Commercial Delivery Vehicles;
Autonomous Public Transportation Vehicles
2
Development and innovation lab; Regulation
and license fees
3
Engineers building the SaaS solution on TTC Web
Services Partner Network; Enhanced vision system
and laser-based lidars
4
Service charge; Membership subscription
5
4 million; 5 million
6
Safe and fast on demand grocery delivery;
Safe, reliable, fast and economical transportation
with built-in on-board services
•
•
•
••
•
7
Autonomous vehicles for delivery of commercial
goods; Autonomous vehicles for public
transportation of people
8
Online platform with eCommerce capabilities;
Interactive app with customizable preferences
9
Local business delivery; local public
transportation service
10
10 Voice of the customer; Service subscribers
11
TTC Web Services Partner Network; Regional
Transportation Transit System
12
Average profit margin, customer aquisition cost;
Customer retention
Page 52
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Portfolio Canvas Structure
Answer Key
Portfolio
Canvas
Portfolio Name:
Date:
Version:
Value Propositions
Value Streams
Solutions
1
Customer
Segments
7
Key Partners
Channels
9
Customer
Relationships
8
Key Activities
•
10
Cost Structure
KPIs /
Revenue
5
12
Key Resources
6
11
Budget
3
Revenue Streams
2
4
The Portfolio Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com).
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license visit: http://creative commons.org/licensed/by-sa/3.0.
•
•
•
••
•
1
Autonomous Commercial Delivery Vehicles;
Autonomous Public Transportation Vehicles
2
Development and innovation lab; Regulation
and license fees
3
Engineers building the SaaS solution on TTC Web
Services Partner Network; Enhanced vision system
and laser-based lidars
4
Service charge; Membership subscription
5
4 million; 5 million
6
Safe and fast on demand grocery delivery;
Safe, reliable, fast and economical transportation
with built-in on-board services
•
•
•
••
•
7
Autonomous vehicles for delivery of commercial
goods; Autonomous vehicles for public
transportation of people
8
Online platform with eCommerce capabilities;
Interactive app with customizable preferences
9
Local business delivery; local public
transportation service
10
10 Voice of the customer; Service subscribers
11
TTC Web Services Partner Network; Regional
Transportation Transit System
12
Average profit margin, customer aquisition cost;
Customer retention
Page 53
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Understand the portfolio’s investment mix by horizon
Horizon 3
Horizon 2
Evaluating
Emerging
,;;;;1
Horizon 1
Investing
Extracting
Horizon 0
Retiring
,;;;;1
,.. l
~
~
~
,;;;;1
,;;;;
~
~
1
.,,,,,,,,
-
Decommission
~
.,.
..,.a\
T
II
81
Decommission
I
I
SCALED AGILE'"
19
© Scaled Agile, Inc.
Identify opportunities for the portfolio’s future state with SWOT
►
►
Establishes an
understanding of the
portfolio’s strengths and
weaknesses
Helps identify the most
significant opportunities
and potential threats
S
...
"§
C:
.;
E
i
O
...
C:
'§
.;
.,
E
jl
Strengths
••••
••
•••
•••
••
Opportunities
W
Weaknesses
••••
•••
•••
•• •
T
Threats
Tip: Start with the external opportunities and threats first
then see what strengths and weaknesses would be
applicable for your context.
SCALED AGILE'"
20
© Scaled Agile, Inc.
Page 54
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
TOWS strategic options matrix
►
►
The key difference between the
SWOT and TOWS analysis are the
outcomes that they create.
TOWS is used primarily for
identifying strategic options to
create a better future state.
External Opportunities (0)
SWOT analysis is a great way to
uncover the current situation of
your value stream, product or
portfolio.
SCALED AGILE'"
1.
2.
2.
3.
3.
4.
4.
so
Internal Strength (S)
How can your
strengths be used
to exploit and
maximize
opportunities?
1.
2.
3.
4.
►
Internal Weaknesses (W)
1.
2.
3.
4.
WO
How can your
opportunities be
leveraged to
overcome
weaknesses?
►
ST
How can you apply
your strengths to
overcome present
and potential
threats?
WT
How can you
minimize
weaknesses and
avoid threats?
21
© Scaled Agile, Inc.
Activity: Identify significant opportunities with
SWOT and TOWS
►
External Threats (T)
1.
Step 1: Working in your group,
perform a SWOT/TOWS analysis
for the TTC portfolio. Start by filling
in the outer box of the templates.
Use the questions in the template
to identify strategic options for
advancing the portfolio.
Prepare
Share
10
5
SWOT I TOWS Analysis
SO: How can your $trenglh$
usod1oo•ploitandrn.n•imizo
opportunitie5?
b,e
ST: H.,.... con you "pply your
s1r<1ng1h~1oovercom<1pr<1s.<1nt
and potential
threats?
WO: How c~n your opportunities
!:!:!',;!~
to overcome
Step 2: Be prepared to share with
the class.
SCALED AGILE'"
22
© Scaled Agile, Inc.
Page 55
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Envision the future state of the portfolio
►
►
--
LPM selects a specific
block in the portfolio
canvas, identifies a
potential change or
opportunity, and then
explores how it impacts the
other parts of the canvas.
--,
-
-I
.
!!I
-~i:
·■ 1:· ·~~ .. -11
..
--
•!!
.. __,! -·····--······---~■ L.
..
..
..
----,-..
---_,J
•••
••• \._.' Ill
••• ~
••• I I
I
---+
---+
Current State
Portfolio Canvas
Alternatives are compared
and agreed upon. LPM
generates the future state
portfolio canvas.
SCALED AGILE'"
.....
__
.......
Future State
Portfolio Canvas
I
Divergent Thinking
BIii
Convergent Thinking
23
© Scaled Agile, Inc.
Express the future state as a Vision
Vision: A postcard from the future
A long view:
►
How will our portfolio offuture solutions
solve the larger customer problems?
►
How will these solutions differentiate
►
What is the future context within which
our solutions will operate?
►
What is our current business context,
and how must we evolve to meet this
future state?
,
,.
,..,.t..,.,,.
>-l",.,;,~•0!.¢0,;,o"'•··
ot.
us?
q..,,_,,..,,.
1,s:V\
wt
""
y,Jt,Yt V\tyt,\
&.
I
I
I
I
I
I
I
~
►
Aspirational,
yet realistic and achievable
►
Motivational
the journey
enough to engage others on
Result: Everyone starts thinking about how to
apply their strengths in order to get there.
Swrtd,: How to Change Things When Change is H,;:1rd,
Heath i;lnd Heath,
Broadway Books, 2010
SCALED AGILE'"
24
© Scaled Agile, Inc.
Page 56
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Activity: Explore possibilities for future states
►
►
Step 1: Working in your group,
develop one potential future state
canvas for TTC using the insights
derived from your TOWS analysis.
Share
10
5
----,-···--_
Step 2: Be prepared to share with
the class.
i
•••
•••
•••1------1
1------1
__1
Current State
Portfolio Canvas
Divergent
Thinking
SCALED AGILE'"
Prepare
Future State
Portfolio Canvas
Convergent
Thinking
25
© Scaled Agile, Inc.
2.3 Developing the portfolio Roadmap
SCALED AGILE •
26
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 57
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Roadmaps guide the organization to realize Strategic Themes
Less
detail
Portfolio Roadmap
Typically, 1- 3+ years
Solution Roadmap
1 – 3 PIs
Current Plan
8 – 12 weeks
Iteration Plan
1 - 2 weeks
1 day
Daily Plan
More
detail
SCALED AGILE'"
PI Roadmap
27
© Scaled Agile, Inc.
Each Solution within a portfolio has its own Roadmap
►
►
A Solution Roadmap is a schedule of events and Milestones that
communicate forecasted Solution deliverables over a planning horizon.
Roadmaps guide the development of the Solution over its natural lifecycle in
alignment with the portfolio Vision.
Autonomous platform
integration with vehicle
Route following and
lane keeping v1.0
◊
01
02
First field
test
On-road testing
certification
◊
◊
◊
03
04
H2
H1
MM◄ m-Mf:MSl%1◄
Y3
Perform Delivery Spike
Terrific Transoport
Delivery Vehicle v1.0
Autonomous
vehicle auto show
◊
Y4
IIWNiMMI
FHll·H:i·h:Mhi
rm-■+MMIGH IMl·WEMffiM
Fi-!:1%HltMMi-!:1%iiWMH:M·%ftt-i:iiiH:IHNMiiii:M@IH:F
MiiME
SCALED AGILE'"
28
© Scaled Agile, Inc.
Page 58
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Portfolio Roadmap offers a comprehensive view across all Value Streams
It integrates various aspects
of lower-level Roadmaps
into a more comprehensive
view, which communicates
the larger picture to the
Enterprise stakeholders.
Portfolio Roadmap
............
♦
r.
rf
Qt
a,
QJ
Q4
♦
■wnw
Forecasted work
in quarters
Doti,_,,
•
vl.0
♦
H2
Ht
mllll!II
MMM
M#MMMM+ll
Solution Roadmap
Tffrillc T,-pon
Vehicle
~Mio,,
"'♦
r ~ ■mmaw+n
SCALED AGILE'"
On-,...d lftdrc
andi...tkffpi,,c
Auwnornous
\lehideA..io
show
♦
Y◄
YJ
W¼H
MiHiM
E-hM
Forecasted work
in half years
Forecasted
work in years
29
© Scaled Agile, Inc.
Forecasting portfolio Epics for roadmapping
Forecasting an Epic’s duration requires an understanding of three data points:
►
An Epic’s estimated size in Story points for each affected ART
►
The historical velocity of the affected ARTs
►
The percent (%) capacity allocation that can be dedicated to working on the
Epic as negotiated between Product and Solution Management, Epic Owners,
and the LPM team
Estimated size range
for each ART's
portion of Epic 1
2000-2500
ART 1
ART2
500- 800
Supplier ART
1500 - 1800
SCALED AGILE'"
■
Available points
for Epic 1
Forecasted # of Pis
•
Negotiated
ART capacity for
Epic 1
(velocity • capacity)
(size I points)
1000
40%
400
5-7
500
25%
125
2-4
500
50%
250
5-6
30
© Scaled Agile, Inc.
Page 59
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Market rhythms help identify valuable release windows
The 'value' is highest
during the high-volume
holiday season.
Q)
:::,
(/)
(/)
Q)
C
.;.; "iii
0
~
.c
Ol
:i:
cu :::,
a.~
E ::::,
-
The 'value' of the release is
relatively constant, meaning
we can release anytime!
Optimal release
window
0
C
0
Q)
:::,
~
~
0
....J
Q1
The 'value' plummets because retailers
'lock down' production environments
and don't want to change their backend
software during the holiday season.
Q4
Time: When should we release?
828 Retail Software
-----,
SCALED AGILE'"
82C Social Media
Toy Maker
© Scaled Agile, Inc.
31
Market milestones also help identify valuable release windows
We want to beat the
competition!
Q)
:::,
~
.c
Ol
(/)
(/)
:i:
Our customers
need time to
prepare
Expected
release by
competitor
We want to
leverage new tech
after it is stable
Q)
,,
C
t, ·oo
Known
change t
riegulati
cu :::,
a_.O
E :5
-o
~
technology
change
Q1
Q2
Q3
Q4
Time: When should we release?
828 Retail Software
-----,
SCALED AGILE'"
--Toy
© Scaled Agile, Inc.
Page 60
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
82C Social Media
Maker
32
Market rhythms and milestones influence roadmaps
•
Influence
•
•
•
1specimens (climes)
A
MMIMEIII
'Ml;1:11¥9:H
fi 111111
Market Rhythms
Al'ltlulll,.,,1-"'t
..,ppljonewnt
•
s.le<tionofmoPlllr-c
softW1re
Radarcompc>Mflts
--~.....
n1uacomm....1t-•on
-
11_
......u,....
Market Events
SCALED AGILE'"
33
© Scaled Agile, Inc.
Activity: Identify market rhythms and milestones
►
Step 1: Working in your group, identify
market rhythms and milestones that
TTC may be able to leverage in the
autonomous delivery vehicle market.
►
Step 2: Be prepared to share with the
class.
SCALED AGILE'"
Prepare
Share
10
5
34
© Scaled Agile, Inc.
Page 61
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson you:
►
Constructed well-written Strategic Themes
►
Explored a current and a future state of a portfolio
►
Described the portfolio Roadmap
SCALED AGILE'"
35
© Scaled Agile, Inc.
----
~ ==
'-J
SCALED AGILE'"
Page 62
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
~
~
~
~
Duration
Action Plan: Establish portfolio strategy and vision
►
Step 1: Consider the topics discussed in
this lesson.
►
Step 2: Identify three action items.
►
Step 3: Share your insights with the class.
5
36
© Scaled Agile, Inc.
Page 63
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Action Plan
Establish Portfolio
Strategy and Vision
Page 64
© SCALED AGILE, INC.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
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For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson 3
Realizing Portfolio Vision
through Epics
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
1
© Scaled Agile, Inc.
Strategy and investment funding: Collaboration and responsibilities
Strategy and investment funding ensures that the entire portfolio is aligned
and funded to create and maintain the Solutions needed to meet business
targets.
Connect the portfolio to Enterprise strategy
Enterprise
Executives
Business
Owners
SCALED AGILE'"
Maintain a portfolio Vision
•
11111
'------'
Enterprise
Architect
Realize portfolio Vision through Epics
Establish Lean Budgets and Guardrails
Establish portfolio flow
2
© Scaled Agile, Inc.
Page 66
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson Topics
3.1 Defining portfolio Epics
Enterprise
Executives
&ti
3.2 Estimating Epic costs
Business • •/
Owners ...
"
a Enterprise
•
Architect
'-.__./
3.3 The SAFe Lean
Startup Cycle
APMO
~
Enterprise :
Architect M
~
~
Business
..l. Owners
'-.__./
APMO/LACE
U,
1~1 ~;;
~:~
\___,I
3
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson you should be able to:
►
Define portfolio Epics
►
Explain how to estimate Epic costs
►
Describe the benefits of the SAFe Lean Startup Cycle
SCALED AGILE'"
4
© Scaled Agile, Inc.
Page 67
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3.1 Defining portfolio Epics
SCALED AGILE .
5
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
What is a portfolio Epic?
►
►
►
An Epic is a significant Solution development
initiative. There are two types:
–
Business Epics directly deliver business
value
–
Enabler Epics support the Architectural
Runway and future business functionality
Portfolio Epics are typically cross-cutting,
typically spanning multiple Value Streams and
PIs.
Epics need a Lean business case, the definition
of a minimum viable product (MVP), an Epic
Owner, and approval by LPM.
SCALED AGILE'"
--- -rz.
-- -----Epic
Enabler
NFRs
Portfolio
Backlog
NFRs
Feature
Feature
Enabler
Feature
Enabler
Enabler
Enabler
Feature
Feature
Feature
Program
Backlog
NFRs
Team
Backlog
Story
Story
Story
Enabler
Story
Story
Enabler
Enabler
Enabler
Story
Story
Story
Story
Story
6
© Scaled Agile, Inc.
Page 68
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Epics are not projects
-:j:.
Epics
•
I
•
Implemented by stable, cross-functional
Value Streams and ARTs.
Implemented by temporary teams, which
disband after work is completed.
No definitive start and end date; scope is
variable. Continue until WSJF says otherwise.
Definitive start and end date; scope is fixed. All
scope must be implemented.
Progress is measured as outcomes against
the benefit hypothesis.
Progress is measured based on task
completion.
Lean Business Case, based on benefit
hypothesis and definition of an MVP.
Overly detailed business case, based on
speculative ROI.
Implementation follows the build - measure learn SAFe Lean Startup Cycle.
Implementation typically follows phasegated, sequential (waterfall) process.
After the Lean Business Case is approved,
commitment is to the evaluation of the MVP.
After business case is approved, up-front
commitment is made to the entire project scope.
SCALED AGILE'"
7
© Scaled Agile, Inc.
Achieve the future state of the portfolio with Epics
Epics are the container for work used to achieve portfolio-level initiatives and are
implemented by ARTs using the SAFe Lean Startup Cycle.
1
Explore possibilities
• '-.'
2
Make decisions
•
-----·
--·
-- ----·
--·
-_./
Current State
Portfolio Canvas
~
Divergent
Thinking
SCALED AGILE'"
3
Identify Epics
1111■ 1111■
---+~-~II1111■
Future
State
~Portfolio Canvas
■qi■ •#@II
Convergent
Thinking
8
© Scaled Agile, Inc.
Page 69
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Decomposing portfolio Epics into program or Solution Epics
Sometimes it’s helpful to split portfolio Epics into program or Solution Epics to facilitate
incremental implementation. In other cases, it’s best to split them directly into Features.
►
Local Epics created by ARTs or Solution Trains may
need LPM visibility and approval
- Epics above the portfolio threshold will need review
- If below the threshold, Epics are managed thorough
Portfolio
Epic
the program or Solution Kanban systems
►
ART 2
Program Epic
ART 3
Program Epic
All Epics require a Lean business case and the
definition of an MVP, regardless of where they were
created
SCALED AGILE'"
ART 1
Enabler Program Epic
and approval through the Portfolio Kanban system
PI
PI
PI
PI
9
© Scaled Agile, Inc.
Epic Owners coordinate Epics through the portfolio Kanban system
They may also have some responsibility for supporting the Epic as it moves
downstream through the Continuous Delivery Pipeline to Release-on-Demand.
Business
Epic
Enabler
Epic
•
Typical Epic Owners for Enabler Epics
Typical Epic Owners for Business Epics
a
II
Product
Mgmt
SCALED AGILE'"
a
II
Solution
Mgmt
System
Arch/Eng
Business
Owners
Solution
Arch/Eng
Enterprise
Architect
10
© Scaled Agile, Inc.
Page 70
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Epic Owners collaborate closely with other groups
They collaboratively define the Epic, MVP, and Lean business case, and—when approved—
facilitate its implementation.
►
Business Owners – Synchronize business
priorities with LPM and ARTs
►
Product and Solution Management – Split
Epics, prioritize business Features and
Capabilities
►
►
Business
Owners
Epic Owners
System Architects and Engineers – Split
Enabler Epics, prioritize Enabler Features and
Capabilities, work with Enterprise Architects to
align with technology standards and Roadmaps
Solution and system
Architects/Engineers
Product and Solution
Management
Agile Teams – Build and test MVPs, implement
additional Features
SCALED AGILE'"
Teams
An Epic Owner can only be effective by
collaborating closely with other groups.
11
© Scaled Agile, Inc.
Epics are initially described with the Epic hypothesis statement
Are described with four major fields:
Epic Hypothesis Statement
FunnelEntryDMe:
►
The value statement – Describes the Epic in
general terms: the “for-who-the …” portion
(DatethattheEplcenteredthefunnel)
Epic Name:
(A short name for the Epic)
E icOwner:
fThe name of the E le Ownerl
Epic Description:
(An elNator pitch-value
statement-that
describes the epic In a clear
andconc!Sl!'way)
►
Business outcomes hypothesis – States
the quantitative or qualitative benefits that the
business can anticipate if the hypothesis is
proven to be correct
For <customers>
who <do something>
the<solution>
lsa<something-the'how'>
that<provldesthlsvalue>
unlike <competitor, cument solutlon or non-existins solution>
our solution <does something better - the 'why'>
►
►
Leading indicators – Describe the early
measures that will help predict the business
outcomes
Nonfunctional requirements (NFRs) –
Identify any NFRs associated with the Epic
Buslneu Outcomu
Hypothesis:
(The mr,asurable benefits that the business can anticipate If the Epic's
lndlna
(The early measures that will help predict the business outcome
Indicators:
Nonfunctional
hypothesis is proven to be correct)
hypothesis. For mon! on this topic, see the Innovation
Accountin1
advanced topic artide)
(The Nonfunctional requirements associated with the epic)
Requirements
(NFRs):
SCALED AGILE'"
12
© Scaled Agile, Inc.
Page 71
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Epics are analyzed and approved using the Lean business case
During the analysis state, the following
activities typically occur:
►
I
SCALED AGILE.
SCALED AGILE.
Identification and review of Solution
alternatives
--
(~-,glheop,c:tt,p<,<he,<1S<-...nt01th.op,c:orudo•••""""'!l1"""'b•dncnpoon<>llhoop,c:.J
t---
--o...c-~•
LoO<iw,y--
10ooa>bo"-lhe""'.-al11\eop,c.,,llbo
_,lo,
►
Definition of the MVP
............
SOll,-;,,ffl<>PP'H'
~n.~--95'11,1<19'/.l'!I,.
(utoblooh.,,_......,~~"'~
~-"'""'-~""
·•~ ..-,.,...,..,~
do<nog<""'""'""-JOd.O)-oolto--1
--
1
►
►
Cost estimates for the MVP and the
anticipated scope of the entire Epic
t---
Presentation of the Lean business case
for a go/no-go decision by LPM
--... ·--(Dooc,;i,,,,ho....,~ondony....,koboff..:tod)
... -·ond"-?
Wholio11\e---onoolutl"""""'ll'"'"'ond-7
(idow,oiy~--.-·•-dof>o,trnoo!~o<c.lh>!w;l"'"Jbo""fN'<'OdhJ'""'"l"Q
Wholb11\e_,...,.....,_....,....._dl~but5on.~ond-?
(Fo,_..,__,,,,,~<lo,,;nbo.,.,po<-..i.-npo<>,,,,.,_lhe.-odu<t•oold.-
__.,
SCALED AGILE'"
....
...
13
© Scaled Agile, Inc.
Epic MVPs promote rapid experimentation and learning
A SAFe minimum viable product (MVP) is an early version of a new product, service, or Solution
that requires the minimum investment necessary to validate the Epic hypothesis.
►
►
►
As opposed to story boards, prototypes, mockups,
and other exploratory techniques, the MVP is an
actual product that can be used by real customers to
generate validated learning.
Build
Lean
Startup
Design
Thinking
It’s helpful to think of the MVP as the smallest portion
of an Epic needed to validate the Epic hypothesis.
This smaller scope enables many low-cost
experiments to be conducted to evaluate the MVP.
Learn
MVP
Measure
MVPs enable faster learning, less risk, better
decisions, and improved time-to-market.
SCALED AGILE'"
14
© Scaled Agile, Inc.
Page 72
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: Establish leading indicators with innovation
accounting
2
https://bit.ly/InnovationAccountingMarcRix
SCALED AGILE'"
15
© Scaled Agile, Inc.
Prepare
Share
10
5
Activity: Describe portfolio Epics
►
Step 1: Working in your group, define
the following Epic for TTC:
- Expand autonomous delivery into the
Epic Hypothesis Statement
FunnelEntryD•t•:
(DatethattheEpkenteredthefunnel)
Epk Name:
(A short name for the Epic)
E kOwner:
Epk Description:
healthcare market segment
►
{Thenameofthl!E
(An ~~;uor
kOwnerl
pitch-value
statement-that
describes the e,pk In a clur
andconcisewav)
who <do somethinp
ths<solution>
Step 2: Be prepared to share with the
class.
ls1<somethin1-the'how' ►
that<providnthisvalue>
unMke<competitor,currentK>lutionornon~~lstlnssolution>
our solution <does somethin1 better - the 'why'>
Business Outcomes
ttypothesls:
ludint
India.ton:
NonfundklMI
CThe measurable ~fits
that the b1alness can antklpate !fthe Epic's
hVPOthes.isisproventobecorrect)
(The urtv mu~rn
that will help predict the business outcome
hVJ)Othe!Js. For more on this topic, SH the IODOY!UOO
&;cpuntlng
advanct'dtapic:artide)
CTtieNonfunctio~I
requirements associated with the epic]
Requirements
INFlb):
SCALED AGILE'"
16
© Scaled Agile, Inc.
Page 73
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Describe Portfolio Epics
Example Epics
Epic: Develop nextgeneration van
hardware to capture
additional data on
van performance
Epic: Maintenance
programs tailored for
each van based on
sensor data
Epic: Automated
electronic inspections
and tracking
Epic Hypothesis Statement
Funnel Entry Date:
<The date that the epic entered the funnel.>
Epic Name:
<A short name for the epic.>
Epic Owner:
<The name of the epic owner.>
<An elevator pitch (value statement) that describes the epic in a clear and concise way.>
For <customers>
who <do something>
Epic Description:
the <solution>
is a <something – the ‘how’>
that <provides this value>
unlike <competitor, current solution or non-existing solution>
our solution <does something better — the ‘why’>
Business Outcomes:
<The measurable benefits that the business can anticipate if the epic hypothesis is proven
to be correct.>
Leading Indicators:
<The early measures that will help predict the business outcome hypothesis. For more on
this topic, see the Innovation Accounting advanced topic article.>
Nonfunctional
Requirements
(NFRs):
<Nonfunctional requirements (NFRs) associated with the epic.>
Page 74
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Describe Portfolio Epics
Epic Hypothesis Statement
Funnel Entry Date:
Epic Name:
Epic Owner:
Epic Description:
Business Outcomes:
Leading Indicators:
Nonfunctional
Requirements
(NFRs):
Page 75
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Prepare
Discussion: Adapting the Lean business case
template
►
Step 1: Working in your group, assess the
Lean business case template:
–
What are some of the main attributes of
the Lean business case?
10
I
LHn Bu11.,..,c.
,....__
.. 1or <•hon name of *J>io
....,,___
~
1eo.-1o,._,
... ....,~-
...... --
·--lo,·--"'"'"--)
_____
--·
..
,
-°"""""'Mypo<-:
►
How would you adapt the Lean business
case template to better fit your business
context?
–
Identify anything in the Lean business
case that you don't understand
Step 2: Be prepared to share with the class.
SCALED AGILE'"
"""'"'-
_lo,......,,..,~_
...._,..,__,,,..,
....--..,,,....._1o,
........
-""°""'
...,..._
(O.,,,,b,o_lho_ol
.... bo
.... _
i..d,,,g--.o1
–
Share
~2s,,.,.........,._~om,s11.u,tt.l"II,,
....
~apha-l0<1,ysol1M
,....__
... -J
---- ____
_
-----~--------.,,.
_____
__
10-,,,,....,
___
...........
~,_.
....
~
..............
_.........,...._......_....,,.
....................
,
,~
.....
....-,
.............
......,.._ ,
.....
_ ..,,..__...,.__,_0n_, ...,,.......,
..-d,...- ...
~
17
© Scaled Agile, Inc.
3.2 Estimating Epic costs
SCALED AGILE •
18
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 76
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Epic estimates include both internal and external costs
►
Large strategic efforts often require
collaboration with external
Suppliers to develop Solutions
►
The MVP and the anticipated full
implementation cost estimates
should include both the internal
costs plus forecasted external
Supplier expenses.
SCALED AGILE'"
19
© Scaled Agile, Inc.
Establishing Epic cost estimates
It's better to be approximately right than precisely wrong. –Warren Buffett
►
T-shirt sizes simplify estimating
Epics in the early stages
Epic T-shirt estimates
V
XXL
►
A cost range is established for each
t-shirt size using historical data
►
The gaps in the cost ranges reflect
the uncertainty of estimates
►
Each portfolio must determine the
relevant cost range for the t-shirt
sizes
SCALED AGILE'"
V
XL
V
V
500K – 800K
M
250K – 400K
S
-
1M – 1.5M
L
qJ
I
2M+
100K – 200K
I
20
© Scaled Agile, Inc.
Page 77
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The Lean business case has two cost elements
►
Anticipated ‘full’ implementation cost
- The estimated cost for implementing the full
anticipated scope of the Epic
- Refined based on the learnings from the MVP
►
MVP cost
- The estimated investment needed to fund the
MVP to validate the Epic hypothesis
- Once approved, this cost is considered a hard
limit, and the value stream will not spend more
than this cost in building and evaluating the MVP
without additional approval from LPM
SCALED AGILE'"
21
© Scaled Agile, Inc.
Estimating Supplier cost with Agile contracts
8
Estimate Epics delivered by Suppliers by applying Agile contracting.
►
►
Agile development requires more
flexible contracts and cost estimate
techniques
•f::"'
SAFeAdvanced Topics
All parties are equally incentivized to
collaborate toward the most costeffective Solution
Agile Contracts Article
'b
https://www.scaledagileframework.com/agile-contracts/
SCALED AGILE'"
22
© Scaled Agile, Inc.
Page 78
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: Estimating Supplier cost with Agile contracts
8
SAFe
ManagedInvestment
Contract
https://bit.ly/AgileContractsSAFe
SCALED AGILE'"
23
© Scaled Agile, Inc.
3.3 The SAFe Lean Startup Cycle
SCALED AGILE •
24
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 79
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Epics are implemented using the SAFe Lean Startup Cycle
What if we found ourselves building something that nobody wanted? In that case, what did it
matter if we did it on time and on budget? —Eric Ries, The Lean Startup
►
The Lean startup process promotes building new
products, services, and Solutions through a
combination of experimentation, iterative releases,
and fast validated learning.
►
Customer feedback is key to the Lean startup
process and ensures that the company does not
invest time designing Solutions that Customers do
not want.
SCALED AGILE'"
25
© Scaled Agile, Inc.
Achieving the Vision with the SAFe Lean Startup Cycle
Apply the SAFe Lean Startup Cycle to create an MVP for Epics to accelerate
learning, accelerate Solution development, and reduce risk.
Create new epic and hypothesis
Portfolio
Kanban
Approved Lean business case
with a defined MVP and
business outcome hypothesis
Build and
evaluate MVP
Epic state: MVP
-
Yes
Hypothesis
proven?
l
Pivot?
No
Yes
Epic state: Portfolio Backlog
Note: Many
experiments are
done here!
No
Stop
Development continues
Epic state: Persevere
or
When portfolio governance no
longer required
Epic state: Done
♦
7
Development stops
Epic state: Done
Continue
until WSJF
determines
otherwise
Local features and
other epic input
Program Kanban systems
SCALED AGILE'"
26
© Scaled Agile, Inc.
Page 80
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lean startup pivot examples
1. Customer segment pivot – The product may prove
popular but not with the user or customer segment
that was initially targeted. The value proposition,
pricing, and channels will need to be revisited.
2. Customer need pivot –The customer is facing a
different problem than what was hypothesized.
3. Value capture pivot – This pivot changes how the
business captures value, typically by charging
customers money.
4. Zoom-in pivot (Feature pivot) – One Feature in the
MVP gets far more traction and interest than all the
others. You can pivot by offering a new product that
offers that one Feature only.
SCALED AGILE'"
Examples
Uber
Twitter
YouTube
Pinterest
Instagram
Starbucks
27
© Scaled Agile, Inc.
Evaluating a potential pivot
►
A pivot doesn't necessarily mean stop; a
pivot means you may have another
another hypothesis worthy of testing.
►
Stakeholders should return to the Lean
business case to help assess the impact
of pivoting.
►
Beware of the sunk cost trap in which
committed stakeholders continue working
on the product even when the data
suggests they should stop.
►
If a pivot is warranted, a new Epic is
created.
SCALED AGILE'"
28
© Scaled Agile, Inc.
Page 81
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Prepare
Share
7
3
Discussion: Exploring pivots
►
►
Step 1: Working as a group, discuss
the four pivots described in this
lesson and identify a situation where
one of them would have been
helpful to make a course correction.
Step 2: Be prepared to share with
the class.
SCALED AGILE'"
Customer
Need
Customer
Segment
Value
Capture
Feature
Pivot
29
© Scaled Agile, Inc.
Duration
Action Plan: Managing innovation
►
Step 1: Reflect on the topics discussed in
this lesson.
►
Step 2: Write three action items you can
take to manage innovation through the
SAFe Lean Startup Cycle.
►
Step 3: Share your insights with the class.
SCALED AGILE'"
5
30
© Scaled Agile, Inc.
Page 82
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Action Plan
Managing Innovation
Page 83
© SCALED AGILE, INC.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson you:
►
Defined portfolio Epics
►
Explained how to estimate Epic costs
►
Described the benefits of the SAFe Lean Startup Cycle
31
© Scaled Agile, Inc.
SCALED AGILE'"
Page 84
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
Page 85
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson 4
Establishing Investment Funding
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
1
© Scaled Agile, Inc.
Strategy and investment funding: Collaboration and responsibilities
Strategy and investment funding ensures that the entire portfolio is aligned
and funded to create and maintain the Solutions needed to meet business
targets
Connect the portfolio to Enterprise strategy
Enterprise
Executives
Business
Owners
SCALED AGILE'"
Maintain a portfolio Vision
•
11111
'------'
Enterprise
Architect
Realize portfolio Vision through Epics
Establish Lean Budgets and Guardrails
Establish portfolio flow
2
© Scaled Agile, Inc.
Page 86
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson Topics
4.1 Lean Budget
Guardrails
Enterprise
Executives
&ti
Business • •/
Owners ...
4.2 LPM events overview
"
a Enterprise
•
Architect
'-.__./
4.3 Strategic Portfolio
Review and Portfolio Sync
4.4 Participatory Budgeting
APMO
~
Enterprise :
Architect M
~
~
Business
..l. Owners
'-.__./
APMO/LACE
U,
1~1 ~;;
~:~
\___,I
3
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson you should be able to:
►
Describe the need for the four Lean Budget Guardrails
►
Explain the purpose of the LPM events
►
Explore how to establish Value Stream budgets
SCALED AGILE'"
4
© Scaled Agile, Inc.
Page 87
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
4.1 Lean Budget Guardrails
SCALED AGILE .
5
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Each portfolio establishes a set of budget Guardrails
Guardrails describe portfolio-level budgeting,
spending, and governance policies that:
Lean Budget Guardrails
1. Ensure the mix of investments balance near-term
opportunities with long-term strategy and growth
2. Balance the backlog of new business Features with
the need to continuously invest in the Architectural
Runway
3. Ensure large, significant investments (Epics) are
approved appropriately
4. Actively engage Business Owners to ensure the
alignment of priorities of the ARTs and portfolio
SCALED AGILE'"
Guiding investments
by horizon
t~
1
,.
Applying capacity
allocation
2
•1:••=
I
Lean Budgets
-
.~1
3
Approving significant
initiatives
>
I M:;.\~j
•••••
4
W
W
S
S
J
J
F
F
Continuous Business
Owner engagement
6
© Scaled Agile, Inc.
Page 88
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Guiding investments by horizons
1
Ensure the mix of investments balance near-term opportunities and long-term
strategy and growth.
Portfolio
Horizon 3
Horizon 2
Horizon 1
Horizon 0
LPM identifies the percentage of
the portfolio budget to be invested
to each horizon.
DECOMMISSION
DECOMMISSIO
N
Development Value Streams
The percentage invested in each
horizon for a Value Stream may
not match the overall portfolio.
Horizon 3
Horizon 2
Horizon 1
Horizon 0
DECOMMISSION
Development Value Stream 1
Development Value Stream 2
DECOMMISSIO
N
SCALED AGILE'"
7
© Scaled Agile, Inc.
Apply capacity allocation to optimize value and Solution integrity
►
►
►
LPM provides a recommended
capacity allocation for new local
Features, local Enablers, Features
from Epics and technical debt and
maintenance across the portfolio
Capacity allocations will
periodically change based on the
portfolio context
Portfolio Capacity Allocation
capacity
allocation
15%
--
Features
10%
Recommended
75%
Enablers
Tech debt
and maintenance
Capacity Allocation
Capacity Allocation
Value Stream Capacity Allocation
The capacity allocation of a given
Value Stream may not match the
recommended capacity allocation
30%
50%
of the portfolio
SCALED AGILE'"
2
20%
--
Features
Features
Enablers
Features
Enablers
TechEnablers
Debt
Tech Debt
and Tech
Maintenance
debt
and Maintenance
and maintenance
8
© Scaled Agile, Inc.
Page 89
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Establish portfolio Epic thresholds
3
This threshold is defined by the LPM function to determine which Epics are a portfolio
concern based on forecasted cost, number of PIs, strategic importance to the portfolio,
or a combination of factors.
Above
[W ]-+~
Identify
significant
initiative
Does it exceed
portfolio
threshold?
Below
SCALED AGILE'"
l
:_..l
Epic requires review and
approval through Portfolio
Kanban system
[@,·
.w
[C0
Epic is managed through
Program/Solution Kanban
~
~
9
© Scaled Agile, Inc.
Continuous Business Owner engagement
►
►
4
Business Owners ensure that:
–
The priorities of the ARTs and Solution Trains
are in alignment with the portfolio
–
Investments are spent on the right things at the
right time
Customer
Product and Solution
Management
Lean Portfolio
Management
Business Owners actively engage by:
Business
Owners
–
Communicating the Portfolio Vision
–
Assisting in the preparation for the upcoming PI
–
Attending PI Planning, reviewing plans and
assigning business value
–
Attending Inspect & Adapt and helping resolve
problems
SCALED AGILE'"
WSJF
L.
•
Ill
•
•
WSJF
L.
•
Ill
10
© Scaled Agile, Inc.
Page 90
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: Business Owners in SAFe
3
Busines ► wners
in SAfe►
SCALED AGILEI
I'·
,·.I
j,--
,·,!',,\I,,
https://bit.ly/BusinessOwnersSAFe
SCALED AGILE'"
11
© Scaled Agile, Inc.
Activity: Establish Lean Budget Guardrails
►
►
Step 1: Working in your group,
establish guardrails for the TTC
Portfolio
Guiding investments
by horizon
Prepare
Share
10
5
Applying capacity
allocation
2
1
Step 2: Be prepared to share with
the class
3
-
Approving
significant initiatives
SCALED AGILE'"
4
Continuous Business
Owner engagement
12
© Scaled Agile, Inc.
Page 91
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
4.2 LPM events overview
SCALED AGILE •
13
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
What are the LPM events?
1.
Strategic Portfolio Review
2.
Portfolio Sync
3.
Participatory Budgeting
Participatory
Budgeting
•
Strategic
Portfolio
Review
Portfolio
Sync
SCALED AGILE'"
Portfollo
Sync
© Scaled Agile, Inc.
□
Portfolio
Sync
Participatory
Budgeting
•
Strategic
Strategic
Portfolio
Portfolio
Review
Review
Portfolio
Portfolio
Sync
Sync
□
Portfolio
Sync
•
Strategic
Portfolio
Review
Portfolio
Sync
Portfolio
Sync
Page 92
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
[
Portfolio
Sync
Strategic
Portfolio
Review
Portfolio
Sync
Portfolio
Sync
14
LPM events overview
Strategic Portfolio Review
•
Focused on achieving and
advancing the Portfolio
Vision
•
Provides continuous
strategy, implementation,
and budget alignment
•
Typically held on a quarterly
cadence, at least one month
before the next PI Planning
SCALED AGILE'"
Portfolio Sync
Participatory Budgeting
•
Focused on portfolio
operations
• Focused on establishing and
adjusting Lean Budgets
•
Provides visibility into how
well the portfolio is
progressing toward meeting
its objectives
• Provides a forum for
stakeholders to decide how to
invest the portfolio budget
across Solutions and Epics
•
Typically held monthly and
may be replaced on a given
month with the strategic
portfolio review
• Typically held every two PIs
15
© Scaled Agile, Inc.
4.3 Strategic Portfolio Review and Portfolio Sync
SCALED AGILE •
16
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 93
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Example actions and participants for each event
Strategic Portfolio Review
Portfolio Sync
Assess portfolio context
Review in-flight Epics, evaluate MVPs and make
decisions
Maintain Portfolio Vision
Advance Epics through the Kanban system
Review and update Strategic Themes
Address blocks and impediments
Review investment horizons and other Lean Budget
Guardrails
Address cross Value Stream coordination
Review portfolio Metrics and KPIs
Collect portfolio Metrics and Value Stream KPIs
Review portfolio Roadmap
Update the portfolio Roadmap
Required participants: Senior Leaders,
Business Owners, Enterprise Architect, Solution
Portfolio Mgr.
Required participants: Senior leaders, Business
Owners, APMO, LACE
Optional supporting roles: RTEs, Scrum Masters,
Epic Owners
Optional supporting roles: Epic Owners,
Product and Solution Management, RTEs
SCALED AGILE'"
17
© Scaled Agile, Inc.
Strategic portfolio review purpose and agenda
►
►
Enables senior management to
create, define, and optimize the
portfolio’s solutions that best deliver
the vision, balancing short- and
long-term objectives, risks, and
costs
Each agenda should be specifically
tailored toward the decisions
needed to advance the portfolio
Strategic Portfolio Review:
Example Agenda
• Review the results of MVPs and
determine whether to pivot,
persevere, or stop
• Review the Portfolio Kanban and
Lean business cases and approve
and prioritize Epics
• Maintain the Portfolio Vision and
portfolio canvas
• Update the portfolio context for the
Enterprise
• Review Strategic Themes and
OKRs
SCALED AGILE'"
18
© Scaled Agile, Inc.
Page 94
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Portfolio sync purpose and agenda
The portfolio sync is an LPM event
designed to gain visibility into how well the
portfolio is progressing toward meeting its
strategic objectives
►
Typical topics include reviewing Epic, Value
Stream, and program execution, addressing
cross-product dependencies, and
escalating and removing impediments
►
The portfolio sync is typically held monthly
and may be replaced on a given month with
a strategic portfolio review
►
SCALED AGILE'"
Portfolio Sync: Example Agenda
• Review and action Lean Metrics
• Review Epic and program
execution issues
• Plan for cross Value Stream
dependencies and releases
• Review continuous improvement
backlog and progress
• Summary of decisions
• Questions/discussions
19
© Scaled Agile, Inc.
Discussion: Efficient portfolio sync events
►
►
Prepare
Share
7
3
Step 1: The portfolio sync is intended to
be shorter and more focused than the
strategic portfolio review. Working in
your group, discuss the following:
–
What artifacts are required to ensure
an efficient portfolio sync?
–
What might determine who should
attend a given portfolio sync?
Step 2: Be prepared to share with the
class
SCALED AGILE'"
20
© Scaled Agile, Inc.
Page 95
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Duration
Video: How to Use Participatory Budgeting in SAFe
5
https://bit.ly/SAFePB
SCALED AGILE'"
21
© Scaled Agile, Inc.
4.4 Participatory Budgeting
SCALED AGILE •
22
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 96
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
The Enterprise establishes the total portfolio budget
Each portfolio’s budget is adjusted based on the portfolio context or in response to
significant events:
0
··Changes to
Strategic
Themes
~
~~
Enterprise &
portfolio
performance
Market
changes
f!)J
Internal/external
economic
conditions
\ l I /
Enterprise
Budget adjustment
from Enterprise
+/-X%
SCALED AGILE'"
@)
Product
feedback
=
This is our budgeting starting point.
23
© Scaled Agile, Inc.
Budgets are allocated to development Value Streams to develop Solutions
Each development Value Stream develops one or more Solutions
10M
Lean Budgets
18M
Guardrails
Total portfolio budget: 28M
SCALED AGILE'"
24
© Scaled Agile, Inc.
Page 97
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Establish Value Stream budgets with participatory budgeting
►
Most organizations will generate
more good ideas than they can
fund, resulting in a portfolio
prioritization challenge
►
LPM and participants from different
Value Streams use participatory
budgeting to collaboratively
establish and adjust Value Stream
budgets
SCALED AGILE'"
25
© Scaled Agile, Inc.
Value Stream budgets are inclusive
‘Run the Business’
‘Grow the Business’
Proposed Solution
Initiatives
(PSIs)
Baseline
Solution Investments
(BSIs)
Includes Features, Capabilities and Epics
below the Portfolio Epic threshold
SCALED AGILE'"
Includes program, Solution and portfolio
Epics above the Portfolio Epic threshold
26
© Scaled Agile, Inc.
Page 98
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Value Stream budgets are adjusted over time
►
Typically, Value Stream budgets are adjusted twice annually
►
Adjusted less frequently and spending is fixed for too long, and it may limit agility
►
Adjusted more frequently and planning may be more challenging
Lean Budgets
Lean Portfolio
Management
•
•
•
•
SCALED AGILE'"
.
Value Stream 1
'
.
.
Value Stream 2
• ••
.
'
_.
.
.
'
PI 1
PI 2
....
.
.
.
Value Stream 4
.
.
~
~
Value Stream 3
_...
....
_,.
_,.
PI 3
PI 4
27
© Scaled Agile, Inc.
Participatory budgeting overview
Total Portfolio Budget
and Guardrails
Baseline
Solution
Investments
(BSIs)
‘Run the Business’
Proposed
Solution
Initiatives
(PSIs)
‘Grow the Business’
Business Context
•
ValueStream1
eva1ue~1
•
Valuestream2
eva1ueStran2
•
Valuestream3
eva1ue~3
•
ValueStream4
•
Current Value Stream Budgets
...
Value:su-t,4
New Value Stream Budgets
Participatory Budgeting Forums
SCALED AGILE'"
28
© Scaled Agile, Inc.
Page 99
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Running a participatory budgeting event
Participatory budgeting is a significant event that requires preparation, coordination,
and communication.
2
1
4
Assemble the
participants
3
Prepare the
content
SCALED AGILE'"
Conduct the
forums
Analyze
results
29
© Scaled Agile, Inc.
Prepare the content
1
The LPM Execution toolkit provides additional guidance for the participatory budgeting
event preparation.
Participatory Budgeting Guide
LPM Execution Toolkit
Guidance for preparing
the business context
Includes: Guidance, Templates,
Workbooks, Calendars, Agendas, and
Videos on the following topics:
•
•
•
•
Templates for Portfolio and
Value Stream Epics’ cost
estimates
Implementing Lean Portfolio Management
Strategy and Investment Funding
Portfolio Operations
Lean Governance
SCALED AGILE'"
Guidance for estimating
Solution cost
30
© Scaled Agile, Inc.
Page 100
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Assemble the participants
2
►
Organize participants into groups of five to eight people
►
Ensure each group has participants from different Value Streams
►
Try to include a mix of roles in each group
Example
The LPM team wants to gather data from 40 leaders and stakeholders.
The group is organized into five 8–person groups.
SCALED AGILE'"
31
© Scaled Agile, Inc.
Conduct the event
3
►
Each group is given the total portfolio
budget equally divided among the
participants
►
Each group collaboratively funds the
Solution investments
►
Partially funded Solutions and Epics are
candidates for termination or negotiation
Each person gets 3.5M
28M
28M
28M
SCALED AGILE'"
32
© Scaled Agile, Inc.
Page 101
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Analyze results
4
Fully funded by all groups
We fund all
of these.
The channel maJ18!1e01ef!t
solution assists the bank in acquinng
newloan
customers.
Partially funded by some groups
Theloanorig.nabOnsolubOns.upportSlhesystemsby-..tiietlabo<rowerappl,M
::,:;~~~usesmulliple&OUl'llHoldatlandvariousstrategicpa';':-~~•:'.'"""~•=~TI~~~~~~
Thec:on~banking$Olull0npi'O\'ide'$eheekingand"9V1ngs,ac:countt;tobankeu
We fund some of these;
the rest are cut.
Exlendlheloanorig,nalionsoluliontoallowloraF..eebooklog1n
Continuelhere..arc:hileetur,otlhec:orebankingapplic:alion
This epic is special, it had
overwhelming support for
partial funding, suggesting it's
estimated cost was too high.
It might be funded at a lower
amount or reduced scope.
Special case
Thisbusinesstpicisdestgned1ocrea1enewchannel.loanorignation,andaedilsooringsolution1loalign
provicling loan p,oduetslolheeollege
student markel
wilhlhestrat&gicthemtol
This•nableftpicisdesigoedtoallgnAI.Lollhevalue1treamsuHJ1nlerlace<1eve1<1pme,n1toFlulleJ,
start,ngwilhlheloanoriginabOnsystem.
Adopt Puppet
Thisenablerepicisdeslgnedtoimprovelheabilitylor1heARTs1omanagelheDevSecOpsinlras1rUC1Ure.
This1ndudeslrainlng loralteams
in the Portfoll0kt0$Sal
value streams.
newollenng from a Supplier Iha! uses advanced OCR
technology to automaticallyverify documenb ,.,bm,lled dunng the loan applicationprocess
This enabler epic will venty lhe ,.,ilabihfy ol a
lnHcureCrtdlt
System
T'-busrlessepieoornpleleslhedtc:ommiss,on,ngollheaed11systembym,g,atnglhelaslollhe
historical data from the old ltgKy 1yslem into the new data tak,.
Little or no funding support
SCALED AGILE'"
33
© Scaled Agile, Inc.
Adjust Value Stream budgets after analyzing results
►
LPM finalizes the adjustments needed to development Value Stream budgets
►
LPM verifies that the investments are aligned with the budget Guardrails
►
Total portfolio budget remains the same
28M Total
28M Total
10M
13M
18M
15M
Total Portfolio
Budget
Total Portfolio
Budget
Development Value Stream budgets
SCALED AGILE"
34
© Scaled Agile, Inc.
Page 102
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Implement the budget changes
►
Value Streams are reorganized to align with the
new budgets as needed. These are typically
virtual changes, not functional changes
►
Organizational changes are coordinated with
HR, legal, finance, and functional managers as
needed
►
LPM works with key leaders to communicate and
implement the change and to update the
backlogs
SCALED AGILE'"
35
© Scaled Agile, Inc.
Benefits of participatory budgeting
►
It helps ensure that empowered Value Stream
stakeholders are making the best possible
decisions
►
Resulting Value Stream budgets are more
realistic and more achievable than those
imposed top-down
►
More ownership improves morale and typically
results in greater efforts by employees to
achieve what they forecasted
►
It achieves better agreement and buy-in to the
funding of each Value Stream
SCALED AGILE'"
• •
•
36
© Scaled Agile, Inc.
Page 103
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Prepare
Share
30
10
Activity: Participatory Budgeting event
►
Step 1: Working in your group, use the
Participatory Budgeting spreadsheet to
conduct a Participatory Budgeting event
simulation for TTC
►
Step 2: Be prepared to reflect with the class on
some key insights from the event
SCALED AGILE'"
Participatory Budgeting Forum
-- 37
© Scaled Agile, Inc.
Duration
Action Plan: Establishing Investment Funding
►
Step 1: Reflect on the topics we
discussed in this lesson
►
Step 2: Write three improvement
items you can take regarding
investment funding
►
Step 3: Share your insights with
the class
SCALED AGILE'"
5
38
© Scaled Agile, Inc.
Page 104
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Action Plan
Establishing Investment
Funding
Page 105
© SCALED AGILE, INC.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson you:
►
Described the need for the four Lean Budget Guardrails
►
Explained the purpose of the LPM events
►
Explored how to establish Value Stream budgets
SCALED AGILE'"
39
© Scaled Agile, Inc.
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Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
Page 107
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Lesson 5
Managing Portfolio Flow
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
1
© Scaled Agile, Inc.
Strategy and investment funding: Collaboration and responsibilities
Strategy and investment funding ensures that the entire portfolio is aligned
and funded to create and maintain the Solutions needed to meet business
targets.
Connect the portfolio to Enterprise strategy
Enterprise
Executives
Business
Owners
SCALED AGILE'"
Maintain a portfolio Vision
•
11111
'------'
Enterprise
Architect
Realize portfolio Vision through Epics
Establish Lean Budgets and Guardrails
Establish portfolio flow
2
© Scaled Agile, Inc.
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Lesson Topics
Strategy
& Investment Key
Funding
Objective
5.1 Establishing flow with
the Portfolio Kanban
Results
Enterprise
Executives
.1
&ti
Business • •/
Owners ...
5.2 Sequencing Epics for
implementation using
WSJF
,
"
Gover~:nc,
Lea~
a
•
Enterprise
Architect
'-.__./
I
~ile
,.
r:n~~olio
Operations
APMO
~
Enterprise :
Architect M
~
~
Business
..l. Owners
'-.__./
APMO/LACE
1~1~;; ~:~
\___,I
U,
3
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson you should be able to:
►
Explain the value of portfolio flow
►
Define the steps in a Portfolio Kanban
►
Explain how to sequence Epics with weighted shortest job first (WSJF)
SCALED AGILE'"
4
© Scaled Agile, Inc.
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5.1 Establishing flow with the Portfolio Kanban
SCALED AGILE .
5
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Understand how Kanban works
►
►
►
►
Visual tool for monitoring and
managing workflow
Columns represent process
states; numbers above the
columns are work-in-process
(WIP) limits
Explicit process policies define
how and when work moves
across the board
WIP limits promote faster flow
and the continuous delivery of
value
SCALED AGILE'"
3
V
®-
Funnel
Reviewing
3
j\/'
Analyzing
Ii
Portfolio
Backlog
E~
Implementing
8
Done
•• • • • • • •
•• • •• • •
...
MVP
IPersevere
Epics are ‘pulled’ across the Kanban board as WIP limits and
other policies permit.
6
© Scaled Agile, Inc.
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Portfolio Kanban benefits
The Portfolio Kanban provides a transparent and quantitative basis for economic
decision-making.
Makes the largest
business and technical
initiatives visible
WIP limits ensure that teams
review and analyze responsibly,
preventing unrealistic
expectations
Funnel
Helps drive collaboration
among key stakeholders
3
3
Review
Analyzing
Portfolio Backlog Implementing
Brings structure to
Epic analysis and
go/no-go decision
SCALED AGILE'"
Done
Transparency in
evaluating the business
outcome hypothesis
7
© Scaled Agile, Inc.
Epics flow through the Portfolio Kanban
The Portfolio Kanban system describes the process states that an Epic goes
through from the funnel to done.
Ii
Funnel
Reviewing
All big ideas are
captured, such as:
• New business
opportunities
• Cost savings
• Marketplace changes
• Mergers and
acquisitions
• Problems with
existing Solutions
• Refine
understanding of
the Epic
• Create the Epic
hypothesis
statement
• Preliminary cost
estimates and
WSJF
• WIP limited
Pull when an
Epic Owner is
available
SCALED AGILE'"
Analyzing
• Solution
alternatives
• Refined cost
estimates and
WSJF
• Define MVP
Portfolio
8
Backlog
• Epics
approved by
LPM
• Sequenced
using WSJF
• Create Lean
business
case
Implementing
r
MVP
• Build and
evaluate MVP
• Pivot or
persevere
decision made
• Pulled by teams
• Go/no-go decision
• WIP limited
Pull when an Epic
Owner has
capacity
Pull when
approved by
LPM
Pull when train
capacity and
budget available
\..
Done
'I
Persevere
• Affected ARTs
or Solution
Trains reserve
capacity for the
Epic
• Done when LPM
governance is no
longer required
• Continue
Feature
implementation
until WSJF
determines
otherwise
Pull when MVP
hypothesis
proven true
~
Pull when Epic is
no longer a
portfolio concern
8
© Scaled Agile, Inc.
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Funnel is used for intake of new Epics
►
►
All big ideas are welcomed:
–
New business opportunities
–
Cost savings
–
Problems with existing
Solutions
–
Marketplace changes
–
Mergers and acquisitions
The Portfolio Vision, Roadmap, and future state portfolio canvas
Only potential Epics should
go in the funnel; it’s not a
central intake for all work
SCALED AGILE'"
Portfolio
Vision
···---···
-•,==11··
--
Current State
Portfolio Canvas
Portfolio
Roadm ap
~-■■,'
-'-+-
1111
-•••
Future State
Portfolio Canvas
Solution
Vision
'·11111m
Solution
Roadm ap
9
© Scaled Agile, Inc.
Reviewing is where stakeholders agree on the Epic’s intent and definition
Epics that exceed the Epic threshold
criteria are pulled into the reviewing
state when WIP limits permit
►
Epic Hypothesis Statement
F11nnelEntry Date:
<The date that the epic entered the funnel.>
Epic Name:
<A short name for the epic.>
Epic Owner:
<The name of the epic owner.>
Epic DHcription:
<An elevator pitch (value statement) that describes the epic in a
clear and conciseway.>
Refine understanding
For <customers>
who <do something>
►
Create Epic hypothesis statement
►
Preliminary cost estimates and
weighted shortest job first (WSJF)
the <solution>
is a <something - the 'how'>
that<providesthisvalue>
unlike <comµE1titor, current solution or non-existing solution>
our solution <does something better - the 'why'>
BuslneH Outcomes:
<The measurable benefits that the business can anticipate if the
epic hypothesis is proven to be correct.>
►
WIP limited
Le11dlng
Indicators:
Nonfunctional
<The early measures that will help predict the business outcome
hypothesis. For more on this topic, see the Innovation Accounting
advanced topic article.>
<Nonfunctional requirements (NFRs) associated with the epic.>
R■ quirements
(NFR1):
SCALED AGILE'"
10
© Scaled Agile, Inc.
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Analyzing is for Epics that deserve more rigorous analysis and investment
An Epic Owner assembles the group of
stakeholders who will help analyze the
Epic. Activities in this stage include:
►
Identify Solution alternatives
►
Define MVP
►
Business
Owners
...
Create Lean business case
✓
Epic Owners
1111
►
Refine cost estimates and WSJF
►
WIP limited
►
Go/no-go decision
SCALED AGILE'"
Team
Solution and Product
Management
Solution and System
Arch/Eng
11
© Scaled Agile, Inc.
Portfolio Backlog holds Epics approved for implementation
►
Epics approved by LPM are maintained in the Portfolio Backlog
►
They are sequenced using WSJF
E·ll11
n-1111
E·ll11
E·ll11
n-1111
EMiii
Participatory Budgeting
~
t
*
''-
'-
Epics are pulled into the relevant Program
or Solution Backlog
Portfolio Backlog
SCALED AGILE'"
••
----
-
12
© Scaled Agile, Inc.
Page 113
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Implementing is where the MVP for the Epic is defined and built
►
The Epic Owner works with Agile
Teams to begin the activities needed to
develop the MVP and evaluate the
business outcome hypothesis
►
This strategy for implementing Epics
provides the economic and strategic
advantages of a Lean startup by
managing investment and risk
incrementally, while leveraging the flow
and visibility benefits of SAFe
13
© Scaled Agile, Inc.
SCALEDA~G~l~L:1:~·------------
Implementing in the persevere state is done if the Epic hypothesis is proven
When the hypothesis is proven, the Epic moves to the persevere state where the ARTs
continue development of the new offering.
If not proven, there are two main
courses of action:
►
►
Pivot – A structured course
correction designed to test a new
hypothesis
Create new epic and hypothesis
Hypothesis
Proven?
Portfolio Kanban
Build
MVP
Yes
Persevere and
continue
development
Stop – Development of the Epic
stops
-
Yes
No
Pivot?
No
Stop
Development
stops
Continue
until WSJF
determines
otherwise
14
SCALEDAGILE'"© Scaled Agile, Inc.
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Done is when one of the following conditions is met…
►
►
The business
outcome
hypothesis is
proven false
Create new Epic and
hypothesis
Build and
evaluate MVP
Epic state: M VP
Approved Lean business case
with a defined MVP and
business outcome hypothesis
Portfolio
Kanban
SCALED AGILE'"
No
Hypothesis
proven?
Pivot?
l
d
The hypothesis is
proven true and
LPM has
determined that
additional portfolio
governance is no
longer required for
the Epic
---+
Yes
No
Yes
Epic state: Portfolio Backlog
Stop
Development continues
Epic state: Persevere
Note: Many
experiments are
possible here!
or
If portfolio governance is
no longer required
Epic state: Done
7
Development stops
Epic state: Done
Continue
until WSJF
determines otherwise
Local features and
other epic input
Program Kanban systems
15
© Scaled Agile, Inc.
Epic refinement and flow are supported by LPM events and practices
Funnel
Analyzing
Review
•
Implementing & Done
---
SAFe Lean Startup Cycle
All big
ideas are
welcomed
here!
Is this really a
Portfolio Epic?
Backlog
NFRs
Is the Epic aligned to
a Strategic Theme?
Should we approve
the Epic? Is it a good
business decision?
What are the Epic
priorities?
Did we prove the benefit
hypothesis of the MVP?
LPM events and practices that support the Portfolio Kanban
•
Strategic
Portfolio Review
SCALED AGILE'"
Portfolio
Sync
Participatory
Budgeting
Sequence Epics
with WSJF
16
© Scaled Agile, Inc.
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SAFe has multiple, connected Kanban systems to support fast flow
Work originates at all levels of SAFe. It’s not just a top-down system!
Operational Value Streams
..___•_-____;;:i=f=J►
=------'
,omo,,,
)
Some work
originates at
the levels
above.
Some work
is defined
and
managed
locally.
i-----,1
(11111!:•.
iiiiiml.-:..1 _.wwwiiii,ii.mliiiii:"
;:-.
----,+]
Solution Kanbanu,oesoumo,
I
-
Program Kanban
I1I1 Lun Agol•
"'
•
Mndsel
SAF1
Pnnc,pl ■s
]
~
~
•
Team Kanban
•--==)
( ___
0
lmplementat,on
Roadmap
© Scaled Agile, Inc.
ti
_..
SPC
•
Solution
concerns
Program
concerns
►
Step 1: Working in your group,
discuss how would you apply and
evolve a Portfolio Kanban
►
Step 2: Be prepared to share with the
class
Team
concerns
5.1
Discussion: Assessing Portfolio Kanban
design
SCALED AGILE'"
Portfolio
concerns
0
..... ml_. .....
Valuu
•
·.
~
l
-
..
-"
WWW·)
~ .........
----,. (1111!!·
~ ml+
ml+
1- 1 Cor•
SCALED AGILE'"
Portfolio Kanban
17
Prepare
Share
10
5
18
© Scaled Agile, Inc.
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5.2 Sequencing Epics for implementation
using WSJF
SCALED AGILE •
19
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Sequence Epics for optimal economics
►
To apply WSJF, we need to know two things:
1. Cost of delay (CoD): The amount of money lost due to
delaying the delivering of value
2. Duration: The time it takes to deliver the Epic
►
►
Since we don’t know which ARTs are going to do the work
and the timing of the implementation, it’s difficult to know the
Epic’s duration. The cost of an Epic is a generally a good
proxy for duration. Larger Epics typically take longer to deliver
than smaller ones.
Epics that can deliver the most value (or highest CoD) and
are of the shortest duration are selected first for
implementation.
SCALED AGILE'"
Cost of Delay
WSJF =
(Value)
Duration
(Cost)
NFRs
Portfolio Kanban
20
© Scaled Agile, Inc.
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Components of cost of delay
User-Business Value
Time Criticality
Relative value to the
customer or business
• Do they prefer this over
that?
How user/business value
decays over time
• Is there a fixed deadline?
• Revenue impact?
• Potential penalty or other
negative impact?
SCALED AGILE'"
• Will they wait for us or
move to another solution?
• What is the current effect
on customer satisfaction?
Risk Reduction & Opportunity
Enablement (RR&OE)
What else does this do for
our business
• Reduce the risk of this or
future delivery?
• Is there value in the
information we will receive?
• Enable new business
opportunities?
21
© Scaled Agile, Inc.
Calculate WSJF to sequence Epics
►
►
►
Simplify the WSJF math by ‘normalizing’ the
Epic’s cost
To normalize cost, give the lowest cost Epic a
‘1.0,’ then divide the cost of subsequent Epics
by the cost of the first Epic
The WSJF is then calculated as follows:
WSJF =
SCALED AGILE'"
Cost of Delay
(Value)
Example: Normalizing Epic cost
Epic
ID
Epic
Cost
Normalized
Cost
#6
0.5M
1.0
#7
1.5M
3.0
#3
4.6M
9.2
#8
5.6M
11.2
#5
7.2M
14.4
Duration
(Normalized Cost)
22
© Scaled Agile, Inc.
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Time is a key component in determining CoD value
Sometimes missing a market window means an Epic is ‘worthless’!
Optimal
market
High
Value
Value generated
is not zero!
Value generated
plummets when
the market window
is missed!
Low
Value
Q1
Q2
Q3
Q4
Market Rhythms
SCALED AGILE'"
23
© Scaled Agile, Inc.
Enablers support the continuous flow of value
►
The Architectural Runway supports the continuous flow of value through the
Continuous Delivery Pipeline, providing the necessary technical foundation for
developing business initiatives and implementing new Features and or Capabilities.
►
Since the development of new Features and Capabilities consumes the Architectural
Runway, continual investment must be made to extend it by implementing Enablers.
Feature
Feature
Feature
…to support future Features
Enabler Epic
Implemented now…
Architectural Runway
SCALED AGILE'"
24
© Scaled Agile, Inc.
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Calculating WSJF for portfolio Epics
7
►
Determine the normalized cost by giving the lowest cost Epic a 1.0, then divide the cost of
subsequent Epics by the cost of the first Epic. Enter the normalized cost in the Epic Cost column.
►
Calculate the CoD column by adding its three components.
►
Calculate the WSJF column (CoD / Epic Cost).
►
Implement the item with the highest WSJF first.
Single-sign on
5
+
8
+
Move to cloud
3
+
5
+
Mobile first
1
+
1
+
--
---
Example: Normalizing Epic cost
3
1
=
14
/
3.0
=
4.7
3
=
11
/
9.2
=
1.2
5
=
7
/
1.0
=
7.0
Epic
ID
Epic
Cost
Normalized
Cost
#6
0.5M
1.0
#7
1.5M
3.0
#3
4.6M
9.2
#8
5.6M
11.2
#5
7.2M
14.4
Tips:
• Do one column at a time. Start by picking the smallest item in each column and give it a ‘1’
• Determine the numbers for the rest of the items relative to that ‘1’ using this scale (1, 2, 3, 5,
8). Each column must contain at least one ‘1’
SCALED AGILE'"
25
© Scaled Agile, Inc.
Activity: Sequence portfolio Epics
►
Prepare
Share
7
3
Step 1: Working in your group, prioritize three TTC Epics:
- Epic
1: Local farm delivery of produce to supermarkets
(will result in 25% increase in market share) and has an
estimated cost of $5M
- Epic
2: Drone delivery platform
(will enable faster autonomous delivery to all TTC markets)
and has an estimated cost of $500K
- Epic
3: Delivery of contractor supplies
(will result in 10% increase in market share) and has an
estimated cost of $2M
►
Step 2: Be prepared to share with the class
SCALED AGILE'"
26
© Scaled Agile, Inc.
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Prioritize Portfolio Epics
CoD
+ RR I OE value
User-business value + Time criticality
WSJF
Epic Size
Epic Size
Epic
User-business
value
I
Time
criticality
I
+
+
+
+
+
+
RRIOE
value
I
-
CoD
I
•
•
•
•
•
•
Epic
Size
I
WSJF
-
• For the numerator, use Fibonacci relative estimation of the
value components (CoD)
• Collaborate on values one column at a time: start by
picking the smallest item, give it a “1,” and define the rest
relative to it (e.g., 1, 2, 3, 5, 8, 13)
• For the denominator, use the normalized cost of the Epic
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Duration
Action Plan: Managing portfolio flow
►
Step 1: Reflect on the topics
discussed in this lesson
►
Step 2: Write three action items you
can take to manage the portfolio
flow
►
Step 3: Share your insights with the
class
SCALED AGILE'"
5
27
© Scaled Agile, Inc.
SCALED AGILE'"
Page 122
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Action Plan
Managing Portfolio Flow
Page 123
© SCALED AGILE, INC.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson you:
►
Explained the value of portfolio flow
►
Defined the steps in a Portfolio Kanban
►
Explained how to sequence Epics with weighted shortest job first (WSJF)
28
© Scaled Agile, Inc.
Page 124
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Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
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Lesson 6
Applying Agile Portfolio
Operations
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
·
1
© Scaled Agile, Inc.
Agile portfolio operations: Collaboration and responsibilities
Agile portfolio operations coordinates and supports decentralized program
execution, enabling operational excellence.
Coordinate Value Streams
Agile PMO/LACE
RTE and SM
CoP
Support Program Execution
Foster Operational Excellence
SCALED AGILE'"
2
© Scaled Agile, Inc.
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Lesson Topics
6.1 Value Stream
coordination
Enterprise
Executives
&ti
Business • •/
Owners ...
6.2 Supporting program
execution and operational
excellence
"
a Enterprise
•
Architect
'-.__./
APMO
~
Enterprise :
Architect M
~
Business
..l. Owners
'-.__./
3
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson you should be able to:
►
Describe Value Stream coordination
►
Describe the role of the LACE in supporting program execution
►
Discuss the value of the APMO
►
Explain how to use Measure and Grow to improve program execution
SCALED AGILE'"
4
© Scaled Agile, Inc.
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6.1 Value Stream coordination
SCALED AGILE •
5
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Value Stream coordination creates portfolio-level opportunities
►
Although many Value Streams operate
independently, cooperation among a
set of solutions can provide some
portfolio-level capabilities and benefits
that competitors can’t match
►
Lean-Agile leaders seek to make
Value Streams as independent as
possible, while simultaneously
interconnecting and coordinating them
with the Enterprise’s larger purpose
SCALED AGILE'"
6
© Scaled Agile, Inc.
Page 128
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Value Stream coordination overview
•,. ,•
1
Coordination
Roles
~
Epic
Owners
--+
"
,~,&"(.
Enterprise
Architect
Solution
Portfolio Mgmt
APMO
•
5
•r • ~
• I,~•"~•
3
Introducing new
portfolio work
Ensured integration
points
,I.
Enabler
Epic
Epic
Enabler
Epic
Epic
Portfolio Roadmap
\..
© Scaled Agile, Inc.
•
6
~
~
SCALED AGILE'"
4
.
2
t
Apply cadence and
synchronization
Release on
Demand
_;
7
Coordination roles and responsibilities
►
►
►
Solution Portfolio Management has overall
responsibility for guiding a portfolio to a set of
integrated Solutions
The Enterprise Architect provides technical
guidance for the long-term evolution of
technologies and platforms and larger
nonfunctional requirements
:.F'
~
Solution
Enterprise
Architect
•
Portfolio Mgmt.
'~~1./
APMO, RTEs,
STEs
The Agile Program Management Office (APMO)
along with RTEs and STEs support efficient,
decentralized program execution
SCALED AGILE'"
8
© Scaled Agile, Inc.
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Apply cadence and synchronization
►
►
Ideally, align all Value
Streams to a common
cadence
2
Self-Driving Veh·1cIes:
~
Autonomous Publ"ic Transport
Autonomou
Include internal and
external Suppliers
s C ommercial
Vehicles
Courier Vans
Components:
Engine
Brakes
Chassis
H
Transmission
SCALED AGILE'.
9
© Scaled Agile, Inc.
Introducing new portfolio work
►
Epic Owners work with the ART to decompose Epics into Features and
Enablers in advance of the PI that initiates work
►
Epic decomposition can occur during backlog refinement meetings
I
•
Solution Demo
~
Epic Owners
System Demos
''
-•mm ,,, m!!!III
m:mm!l!ll!I
ll'!!!l!l!!I
•
3
... 111111
<CU,.,,.._.,,,---
Approve Epics for
implementation
Split Epics into Features and
Enablers during pre-PI Planning
ARTs implement Features
and Enablers
SCALED AGILE,.===~----------------------------~~
10
© Scaled Agile, Inc.
Page 130
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Ensure integration points
►
Frequent integration and testing
provides fast feedback
Full Solution
Integration
►
Do not let small changes sit idle;
find a way to integrate them with
other changes
►
Economic trade-offs are inevitable
in terms of:
–
Frequency of integration
–
Depth of integration
–
Fidelity of feedback
SCALED AGILE'"
•
4
••
•
Full or Partial Integration
during the PI
•' •' •
_.J
_.J
___
___! ___!
___!
t ___!
11
© Scaled Agile, Inc.
The Portfolio Roadmap offers a comprehensive view across all Value Streams
It integrates various aspects of lower-level Roadmaps into a more comprehensive
view, which communicates the larger picture to the Enterprise stakeholders.
5
Portfolio Roadmap
'"·--··•
•
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a,
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04
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Solution Roadmaps
Forecasted work
in quarters
Forecasted work
in half years
Forecasted
work in years
Solution
SCALED AGILE'"
12
© Scaled Agile, Inc.
Page 131
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Deploying and releasing portfolio work
►
►
A System Team
dedicated to integrating
work across the Value
Streams can be helpful
in coordinating releases
Effective DevSecOps
capabilities promote
Release on Demand
SCALED AGILE'"
r
4
Ensured integration
points
0
Operations
Support
System
Team
t
Release on
Demand
Apply cadence and
synchronization
13
© Scaled Agile, Inc.
Discussion: Releasing value across the
portfolio
►
6
Prepare
Share
5
5
Step 1: Discuss as a group:
- What are the portfolio considerations for releasing value in your
context?
- Do you need additional roles for coordination in your context?
- What Value Streams in your portfolio would be on the same
cadence?
- How do you support independent but aligned releases?
►
Step 2: Be prepared to share with the class
SCALED AGILE'"
14
© Scaled Agile, Inc.
Page 132
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
6.2 Supporting program execution and
operational excellence
SCALED AGILE •
15
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
The function of the Lean-Agile Center of Excellence (LACE)
►
Communicating the business need for
SAFe
►
Integrating SAFe practices and fostering
communities of practice
►
Creating alignment around organizational
changes
►
Providing coaching and training to ART
stakeholders and teams
►
Establishing objective Metrics
►
Facilitating Value Stream identification
workshops
SCALED AGILE'"
The LACE is a small team of people dedicated
to implementing the SAFe Lean-Agile way of
working. They operate as an Agile Team.
16
© Scaled Agile, Inc.
Page 133
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LACE operating models
Centralized
•
►
A single instance of SAFe
with one portfolio
►
Independent units have their own
autonomous SAFe portfolios
►
A small LACE typically serves as
the hub for decentralized spokes
►
Value Streams and ARTs
operate under a common
budget
►
Cross-business unit collaboration
can provide the necessary
knowledge sharing
►
Some core practices are developed
centrally and then shared with
spokes
►
Centralized funding for LACE
personnel, tooling, and
coaching
Decentralized funding for LACE
personnel, tooling, and coaching
►
Centralized funding for hub
personnel and common tooling
►
Decentralized funding for LACE
personnel, tooling, and coaching
Enterprise LACE is funded by the Enterprise
through business unit allocations
SCALED AGILE'"
Local LACE is funded by
the portfolio
Local LACE is funded by the portfolio,
Enterprise LACE is funded centrally
17
© Scaled Agile, Inc.
The APMO supports portfolio operations and program execution
►
Facilitates the portfolio sync
►
Works with the LACE to develop,
harvest, and apply successful
program execution patterns across
the portfolio
►
Facilitates Lean budgeting and
coordinates portfolio governance
►
Fosters decentralized PI Planning
and operational excellence
►
Fosters more Agile contracts and
leaner Supplier and Customer
partnerships
SCALED AGILE'"
Some Enterprises refer to the APMO as a
VMO (Value Management Office)
18
© Scaled Agile, Inc.
Page 134
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Measure and grow to improve LPM competency
►
The LPM self-assessment enables
the Enterprise to assess their
proficiency in this competency and
identify potential areas for
improvement
►
The LPM Grows are a set of
recommended resources and actions
organizations can leverage to create
a learning organization that
innovates and relentlessly improves
Lean Portfolio Mam1gement Self-Assessment
Sttoltffon11--f
LPM: Agile Portfolio Operations
..........
sc_A_L_E_D_A_GI_L_E.
G_m_w_,
________
■
I
SCALED AGILE'"
19
© Scaled Agile, Inc.
Prepare
Share
5
3
Discussion: The role of the LACE and APMO
►
Step 1: Working in your group, discuss how the LACE and the APMO
help your Enterprise achieve its business goals.
►
Step 2: Be prepared to share with the class.
SCALED AGILE'"
20
© Scaled Agile, Inc.
Page 135
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Action Plan: Supporting program execution and
operational excellence
►
Step 1: Reflect on the topics
discussed in this lesson
►
Step 2: Write three action items you
can take to support program
execution and operational
excellence
►
Step 3: Share your insights with the
class
SCALED AGILE'"
Duration
5
21
© Scaled Agile, Inc.
SCALED AGILE'"
Page 136
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Action Plan
Supporting Program
Execution
Page 137
© SCALED AGILE, INC.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson, you:
►
Described Value Stream coordination
►
Described the role of the LACE in supporting program execution
►
Discussed the value of the APMO
►
Explained how to use Measure and Grow to improve program execution
22
© Scaled Agile, Inc.
Page 138
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
Page 139
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson 7
Applying Lean Governance
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
1
© Scaled Agile, Inc.
Lean governance: Collaboration and responsibilities
Lean governance manages spending, audit and compliance, forecasting
expenses, and measurement.
Enterprise
Architect
Business
Owners
•
•
Forecast and budget dynamically
Measure portfolio performance
Coordinate continuous compliance
Agile
PMO/LACE
SCALED AGILE'"
2
© Scaled Agile, Inc.
Page 140
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson Topics
7.1 Measuring LPM
performance
Objective
Key Results
Enterprise
Executives
7.2 Coordinating
compliance
a\,&
Business • •/
Owners ...
a Enterprise
•
Architect
..
•
fl .
7.3 TBM with SAFe
7.4 Agile software
capitalization
7.5 The Getting Started
Workshop
"
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..
.
APMO
"6\
Enterprise :
Architect M
~
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,,,........_,__
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Owners
APMO/LACE
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7.6 Additional LPM
Resources
"
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~~ ~:~
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3
© Scaled Agile, Inc.
Learning objectives
At the end of this lesson you should be able to:
►
Discuss strategies for measuring Lean portfolio performance
►
Explain how to achieve continuous compliance
►
Relate Technology Business Management to SAFe
►
Explore Agile software development capitalization
►
Prepare for the LPM Getting Started Workshop
SCALED AGILE'"
4
© Scaled Agile, Inc.
Page 141
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
7.1 Measuring LPM performance
SCALED AGILE .
5
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Establish LPM Metrics
►
►
Metrics are agreed-upon
measures used to evaluate
how well the organization
is progressing toward
business and technical
objectives
Each portfolio must
establish Metrics to assure
results are continually
improving, while promoting
decentralization of
decision-making
SCALED AGILE'"
Goals
Employee Engagement
Measures
Desired Benefits
Employee surveys; Agile People
Improved employee satisfaction, higher employee
Operations data
engagement, and better business outcomes
Customer Satisfaction
Net Promoter Score (NPS)
Improved customer experiences and loyalty
Partner Health
Partner and vendor surveys
Improved ecosystem relationships
Business Agility
Business Agility self-assessment
Improved ability to respond to market changes,
emerging opportunities and threats
Portfolio Performance
Objectives and Key Results (OKRs);
Better altgnment and improved progress toward the
LPM Self-Assessment
portfolio's strategic themes, and portfolio
performance
Value Stream Performance
Value Stream KPls
Improved performance against the forecasted
business outcomes
Program Predictability
Program predictability measure
Improved actual business value achieved
Time-to-Market
Number of releases; feature cycle time
More frequent releases; faster feature delivery
Relentless
Self-assessments for each level of the
Framework
RelenUess improvement in team, program and
portfolio performance
Defect count and cycle time; support
call volume; escaped defects
Improved customer satisfaction; reduced support call
volume, and lower product development costs
Quality
Improvement
6
© Scaled Agile, Inc.
Page 142
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Development Value Stream KPIs measure portfolio progress
Development Value Stream key performance indicators (KPIs) are the quantifiable measures
used to evaluate how a Value Stream is performing against its forecasted business outcomes.
Strategic Themes
Theme
Value Stream KPIs
create the feedback
loop back to the
portfolio.
#1
Strategic
Themes
#2
Key Result
•
•
•
•
Key result 1
Key result 2
Key result 1
Key result 2
Key result 1
Key result 2
Key result 3
• Key result 4
•
#3
KPIs
KPIs may include
outputs, outcomes,
employee satisfaction,
Agile Team
performance, and
more.
#4
ttttttttt+t
t+ttttttttt
•
•
•
•
Key result 1
Key result 2
Value Stream KPIs
•
•
•
•
a.:a.
llllllll►.
KPI Measure 2
KPI Measure 3
KPI Measure 4
•
KPI Measure 5
•
KPI Measure 1
•
•
•
SCALED AGILE'"
KPI Measure 1
KPI Measure 2
KPI Measure 3
KPI Measure 4
7
© Scaled Agile, Inc.
Example development Value Stream KPIs
Type of Value Stream
Example KPIs
A web service for attracting and retaining users
Support Value Stream for products or services
Product Value Stream
AARRR (also known as ‘pirate metrics’):
Acquisition, Activation, Revenue, Retention,
Referrals
Net Promoter Score (NPS), first response time,
mean time to resolution, customer experience
score, cost per ticket
Units sold, revenue, gross margin, market
share, quality metrics, customer satisfaction,
trends on all
Software or hardware development Value
Stream
Cost vs. budget, predictability, NPS, feature
cycle time, quality, release frequency, horizon
investments, guardrails, leading indicators
Online membership Value Stream
NPS, total members, revenue per member,
active members, feature usage, churn, trends
on all
Professional services delivery Value Stream
NPS, revenue, gross margin, customer
retention, referrals, billable utilization
SCALED AGILE'"
8
© Scaled Agile, Inc.
Page 143
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Create high-impact development Value Stream KPIs
►
Focus on objective, quantitative, and measurable
business outcomes that align with Strategic Themes
and OKRs
►
Four to seven KPIs per Value Stream is typically
sufficient; more is not better
►
Avoid ‘vanity metrics’, which measure internal or
external activities, but do not correlate to desired
business results
SCALED AGILE'"
9
© Scaled Agile, Inc.
Discussion: Measuring LPM performance
►
►
Prepare
Share
7
3
Step 1: Working your group, discuss the following:
–
How do you currently assess the progress of
your portfolio?
–
What is one Metric you might remove? How
might removing it effect operations?
–
What is one Metric you could add? How might
adding it improve operations?
Step 2: Be prepared to share with the class.
SCALED AGILE'"
10
© Scaled Agile, Inc.
Page 144
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
7.2 Coordinating compliance
SCALED AGILE •
11
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Traditional compliance approach
►
Many organizations rely on a comprehensive quality management system
(QMS) that is based on phase-gated development models, which are
intended to reduce risk and ensure compliance
►
Traditional compliance approaches don’t scale, nor do they keep pace with
accelerating time-to-market demands
Inspection does not improve the quality, nor guarantee
quality. Inspection it too late. The quality, good, or bad, is already
in the product. As Harold F. Dodge said You cannot inspect quality
into a product.”
—W. Edwards Deming
12
© Scaled Agile, Inc.
Page 145
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Regulatory and compliance meet Agile
Agile Manifesto
Regulatory and compliance
•
Quality, safety, security, and efficacy
•
Specifications
•
Verification and validation
•
Objective evidence
•
Inspections, audits, and sign-offs
•
Quality management systems (QMS)
•
Metrics: defects, requirements and
code coverage, and traceability
SCALED AGILE'"
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
13
© Scaled Agile, Inc.
Coordinating continuous compliance
A Lean-Agile quality management approach improves quality and makes compliance
more predictable.
Waterfall
Requirements
Design
0
Defer compliance to the
end of Solution
development
Implementation
Verification
Documents
Documents
Unverified System
System
Incremental delivery
b_ b_ b_ b_ b_ b_ b_ b_
SCALED AGILE'"
Validate ongoing
compliance with relevant
standards and regulations
14
© Scaled Agile, Inc.
Page 146
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Improving quality with a Lean approach
4Build the Solution and
compliance incrementally
Traditional
Design
complete
Critical design
complete
Q+iiii::IHil
4Organize for value and
compliance
E·i41i ■
Planned
deployment
i
MMMM
l
HIM
4Build quality and compliance in
4Continually verify and validate
Requirements
complete
Lean
Ill
Quality
Safety
4Release validated Solutions on
demand
✓ Functionaltest
✓ Security test
✓ Pertormance test
•
X
OAtest
Compllancetest
~~Iii
V&V
Security
✓ Fur'lciionaltest
X S8C1Jritytest
✓ Perfonnancetest
✓ OAtest
✓ Compliance test
HIH&Nii@ii
-Mhi!ittiiMM:iii@
SCALED AGILE'"
15
© Scaled Agile, Inc.
For more information on compliance with SAFe
Achieving Regulatory
and Industry Standards
Compliance with the
Scaled Agile FrameworkⓇ
(SAFe Ⓡ )
SCALED AGILE.
Available in the SAFe Community Platform
https://bit.ly/SAFeRegulatoryCompliance
SCALED AGILE'"
16
© Scaled Agile, Inc.
Page 147
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
7.3 TBM with SAFe
SCALED AGILE •
17
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Technology Business Management (TBM)
►
►
Many Enterprises using SAFe have
implemented TBM to provide a standard IT
cost accounting system to understand the
total cost of ownership of Solutions
TBM is a value-management framework
that helps CIOs, CTOs, financial, and
business leaders measure the value IT
brings to the Enterprise
►
It provides a standard way to categorize
and measure IT investments and make
trade decisions
►
For more on how SAFe and TBM work
together, read the white paper
SCALED AGILE'"
20rganlutlonal
Contlnuou5lylmprove
Element$
QPlanand<iovem
0
4Cort
Disciplines
0
""""
M._,
Shape
Business
Vlluefor
Demand
The TBM Framework
20rpnlutlonal
Ch;;an1es
Position for Value
https://bit.ly/SAFeTBM
18
© Scaled Agile, Inc.
Page 148
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
7.4 Agile software capitalization
SCALED AGILE •
19
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Software capitalization in Agile
►
Some organizations capitalize certain costs incurred in the development,
implementation, or purchase of software assets
►
Agile capitalization strategies and practices are fundamentally different from
traditional approaches
►
Explore strategies for Agile software capitalization in this SAFe Advanced
Topic article: https://bit.ly/AgileSoftwareCapitalization
SCALED AGILE'"
20
© Scaled Agile, Inc.
Page 149
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Software capitalization in Agile: Example
Expense
Costs associated with establishing
feasibility of a program, including:
►
Feasibility research and
prototyping
►
Analysis and formulation of
alternatives
►
High-level architectural work in
support of decision-making
►
Training
►
Production maintenance
and support
Capitalize
Costs associated with committed new
projects and upgrades and
enhancements that increase
functionality of existing software
(including major revisions of third-party
products), which may include detailed
design activities for committed new
functionality, including:
►
Salaries
►
Cost of materials
►
Contract labor
►
Burden, including some directly
associated indirect labor, and
interest
Excluded: General and administrative
costs and overhead
Note: The treatment of software costs and potential for capitalization vary by country, industry, and individual
company policy.
SCALED AGILE'" © Scaled Agile, Inc.
21
7.5 The Getting Started Workshop
SCALED AGILE .
22
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 150
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Introduction to the LPM Getting Started Workshop
►
Prepare and create a plan for the
portfolio to successfully adopt and
execute SAFe Lean Portfolio
Management (LPM)
Getting Started with LPM
►
This workshop supports SPCs,
members of the APMO and LACE,
and senior leaders
►
After course completion,
conducting the LPM workshop is
the first step toward adopting the
portfolio
SCALED AGILE'"
One Day Workshop
23
© Scaled Agile, Inc.
Key activities of the LPM Adoption Roadmap
Align
Organize
§ Establish the LPM
team
§ Gain executive buy-in
§ Identify opportunities
for improvement of the
LPM process
§ Agree on the
definition of the
portfolio
§ Capture the
current state of
the portfolio
§ Identify
Strategic
Themes
§ Establish
Portfolio Kanban
§ Define the
Portfolio Vision
§ Schedule LPM
events
§ Identify Epics to
realize the
vision
§ Understand the
Enterprise strategy
SCALED AGILE'"
Strategize
Execute
Govern
§ Establish Agile
PMO and LACE
§ Adopt Lean
Metrics
§ Establish RTE
and Scrum
Master CoPs
§ Establish Value
Stream KPIs
Measure &
Grow
§ Run assessments
to baseline the
current state
§ Learn and act using
the grows for each
LPM dimension
§ Establish Lean
Budgets and
Guardrails
24
© Scaled Agile, Inc.
Page 151
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Discussion: Getting ready for the LPM Getting
Started Workshop
►
►
Prepare
Share
7
3
Step 1: Working in your group, discuss the
following:
-
What research and activities need to be
done prior to the workshop?
-
Who should attend the workshop?
-
When should you conduct the workshop?
Step 2: Be prepared to share with the class
SCALED AGILE'"
25
© Scaled Agile, Inc.
7.6 Additional LPM Resources
SCALED AGILE •
26
Scaled
Agile,
©©Scaled
Agile,
Inc.Inc.
Page 152
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Continue the learning journey in the SAFe Community Platform
...,.SAFe
>l!!!!,o
, • ...,,,,
coMMJNITY
--v
..........
v
c-,v
IHct,v
p-,,,,•v
S......,,,v
Welcome to the SAFe Community
Mar,ageyourC8<1il'alioN,P<81)8relofandtakeaUffll,~lnc:onverHlion1.-..,...anceyour~and.UlltnroughSAFep,otellional~nt'lidloa.
W9nowhaveacu.-coledicw!of--
Your Certifications
■ Yll~loll,wo,lyourremotelrallling ■ m
distribuledSAFe......,1:1
I·' .10ffW.PiiH· · M
-
p,acbce lells.
-
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My Leaming
Acoll&
SAFeVideo5
Community Forums
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watdlvideoalOem■ncayour
OIIUfM
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SAFelumingJOUffl"y
0
MyToolklts&Templates
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MyPro61e&Sattings
Support FAQs
Optw,lodigrtalb■clgeend
templ■ talo,SA.Febaedm
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Cen,llndwhetyou'N~
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Subscribe to Community Updates!
Br-.aUpdeteCharw>ell
No,lhllnks
Trending Video
Introduction
Pl Planning
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to
► ,v
~~
SCALED AGILE'"
'
IP '
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27
© Scaled Agile, Inc.
Special LPM resources for SAFe Enterprise customers
.,,,,,..SAFe coMMuN1rv
Homo
lcom
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Implement v
SAFe ENTERPRISE
Meuuro
Uodert\ilndingleanPortfolioMenagement
-·----·
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Get the keys to unlock agility
https://bit.ly/SAFeEnterprise
Gaiting Started With Implementing Leen PortfolioMIi~!
Traningand€ven1:1Calenda,
_________ ____
__
__
---·- ----·- --·-·-.___
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SCALED AGILE'"
..,.
..,_..,.__
...
----- -----_.__
28
© Scaled Agile, Inc.
Page 153
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Templates and tools from the SAFe Community Platform
►
►
SAFe Community Platform
provides a curated
collection of LPM resources
and templates to support
the LPM team
SAFe Collaborate available on the Community Platform
.M6/SAFe·cou.AeoAAT'E
----
r. ...p1a,"
o
Remotely engage in realtime with SAFe Collaborate
SCALED AGILE'"
29
© Scaled Agile, Inc.
Download the LPM Execution Toolkit from the Community Platform
Toolkits main uses:
• Tip executives and stakeholders to LPM
•
•
Toolkit Contents:
• Introduction to LPM for Executives
• LPM Readiness Workbook
• LPM Adoption Roadmap
• Strategic Themes Template (OKRs)
• SWOT and TOWS Analysis Templates
• Portfolio Canvas Template
• Development Value Stream Canvas
• Epic Hypothesis Statement Template
• Lean Business Case Template
• Portfolio Kanban Exit Criteria
• Lean Budget Guardrails Template
• Participatory Budgeting Guide
• Participatory Budgeting Handouts
• Participatory Budgeting Event Template
• Strategic Portfolio Review
• LPM Events Calendar
• Agile Contracting with SAFe video
• Portfolio Sync
• Forecasting Epics Template
• Compliance White Paper
• CapEx and Op Ex in Agile Development
• TBM White Paper
Assist with conducting LPM activities
Additional learning
SAFe LPM Execution Toolkit
SCALED AGILE.
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30
© Scaled Agile, Inc.
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Learn more about SAFe
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Duration
Action Plan: Measuring Lean portfolio performance
►
Step 1: Reflect on the topics we
discussed in this lesson
►
Step 2: Write three action items you
can take to measure the
performance of the portfolio
►
Step 3: Share your insights with the
class
SCALED AGILE'"
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32
© Scaled Agile, Inc.
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Action Plan
Measuring Lean
Portfolio Performance
Page 156
© SCALED AGILE, INC.
For personal use only - Maria Sette - Aug 12, 2021 (ID:0050W000007dEo3QAE)
Lesson review
In this lesson you:
►
Discussed strategies for measuring Lean portfolio performance
►
Explained how to achieve continuous compliance
►
Related Technology Business Management to SAFe
►
Explored Agile software development capitalization
►
Prepared for the LPM Getting Started Workshop
SCALED AGILE'"
33
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Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
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Lesson 8
Practicing SAFe
SAFe® Course - Attending this course gives students access
to the SAFe® Lean Portfolio Manager exam and related
preparation materials.
SCALED AGIL
.
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© Scaled Agile, Inc.
Duration
Video: SAFe Certification Benefits
3
https://bit.ly/BenefitsSAFeCertification
SCALED AGILE'"
22
© Scaled Agile, Inc.
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A Path Towards Certification
Access exam study guides and practice tests
Download your certificate of course completion
Becoming a
Certified
SAFe
Professional
Take the Certification Exam
Showcase your Digital Badge and get recognized as
Certified SAFe Professional
SCALED AGILE'"
Exam and certification details at:
https://bit.ly/BecomingSAFeAgilist
3
3
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Scaled Agile,
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Duration
Video: Welcome to the SAFe Community Platform
3
https://bit.ly/SAFeCommunityPlatform
SCALED AGILE'"
44
© Scaled Agile, Inc.
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Access tools and resources for your SAFe Practice
and Continue Your Professional Development
SAFe ART and Team Events resources for practicing SAFe
SAFe Community Video Hub
Access on-demand, self-paced, Getting Started e-learning
modules and resources
Your
SAFe
Community
Membership
Organize and run virtual SAFe events in real time with
SAFe Collaborate
Measure Business Agility progress with the SAFe Assessments
Exam and certification details at:
https://bit.ly/BecomingSAFeAgilist
5
5
© Scaled
Scaled Agile,
©
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Team
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ARTTechnical
and TeamAgility
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Use checklists, templates, videos, agendas, toolkits, and more to
support your ART and team events
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Team
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Agility
Community
Video Hub
Access videos to support your learning and grow your skills
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Team
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e-learning
ResourcesAgility
Discover and develop skills through self-paced, interactive
e-learning modules to achieve your personal and
professional goals
Agile Basics
E-learning
What is SAFe for Lean Enterprises
E-learning
SAFe Foundations: Core Values
E-learning
Learn what Agile is, where it comes
Become more familiar with the goals
Build your understanding of the core
from, why it continues to be used and
and methods of SAFe to achieve
values of SAFe and how they are
needed, and how it supports teams and
Business Agility.
applied in practice.
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organizations to do what they do better.
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15 - 30 Minutes
15 - 30 Minutes
88
© Scaled Agile, Inc.
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Team
Technical Agility
SAFe and
Collaborate
Organize and run virtual SAFe events in real time
SAFe Collaborate is a visual, cloud-based workspace where organizations can
orchestrate virtual SAFe events activities easily and effectively with predesigned and
customizable templates.
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Team
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SAFe and
Assessments
Evaluate progress towards business agility with the
SAFe assessments, Measure and Grow workshop
and our assessment partners
Measure and Grow
Workshop Toolkit
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10
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© Scaled Agile, Inc.
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Good luck on your
SAFe Practice
with the
SAFe Community
Platform!
community.scaledagile.com
11
11
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Lesson notes
Enter your notes below:
Reminder: If using a digital workbook, save your PDF often so you don't lose any of your notes.
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SAFe Glossary
~
~
SAFe Glossary:
Visit the Scaled Agile Framework site (scaledagileframework.com/glossary) to
download glossaries translated into other languages
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