24.-25.5.2004 Jarno Vähäniitty Helsinki University of Technology

1. Product Portfolio Management in Small Software Product Businesses A Tentative Research Agenda Supervisor: Prof. Casper Lassenius 24.-25.5.2004 Jarno VähäniittyHelsinki University of Technology Software Business and Engineering Institute (SoberIT) http://www.soberit.hut.fi/

2. This Research Agenda is About... • The state-of-practice of product portfolio management and related problems & challenges • The helpfulness of state-of-the-art literature for solving the problems & challenges found • Identifying and closing gaps between existing literature and practitioners’ needs

3. Portfolio Management in Small Companies – Why Needed & Why Difficult? • Portfolio mgmt means • Selecting and prioritising products and/or features based on perceived costs, rewards and risk • Reducing risk through having a diverse and balanced portfolio of revenue sources Question: How can a small company actually achieve this?(e.g. multiple products or product lines???)

4. Platform development ProductDevelopment Application development Reducing Risks through a Portfolio of Different Types of Development Effort • Problems: • Resources are shared  ”single project” decisions ripple across the portfolio • A common understanding of the portfolio missing • Unclear and shifting priorities • Fire-fighting  portfolio decisions by project management • Overbooking of resources, causing some important activities to be neglected The ”real” question: How to actually manage such a portfolio? Tailoring Deliveries Consultancy

5. Why is Answering this Important? • Portfolio management crucial to product-oriented SW companies long-term success (e.g. Cusumano 1995) • Small companies need support for deliberate and systematic product development decision-making (Berry 2002, Crowne 2002, Vähäniitty 2002) Platform development How to actually manage such a portfolio? Application development Tailoring Deliveries Consultancy

6. A Gap in Theory • Software engineering (SE) • Primarily technical(Glass et al. 2002) • Viewpoint of individual development projects • New Product Development (NPD) • Proven models for portfolio management(e.g. Cooper et al.) • Based on assumptions that are invalid for the context • Dedicated resources • Senior management not involved in hands-on work • Resource constraints not ”absolute”

7. Research Problem • How should product portfolio management be implemented in small software product businesses? • Specifically, how should the contextual differences be accounted for?

8. Reported in "Pacing Software Product Development: A Framework and Practical Implementation Guidelines". Rautiainen, K., and C. Lassenius (eds.) Helsinki University of Technology Software Business and Engineering Institute Technical Reports 3. Helsinki, 2004 My Previous Work • A model for implementing portfolio management • Developed together with three small product-oriented companies • Case studies • Interviews & regular discussions w/company personnel • Participation in real meetings • Joint problem-solving • Experiences support the practical utility of setting up portfolio management in small companies

9. Up Next • Continue developing the model • Keep observing the original three companies • Deploy & refine the model with four new case companies • More detail on how to do long-term product and release planning • Test the model with a controlled experiment • Undergraduate students solving case assingments • Report the experiences

10. Thank You for Your Attention Questions & Discussion

11. 2 weeks Portfolio control points Target spending levels (example %) Fire Brigade Portfolio Reviews Roadmap Revision A Model for Implementing Portfolio Mgmt for Shared Resources doing Time-Paced Development Platform development (20%) Application development (30%) Deliveries (10%) Tailoring (20%) Body shopping (20%)