Simplify Project and Portfolio Planning with “Real Options”
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Do you work in an organization that spends too much time budgeting, road mapping, and planning their project roadmap or portfolio? Do you ever feel like all this effort is pointless and wasteful? Do you think perhaps there might be a simpler, more pragmatic way? If so, this session is for you. After a brief overview of necessary strategic and budgetary inputs to an investment-like product portfolio, Matt Barcomb and David Hussman share practical ideas for generating and validating projects as Real Options. You’ll explore how to collaboratively create value models and consider risk to create a lightweight portfolio framework for prioritization and decision-making. Finally, Matt and David will wrap up by embracing the uncertainty of development planning using Starting and Stopping Triggers to begin or terminate a project. Ask them your questions on simplifying portfolio planning, and leave with answers and lightweight practices you can put to work immediately.
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Exploring Wayland: A Modern Display Server for the FutureICS Wayland is revolutionizing the way we interact with graphical interfaces, offering a modern alternative to the X Window System. In this webinar, we’ll delve into the architecture and benefits of Wayland, including its streamlined design, enhanced performance, and improved security features.
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Adobe After Effects is a software application used for creating motion graphics, special effects, and video compositing. It's widely used in TV and film post-production, as well as for creating visuals for online content, presentations, and more. While it can be used to create basic animations and designs, its primary strength lies in adding visual effects and motion to videos and graphics after they have been edited.
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Simplify Project and Portfolio Planning with “Real Options”
- 1. @mattbarcomb # http://sayat.me/mattbarcomb SIMPLIFY portfolio & product planning using REAL OPTIONS ! Matt Barcomb
- 2. @mattbarcomb # http://sayat.me/mattbarcomb We need to use a different mental model The language most often used to discuss product development is a very bad fit for what really happens. ! Better language for product development comes from work in areas that most people are not very familiar with.
- 3. @mattbarcomb # http://sayat.me/mattbarcomb Construction Project A very poorly fitting mental model
- 4. @mattbarcomb # http://sayat.me/mattbarcomb Research & Development A much closer fitting mental model
- 5. @mattbarcomb # http://sayat.me/mattbarcomb Create a portfolio for development activities • ID benefit segments • Product lines • Lines of Business • Cost centers • Allocate by capacity • Fill with options
- 6. @mattbarcomb # http://sayat.me/mattbarcomb Fill portfolio segments with development options • Options are: MVPs, features, projects, ideas • Only independent options allow optionality • Options provide benefit that • Options’ benefit may change over time • Never execute an option unless you know why • Execution of a product option takes time
- 7. @mattbarcomb # http://sayat.me/mattbarcomb A development option Value pitch: High-level goals: Obvious dependencies: Starting triggers Stopping triggers Open questions Unvalidated assumptions B-Map Score: Cost Score: B/C ratio: Option Name:
- 8. @mattbarcomb # http://sayat.me/mattbarcomb Development planning should focus primarily on benefit • Benefit vs. value • Value means money, benefit means utility • Benefit better fits non-financial concerns • Relative vs. actual benefit • Benefit can really only be relative • Relative-ize actuals using ranges
- 9. @mattbarcomb # http://sayat.me/mattbarcomb Benefit Map (B-Map) • Mind map of key types of benefit (value) created from doing work on a given product • 2-3 tiers: what, how, in what way? • Expiration date or context • Rank top 5(+/- 2) • Weigh top 5(+/- 2) rounded to nearest 5% • Create a 1 (low) - 5 (high) scoring for each
- 10. @mattbarcomb # http://sayat.me/mattbarcomb Benefit Map (B-Map) Product: Galaxy Revenue Customer Satisfaction Product Adoption Product Awareness Competitiveness Dec. Mktg Costs Sales Reach Brand Awareness1 Expires in March 2 3 4
- 11. @mattbarcomb # http://sayat.me/mattbarcomb A completed B-Map Sales Reach 30% Increase Revenue 10% Decrease Mktg. Costs 15% Product Adoption 45% 1= <1% 5= >15% 1= <$5k 5= >$50k 1= no change 5= very easy 1= <10% of reg. 5= >40% of reg. Options Scores New catalog Student grades 4 3 2 4 1 2 3 1 285 295 Product: Galaxy Revenue Customer Satisfaction Product Adoption Product Awareness Competitiveness Dec. Mktg Costs Sales Reach Brand Awareness 1 Expires in March 2 3 4
- 12. @mattbarcomb # http://sayat.me/mattbarcomb ACTIVITY: Make a B-Map ! $1B to research a futuristic tech ! 1) Identify high-level purpose 2) Use post-its; determine benefits 3) Rank & weigh top 3 4) Create 1(lo)/5(hi) scoring rubric
- 13. @mattbarcomb # http://sayat.me/mattbarcomb Next, consider risk • Identify risks • Risk Snapping • Score 1(lo)/3(hi): likelihood & impact • Use average score of all risks identified • Decide how to consider risk • Multiply with either cost or benefit
- 14. @mattbarcomb # http://sayat.me/mattbarcomb Then, determine triggers • Starting triggers • Should we start? How do we know? • Stopping triggers • Should we keep going? How do we know? • Use triggers, not deadlines!
- 15. @mattbarcomb # http://sayat.me/mattbarcomb Deadlines • Typically artificial • unsubstantiated promises (bonus-driven development) • arbitrary target make real upstream deadlines • Sometimes are real - but often assumed and unvalidated • Seasonality • Government/Business activity date
- 16. @mattbarcomb # http://sayat.me/mattbarcomb Some triggers I've seen • duration • seasonality • stakeholder feedback • govt. policy • major biz activity • competition shift • media/pr event • market shift • technology shift • employee shift • major social incident • better options
- 17. @mattbarcomb # http://sayat.me/mattbarcomb Last, think about cost • Learn just enough about cost to start (or not) • Cost Snapping • 5-step scale (suggest team-months/weeks) • Evens, fibs, quarters • Total Cost mapping (like B-Maps) • Duration, tech debt, stress, complexity, etc…
- 18. @mattbarcomb # http://sayat.me/mattbarcomb What we covered • We do development & design, not construction • A portfolio is a long-term capacity plan • Use the power of options and optionality • Determine benefit first, then risk • Identify & use triggers, not deadlines • Learn just enough about cost to decide to start
- 19. @mattbarcomb # http://sayat.me/mattbarcomb Individual take-aways • What is one thing from today you would like to start doing in the near future? • What would prevent you from doing it? • What would be the very next step? • When will you take that step? • Consider an accountabilibuddy!
- 20. @mattbarcomb # http://sayat.me/mattbarcomb Any questions? Twitter: @mattbarcomb ! Email: [email protected] www.devjam.com