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July 18, 2020

Enterprise Architecture Live- SPEAKER SPOTLIGHT : Scale Agile effectively with strategic portfolio management

Courtesy of Software AG's Dr. Ulrich Kalex, below is a transcript of his speaking session on 'Scale Agile effectively with strategic portfolio management' to Build a Thriving Enterprise that took place at BTOES Enterprise Architecture Live Virtual Conference.

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Session Information:

Scale Agile effectively with strategic portfolio management

Organizations such as yours are pursuing Agile development of products and services to get a continuous stream of digital innovation out the door. Yet not without challenges. Agile demands big changes to the way we plan, make decisions and deliver results.

It demands that we embrace the spirit of independence and entrepreneurialism for the benefit of working software, customer collaboration, and speed-to-market. But proliferation of autonomous development across the enterprise can bring with it serious consequences such as autonomous and non-aligned Agile development teams, an exploding inventory of IT assets, and no coherence with overall business and IT strategy.

Find out in this webinar how you can use strategic portfolio management to ensure Agile teams remain connected to the whole. When you start strategically managing your Agile portfolio, you’ll align Agile activities to business strategy. You’ll avoid wasteful investment by consolidating and maximizing the potential of existing assets. And you’ll accelerate digital product delivery by eliminating any deployment hurdles.

Session Transcript:

Hello everyone, welcome back to Enterprise Architecture Live! I'm very excited by our next speaker, coming directly from Germany to the world today. Well, I'd like to welcome doctor Orange Calix.

Doctor Orange is the Senior Vice President of Product Line Management, and R&D, as software AG, in this capacity he's responsible for product strategy, the product roadmap, and the execution on development of the Alphabet product. That doctor Calyx, leadership, software, AG, which was previously alphabet AG, has contributed significantly to defining and shaping the market for enterprise architecture, strategic IT planning and portfolio management.

Since the Alphabet products introduction to the market as a standard software platform, it has ear pointy ear being recognized as a leader in analyst reports such as a Gartner Magic quadrant and Forrester Wave. Doctor Orange? It's a real pleasure and honor to have you here, and we're very much looking forward to your presentation.

Thank you, Jose, and thanks, everyone, for joining the session here today.

And let me start sharing my screen.

I love today, be talking about the and scaled, Agile, and how scaled Agile, can help organizations improve their ability to embrace the opportunity of digital business.

And how this is related to strategic portfolio management and enterprise architecture management.

So with this, let me get started on my slides here.

First, let's familiarize ourselves a little bit. The why This is a topic of relevance here.

We all know digital business, and the relevance of digital business is increasing by the minute.

And this quote from George estimated from MIT Sloan News actually highlighting that, What is all about, isn't just executing.

But it is really transforming the enterprise, um, I want to, the footer justify does need a couple of data points to share here.

one is looking at organizations and their ability to embrace the opportunity of digital, as explained here with this digital intensity.

And to looking at organizations ability to transform themselves in the transformation management intensity. And this again, is from George ... chair at MIT Sloan.

And what these folks have found out, is that the people, that they call ...

ratty, the ones that can excel along, picking up digital opportunities, as well as being successful in transforming themselves, are winning out on All accounts. And turn to this.

We're looking at the same portfolio quadrant here, did a number of data points, indicating performance of organizations. The Savvy, they are positioning along those two axes of digital intensity and transformation management intensity. And what is striking is that the ones that are in this picture, writing quadrant, or really winning on all counts, the winning in revenue generation, the winning and profitability, they're winning in market valuation. And that means steady. Obviously, everybody is looking into becoming aditya ratty, improving on the ability to identify additional opportunities and then transform the enterprise transform the organization.

Screenshot - 2020-07-18T204525.457Too, Take advantage of the digital opportunity that has been identified.

And what is very important in the context of our conversation today is that it is ajao that helps organizations becoming successful in this.

And when we look at that child, we can clearly see, on this next slide here, that meant that we have many organizations that are aspiring to improve on the capabilities.

And we also see that.

We also see that the United Nations.

Improving. Or. Getting some background noise here, from the panelists, can you please turn on?

You're also seeing that the D A?

The fortune of organizations is very much related to the ability to transform themselves.

And you can see this in this chart with the S&P 500 index and showcasing how the lifetime of organizations of enterprises in the S&P 500 Index has shrunk by 50% over the course of the last 50 years.

Which is indicative for the acceleration of transformation that is critical to nearly all of industries.

So, everybody, of course, has heard about Agile. And we all know that Agile is closely related to working software, to customer collaboration, to rapid response, to change.

And on that backdrop, one could ask the question, So, why exactly? Do we need to talk about it?

What is the role that governance has to play in this?

So looking at this, we can see that there's a number of desire benefits associated with Agile, spirit of entrepreneurism, or the ability to respond to challenges in flight or the focus on customer outcomes. Look, speak to market. These are all positive connotations associated with agile. And many organizations have demonstrated to themselves and the leadership that Agile is making that difference.

But on the flip side, organizations that have taken Agile too much on an operational basis, have learned that Agile comes with consequences that are desired.

Insufficient ESA governance, strategic cohesion, lacking, or in a sprawl of infrastructure because all of these Agile teams are basically self supportive, autonomous, and in making the requests for assets, for infrastructure for self care as they seem necessary.

So what is probably required is finding the right balance between those two. And coming to a time of Lean governance here.

That's what I will be focusing on the next few slides.

So Agile is an imperative for digital business success. I think you have seen this on the slides from MIT Sloan. Here is a quote from Forrester. And I'm sure you will be able to find this yourself underpinning the importance of portfolio management in successfully taking Agile to an enterprise scale. So, now, we want to try to learn for ourselves, what does this mean, specifically, what are the capabilities organizations need to embrace, need to adopt, need to become excellent weight in order to take Agile to an enterprise scale.

The first one I want to talk about is business strategy planning. It is all focused on executing on our digital business strategy.

And when we look at this, There's a number of aspects and facets that come into play here. I don't have time to dwell into each and every single one of them, so I want to highlight a few business capability management.

Btog CTAHow do we know which business capabilities need changing or need to be introduced altogether? In support, after business strategy that we have. How do we know that these personal capabilities are there in the right quality, or being adopted throughout the organization?

And secondly, is what we call business IT synchronization. So, how do we know what digital products and services do we need?

Do we need to further develop, transform, introduce which digital products and services do we need to attain outcomes as defined in our business strategy?

The result of this business, strategic planning, now, need to go into the ... of data development teams. And you can see, by the visual that I'm using here on my slide, that, of course, the leaves are very many.

There are organizations that may have hundreds of Agile teams operating on their specific products and services, So, taking Agile to an enterprise scale is also about managing the challenge of orchestration across these many different Agile teams.

Moving on to the capability number two, which is strategic portfolio management.

So, here, we are looking at finding answers to the question of, are we investing in the right digital products and services?

And we are looking at case, of course, as a follow on, to digital business strategic strength, chief, strategic planning. So, we are trying to understand, are we in alignment with the strategy?

Did the portfolio as we have, I'll be knowing do we know ditch parts of the portfolio contribute to attainment of strategy? Do we understand the impact of changes along with the architecture?

Can we identify the agile budgets that are necessary, and live within the constraints that these agile, but it's inevitably little cumbersome.

Moving on to capability number three, The third capability we call Lean portfolio management.

See the subtle difference?

While previously we had talked about strategic portfolio management, now we're talking about Lean portfolio management.

And that means we are looking to find answers to Avi managing our digital portfolio effectively.

Here we are talking about three different players coming to get her.

Copy of Email Graphic Virtual Conferences (3)The first one we call Enterprise Teams, these Enterprise teams are focusing on gravitating to balancing strategic themes with the long term outcomes that we're hoping to attain.

Secondly, you're talking about portfolio teams and portfolio teams.

Focus on balancing the funnel off epics, vik the Product Delivery, and the Strategic Theme Outcomes.

So, if the enterprise team has decided, these are the strategic themes we should be making investment into and here is the money that we are.

Does positioning two different strategic themes allocating to the different strategic themes? Then, the Portfolio Teams Table look into, OK, given that these are the constraints we are maneuvering the vein for a specific strategic theme.

What our, what our best bets off change to make the direction of the strategic theme, Every entity.

Then last, but not least, we are talking about product teams.

And the product teams are the ones that are now close to the hip ..., the Agile teams, the Scrum teams. Those are the teams that focus on. what are those features? What are the changes that we should bring?

into our products and services that meet the needs of change that allow us to leverage the capacity, the talent that we have available in our product team to the best of possibilities to attain, They ask from the portfolio team.

Moving on to capability number four.

Capability number four is at the heart of the orchestration challenge iOS.

Speaking about mentioning a couple of slides ago, know what they are, van, and who of change.

We have so many different moving parts in our organizations given, given the complexity of the organizations that we have to come to deal with it.

That it is very important to have the right communication in place for the change, and we call it as road mapping.

And the roadmaps are synchronizing the inter-connected portfolios, and roadmaps are galore. And of course, we are not talking about three individual portfolios, but we are talking of a three categories of portfolios here.

So, investment strategy portfolio because there are many different business strategies in IT change portfolio because there's so much of change happening all the time, and an ITSM portfolio because we have already come to a situation where we have hundreds, if not even thousands of IT assets to take care of.

These portfolios articulate their change individually through a roadmap, and these roadmaps are communicating to one another.

Coming to capability number, Bye, capability number five is picking up on the right edge of scaling framework.

You aren't the first organizations to go through this, and you are able to follow a vital, established experience in the market to be successful with this.

So, um, I'm picking here safe, but there are other frameworks equally popular and available on Spotify less, just to mention another couple of examples.

What is important is that these frameworks are connecting the agile release, train continuous delivery pipeline at the core, the strategic portfolio management, the strategic planning conversation, and provide for the right connections.

So here we are talking about organizational agility. How do we understand how disorganization need to embrace the opportunity?

Here we are finding back the Lean portfolio management that I mentioned earlier, the Agile product delivery.

And also finding the strategic themes, The portfolio vision, the Lean budgets, the portfolio backlog.

And of course, along with this, we see the apex falling into place to delivering on the business outcome KPIs that we have. I didn't.

So important as a capability for your organization is identifying the right Agile framework, picking up on the operating model that the organization has, and adopting that framework to your own needs, because these frameworks are just cookie cutter methods.

These frameworks need to be live, but by, in a complex Lee set up organization, and that means you need to juxtaposes, you need to cross it, visit the operating model that you have come to live it for probably a decade or more of the time.

So that means a capability that you will require is the ability to configure your road, to Agile, to the specifics of your organization.

Moving on to the next capability, this next capability is making sure you are bringing all the information that you possibly have into the context of your Agile Enterprise conversation. So we call this the integration with the SPM ecosystem.

You are aspiring to having an always on, 360 degree inflammation hub for HIA decision and that sit facets, the aspects of inflammation, collaborations are a phenomenon.

We are talking about so many different elements and pieces here.

Let me just pick a few model to execute execute to model. This is all the state of solutions that you have in place that automate processes that facilitate integration in your landscape that monitor the execution of electronic processes, like ..., for instance. Or that help you articulating what are those processes in the first place that are automated or not as would typically be done in a business process.

Analysis solution such as for instance, then via talking about risk and compliance because risk and compliance gives you a good understanding of what are the constrains. What are the boundaries of maneuvering that are available to you to your organization and how they have to be reflected in those new digital products and services that you may want to them?

Picking up on the IT service management layer because this is the place where you have the best of understanding about the incumbent IT.

What all is contributing to a specific service that IT is delivering to the business and how are these pieces coming together?

A ver are your incidents and how can you translate incidents that are particularly good on a fairly low infrastructure level in a way that would be consumable by the business decision?

Screenshot (4)Then, of course, we talk about budgets and cost because everything, of course, is under the premise that it can be afforded by the Enterprise.

So, all of these pieces need to come together.

And I forbid, is providing you this single pane of glass that allows you to have all this information work, to the benefits of you and your organization, advancing, in the agile enterprise chern.

Moving on to the business capability of enterprise architecture, the business capability of enterprise architecture is your point of gravity.

And presumably, some of you will know that picture, it shows the Foucault, the pendulum as did on display in Paris, and I have chosen this picture for a purpose. Because, much like this Pangolin of Foucault is, pointing to the gravity.

To the center of gravity, Your enterprise architecture, we'll have the ability to inform drug product management and product architecture.

But you need to set it up for it.

And setting it up for that means you need to embrace enterprise architecture as an aed, child architecture itself.

So gone are the days where enterprise architects can spend months and months coming up with proposed architecture solutions.

So the architecture itself is a topic of evolution, is in motion and you will only be knowing and only be able to articulate so much at every juncture in the process.

Secondly, you will be supporting as enterprise architects, the definition of the products and services.

Um, that means the architecture itself is that definition.

And when I say this is the definition, it means you are delineating, ver the boundaries are between those different products and services.

And get this in place. You can help application portfolio management.

two, come to an optimized and agile IT.

That means anytime and all the time, you will be helping the application portfolio, leadership to understand, and take decision, is to very, you need to change strategy for your application portfolios. This often is related to business capabilities. So you will identify business capabilities that need changing.

Remember, starting from the strategy of your organization. So those business capabilities that need changing, they will inform you as to better or not.

You should look into expanding the portfolio of products and applications, or vetter.

You should be contracting that portfolio of products and applications supporting, enabling, automating a business capability.

Then lastly, the business capabilities are the heart and center piece of the business architecture.

They will be used to driving business decision making.

Dave will be used to identifying, think digital products and services that you should be aiming for, um, in that you might need to complement the existing state.

Gabe will also be informing you about products and services that meet need enhancements and ... products and services.

You need to understand that this includes also the likes of APIs or microservices, as, well, days of interaction vit in the portfolio within the landscape that you have. Or into the ecosystem of departments that you're dealing with.

They also provide you with the ability to evaluate your own position vis-a-vis competitors. And I think that's something that many on ... still have an opportunity to improve on.

Screenshot - 2020-07-18T204525.457Because you can identify easily, what are those capabilities that your competitors are strong that may be stronger than yourselves, and you can help business identify an estimator or not. This is OK.

Because organizations are different.

Or as to whether or not, it is a gap that needs closing. And then once you identify it is a gap that needs clothing, you will probably define a business strategy that drives closing this gap vis-a-vis your competitors. You will understand how to measure the attainment of this strategy. You will be able to actually start measuring this in your organization so as to setting yourself up for a successful transformation along that business strategy.

So, on concluding to this, let's take a look at strategic portfolio management again.

And let's juxtapose it with Agile Development, again.

At the beginning, I had started it, explaining how many organizations have taken a very operator, operational view, agile development. They have taken the benefits of agile development, such as the ability to collaborate with customers, the ability to make changes in flight, the ability to improve time to market.

And we have done this in a fairly focused, but siloed fashion Now, complementing this weight, strategic portfolio management.

And I hope that you agree with me that, as a result, we are actually seeing strategic portfolio management, not at all at odds with agile development.

And here are a couple of reasons why strategic portfolio management can be, and shouldn't be the backbone of your Agile development practice, firstly.

Strategic portfolio management will help you improve collaborations and decision making.

It will give the Agile teams, the ability to co ordinate amongst them self's across different address teams.

So, as to understanding what direction of change, they all need to respond to vis-a-vis the strategy of the organization.

It also helps, coming to a common vocabulary, which in turn will help supporting collaborations.

And, you are, in procession off a central repository of systems of glass trays of nomenclature of requirements of strategies of capabilities. All of these great things are available.

two, the entire community that is working on Agile development.

Secondly, it will help you furthering the speed to market.

It will help you, the Agile teams to improve their speed to market even further because they are able to fully examine the operating deployment.

They will lower the risk of disruption.

As they prepare or releases Angular's, it will help them to get a better understanding of diaz's environment.

The D R going to live in, they are going to co operate it.

Inevitably, the beta releases that they're bringing out and it will thus help them identifying interdependencies and potential problems much earlier than today.

And the third 1 is 1 that is very timely indeed.

Because we all know about the cybersecurity risks, the risks of incidents and outages, and the consequences that those have, to the realities off businesslike.

That is increasingly increasingly dependent on vel functioning digital products and services.

So, Agile Enterprise helps the Agile Development teams to anticipate what is coming down the pipe, anticipate new policies and regulations, anticipate and responds to changes in strategy, in response to, for instance, regulatory changes, as well as understanding how the interplay of multiple products and services changes the lay of the land too, the digital facade of the enterprise.

So, this, I have completed my session here and done, I think Hosea would be good if you were to come back on.

Doctor ..., thank you so much for a great presentation. Very, very interesting approaches on strategic project management, and its interface with Agile. So, there are a few questions that have come up during your talk and I'll relay them to you. The first one here is from someone who is in a, in a high volume manufacturing setting. They are, they describe their organization is about a $3 billion high volume manufacturer. And they have, you know, as as you alluded during your presentation. They have, they have a number of teams working on digital innovation areas in the company and but there's also an opportunity to reset if you will.

And and as the, as you discussed, strategic portfolio management, what would be the right sequence of events, if you will, on, on, if we had an opportunity to pause and restructure things and start the right way. Again, restart the right way. How would you advise someone who is looking at developing more of a strategic portfolio management approach? If you will, to do that, what would be the first initial steps, to get that done show? OK, I think there are probably two principal inroads to this.

And I would want to call them top-down and bottom-up, without necessarily giving any indication of superiority or inferiority here.

The top down approach, we could also tall tower.

Copy of Email Graphic Virtual Conferences (3)Talk about, as a strategy lead approach, so an organization that has an important strategic direction.

two, execute on would be in a perfect position to taking this as the lead launchpad into Agile Enterprise.

Because such a strategic transformation, though, often come with a series of initiatives that will ultimately be executed by a distributed, orcas to be orchestrated set of teams.

The second approach is, would be starting from the existing practice of Agile Development.

So if you have 10, 15, 20 teams that are currently working on digital products and services totally independently, for most of cases, you can help them coming together and finding the right mode of calibration and into operation by giving them that additional layer off synchronization in helping them understand, what are the capabilities that we are contributing to with our products and services? And how are those related?

And how are those subject to policies, regulations, constrains, constrains of using data and sharing data, constraints of storing data or moving data, etcetera?

And, um, soon, these teams will be understanding the benefits that they will be able to gain and get from having these early warnings to tell them.

The feature that we believe you would be working on next week isn't actually all the necessary any longer, because of that change in policy, that is coming down the pipe.

Very good. Very good, Very helpful. So the next question has to do more about the state of development and on the strategic on SPM. If you look back at the last 12 months or so, as you work with clients worldwide, what would you consider to be maybe A track trends that you have observed or most important developments that you have observed related to SPM in those organizations?

Interesting question.

So, first observation we are making is that this is a topic that is kind of trending hot.

It's starting to gain attention specifically on leadership level.

So, the likes of Head of Transformation, of course, to CIO, the chief digital, those are roll stead.

Look at, scaling it. Child.

two, the enterprise level, because they have hurt, so great stories about it.

And they're not on, they aren't necessarily the ones that would go and execute them, but they are looking to get support from their organizations in making this a reality.

Secondly, it is still far from being a mainstream topic.

So, VR, still kind of in the face of gaining experience.

Getting more familiar with, is establishing our organizations, So, obviously, organizations have gotten more and more creative in implementing there a specific way of enterprise.

And we as an organization, Sophie, as an organization, is helping our clients in finding the right way of adopting this in their organization, because, of course, organizational constrains complexities are something we cannot neglect here.

So, these are probably the two most important trends.

Very good, very good. Joseph Lackey has a real practitioner question here, doctor Arch that you can then help us with. He says that it's really difficult to manage software, corporate vision. And then with that, he asks: How do you drive changes with bigger software companies, that the greater their capabilities are bad PM, Decisions that affect an end user usability of their legacy products with the new Develop the releases, the new releases, loss, functionality, and capabilities for fluff features? So, again, I'll read. I'll repeat The question. is that, how do you drive changes with bigger software companies that the greater their capabilities of bad PM. Decisions that affect the end user usability of their Legacy products, because they release new products that that that really were not very useful?

Interesting question.

Now, the, this is probably, ver the inter play between the three teams that I had articulated.

In one of the capabilities that are crucial here, the Lean portfolio management comes into play.

Firstly, you need to have a strategic direction if you cannot articulate the strategic themes that are relevant for you, If you cannot measure how these strategic themes are being delivered against, which means it starts with, if you do not measure, you are outright flat failing. Anyhow, it doesn't matter.

Secondly, you need to have those portfolio teams.

Portfolio teams are not tied to a product.

They are finding the right balance of feeding epix to the products epic's of coarse grained articulations of requirements.

They are not down in the weeds, And, hence, they are less likely to cause frustration with existing customers about things being removed and fluff being introduced in replacement.

Again, it is important that you have metrics and measures to know better you are moving the needle into the right direction.

And what we find is many organizations, all shying away or taking not seriously, that topic of identifying the right metrics and measures. What those organizations do is they just focus blindly and solely on the third of the teams, which is important. Nothing against, but it's not the only team that exists. It's 1 of 3 types of teams.

Screenshot (4)And if you are not giving attention.

If you're not providing decision making, support, and budget to the other two, don't be surprised that you end up in a situation this less desirable and probably introducing unnecessary complexity.

Doctor Orchard, that was an excellent answer. Thank you for that. That really provides a full picture. We really appreciate you taking the time to share your expertise with a global audience today.

It's a real honor and privilege to have you with us, OK, thank you very much and thanks everyone for joining the conversation today. I wish you the best of luck and, be happy to continue a conversation with you as you see fit.

Thank you very much.

Goodbye. Goodbye. Ladies and gentlemen. This concludes this segment of this presentation and we have one more presentation at the top of the hour that you do not want to miss. Tompkins is going to be talking about ownership and accountability the functional linker just your enterprise operating system. So, a great follow up to doctor urge session on strategic portfolio management, and the, and the real role that strategy and culture plays on enterprise architecture. So, look forward to seeing you at the top of the hour, and, and fill out the feedback, sessions, comments, if you have any comments to make, and we'll see you back soon.


About the Author

more (75)Bilal Siddiqi,
SVP Product Management / R&D,
Software AG.

Dr. Ulrich Kalex is responsible for the product strategy, roadmap and development execution for Software AG’s Alfabet product line. Under his aegis, Software AG has contributed significantly to defining and shaping the EA, Strategic IT Planning and Portfolio Management markets.pillar%20page%20line%201

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