Most organizations approach software development the same as any other project, with a defined start date and end date. But when is a piece of software ever really finished? Updates will always be required, especially if the software is customer-facing and driving real business value.
A better approach is to take a portfolio mindset. Instead of seeing software development as one-off projects, it can help to view them as a portfolio that you analyze and improve constantly. Below, we discuss why this approach is so powerful and how any organization can transition from a project mindset to a portfolio mindset.
What’s the Difference Between a Project Mindset and a Portfolio Mindset?
A project mindset is fixed. Each piece of software is treated as a specific project that has a defined start date and end date. When the software is complete, there’s no reason to work on it further. Because efforts are finite, the success of the tool can be temporary.
When organizations take a portfolio perspective, they treat software development as an ongoing product — each product being one within a much wider portfolio of other products. There’s a start date to every product, but there’s no end date. Each product is constantly evolving and needs ongoing support to continue to deliver value to the business. At the start of every quarter, the software development team can look at their portfolio and plan which products need updating.
The Problems With a Project Mindset
Despite a large number of organizations adopting a project mindset, there are several problems to this approach. The biggest and most obvious issue stems from giving projects a fixed beginning and end time. When a project is labelled finished, work tends to cease immediately, which can harm the product in the long run. All software requires updates if it’s to continue to be useful, which makes an ongoing process necessary.
It’s hard to define when a project is really finished in the first place, writes computer engineer Joaquim Torres. As soon as you put a piece of software in front of users, you’ll get immediate feedback and discover a number of ways to make that software better. Nor is there any reason to end the life of a software, either. “Every software exists to support one or more business processes, to reach certain business objectives while satisfying the needs of its users,” Torres explains. “As long as these processes exist, and the software reaches the business objectives and satisfies the user needs, there’s no reason to end the life of the software.”
Konstantina Ferentinou at Starttech Ventures says project mindset can impact the way your company does business in general. “Everything is viewed from a completely different perspective than required. The bitter truth is that this project-oriented perception is, nine times out of ten, incompatible with the one needed to grow and create value within your new environment. What you need is a philosophy that drives you to be more creative, flexible and focused on your product.”
The Benefits of a Portfolio Mindset
A portfolio mindset solves many of the issues caused by a project mindset. Because there’s no fixed due date, software products can continue to get the attention they need to drive business goals and developers can schedule time to work on them as needed.
A portfolio mindset also keeps teams focused on delivering value, writes John May, an enterprise solutions architect at AgileCraft. “Organizations that focus on defining projects that span more than a year often get stuck in situations where teams are incentivized to meet out-of-date project goals, instead of delivering value early or seeking early feedback on market-fit,” he says. By adopting a portfolio mindset, teams can use shorter feedback loops to deliver incremental improvements over a much longer period of time.
A particular focus is the value to end users. An improvement in customer experience is one of the biggest signs that a team is correctly treating software projects like products, says YouTube’s John Rethans.
“Established companies that want to adopt this focus may need to work hard to rethink their products, processes, and customers experiences from the ‘outside-in,’” Rethans writes. “Rather than relying on internal intuition, aging development roadmaps created months ago, and other ‘inside-out’ mechanisms, these companies let customer feedback and data guide development in real-time.”
Teams can also keep better track of software products with a portfolio mindset. Unlike fixed assets like machinery and equipment, most IT teams can’t produce a list of their most important software assets. By implementing a portfolio approach, IT teams must regularly take stock of their assets, analyze each asset's health and plan any necessary improvements. As a result, companies can start treating the software products like the valuable tools and assets they are.
How To Make the Shift to a Portfolio Mindset
An organization that wants to move from a project-focused mindset to a portfolio mindset can do so by taking the following steps.
Start by establishing a vision, writes Jasmin Iordanidis, a product marketing manager at Easy Agile. That vision should identify your objectives and key results, measurable by key performance indicators.
“Afterwards, establish a project prioritization process,” Iordanidis explains. “Decide what steps you’ll take to determine how well a project aligns with your goals. For example, some businesses may use a scoring model, giving projects numerical scores in key categories until they find the highest averages. Others may simply weigh the costs and benefits of each project with overall business objectives in mind.”
The process of “aligning projects to strategic goals is a core tenant of project portfolio management,” says Grace Windsor, a product manager at project management platform BrightWork. “Applying strategy to project portfolios typically means doing the right projects and doing the projects right,” she adds. “Without a clear ‘big’ picture, it’s too easy to waste time and resources on the wrong projects or to assume all projects are equal and deserve the same support.”
It can also help to ask some “infrequently asked questions,” writes Nicos Kourounakis, a senior consultant on methodologies at the European Commission. These include:
- Are you involving the right people?
- Are people assigned the right responsibilities?
- Have you established stakeholder buy in?
Adopting a portfolio mindset is a straightforward process, but it does take intention and may seem counterintuitive at first. However, organizations that take this approach will quickly reap the rewards that come with it.
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