Portfolio Value Metrics
Short Tip: It is the process of defining and periodically assessing the value of a portfolio.
What is it?
It is the process of initially defining metrics for the value associated with a set of related programs and initiatives (portfolio), as well as their measurement on a periodic basis.
Portfolio value metrics should be fed by the individual metrics of each program in order to be consolidated into value metrics for the business.
Why use it?
Value metrics are important to measure the effective impact of a solution on the problem initially addressed. Measurement at the portfolio level, not just at the program level, provides an executive view of how the products interconnect with the organization’s strategy.
How to use it?
The process is divided into defining the value metrics and monitoring them, and consists of the following steps:
- Understanding, for the programs in the portfolio, the value metrics currently used by the Program Leaders, as well as their update policy;
- Hold a discussion with the Program Leaders about potential metrics that would be relevant for capturing the overall value of the portfolio;
- The Evidence-Based Management (EBM) framework can be useful to identify potential areas of value metrics;
- Based on these proposed metrics, define the ones that will be used;
- It is advisable that the set of selected metrics mix lead (close to real-time) and lag (periodic updating) characteristics;
- Identify how to update these metrics based on information generated for the program;
- If there are portfolio metrics whose product lacks such information, request the inclusion of an action into the Program Backlog and respective product in order to capture this data with the necessary frequency;
- Start monitoring the value metrics and hold a discussion with the Program Leaders about the results achieved. More than an information repeater, portfolio metrics should enable a discussion on ways to improve existing programs or even insights to create new products.