When managing a portfolio of projects or programmes, the scope of the portfolio (and the primary measure of success) is defined by the strategic portfolio outcomes. Under Lean Portfolio Management, a new definition for the scope of the portfolio is required.
The recommendation is that you think of this scope in terms of a customer segment (which customers are we serving) and a customer need (what needs do they have that we’re addressing). The benefits of this are twofold.
Firstly, this roots the purpose in a why rather than a how (such as a solution or a piece of technology). This should enable the portfolio to experiment and be innovative in finding new, more effective, and more cost-efficient ways of meeting the need; and to decommission, replace or consolidate existing solutions without being tied to them.
Secondly, this creates the ability to align scopes to the parent portfolio and to sub-portfolios, either through a decomposition of the customer segment (into by customer sub-segments), a decomposition of the customer need (into different need specialisms), or a combination of both.
There will be many options for how to do this decomposition – the answer will be different depending on context but should aim to maximise technical efficiencies (not having multiple portfolios responsible for very similar solutions that could be common) and minimise customer overlap (not having multiple portfolios all engaging with the same customer on similar needs).
For example, a portfolio delivering digital comms (a need to communicate digitally) could organise its sub-portfolios around different types of digital comms (chat, video, e-mail). Given these are likely to have a shared technology solution, an alternative could be to organise around customer need if there are groups of customers that have a sufficiently different need to require different technology solutions (e.g. office-based vs mobile). If there is not, it’s likely that the portfolio doesn’t require further decomposition.