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How Product-Centric IT Disrupts Portfolio Management

Sriram Narayan | June 20, 2016
Product-centric IT provides further opportunities to seamlessly embed portfolio management into line management.

The lion's share of the pie (H1 and H2), on the other hand, when recast as product-centric IT, simply absorbs portfolio management into autonomous line functions (capability owner, product owner). Here is where the rubber meets the road when we speak of arriving at an operating model that allows for autonomy, mastery and purpose on the one hand while balancing for accountability and alignment on the other. In the absence of a separate portfolio management office, capability and product owners have the autonomy to use funds to meet the objectives they are accountable for.

Note that funding controls are still in place. Annual team capacity decisions are strategic allocations made by senior leadership. Capability and product owners have to demonstrate progress (every month or quarter) towards the objectives for which they have been provided with a team. However, since the objectives are now business aligned (rather than being of the nature of delivery to plan), they can be tracked directly by line managers. Traditionally, we have only tracked delivery and so it was okay to have a staff function like portfolio management office look after it.

Not having a separate portfolio management office for H1 and H2 portfolios also makes sense from the point of view of maximizing business-aligned, outcome-oriented teams and minimizing function-aligned, activity-oriented teams. Product-centric IT represents a scaled, outcome-oriented configuration whereas portfolio management is an activity. A separate portfolio management office is a shared service just like how a separate testing team or a separate deployment team is a shared service. Shared services are prone to local optimization and therefore best kept to a minimum.


The habit of benefits validation based portfolio management can be introduced into traditional, project-centric IT. Product-centric IT provides further opportunities to seamlessly embed portfolio management into line management. Institutionalizing benefits validation reforms the funding function of project portfolio management in traditional project-centric IT whereas the move to product-centric IT disrupts (to good effect) the function altogether.


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