At this stage of defining and prioritizing components, compare each component
within each work pipeline against one another to derive a sequential order
of desirability, as defined by the portfolio metrics and targets.
A key concept is the notion of a sequential order. As the term
implies, it is critical that the prioritization process results in a list or
queue of approved and ranked components (Forced Ranking). Because the organization does not possess unlimited resources
and capacity, it is highly unlikely that all “desirable” components can be funded.
Some components might show potential contributions when evaluated on their own
but would not be funded or authorized when considering constraints in financial
and human resource capacity.
This prioritization process is also iterative, with loops cycling back to the selection of components task (when
establishing the initial priority for components), as well as loops cycling back from the portfolio optimization
task (as part of balancing and authorizing the portfolio).
The analysis techniques used for this task are often common to those used
for the selection of components, with the difference that they now embed a representation
of the maximum measure (portfolio target and metric) that reflects the constraint
under which the portfolio needs to be optimized.
A corporate strategy definition is used to cover the situation when
strategic changes in the company's environment may impose sudden strategic changes
in the portfolio, such as when the company has to prioritize a certain platform
project to quickly meet strategic moves by a competitor. Changes like these
might overrule some of the portfolio procedures in place that are designed for
portfolio management in a normal business situation. |