The work of the PO is organized around four fundamental information structures: the master plan, resource plan, financial forecast (see Figure 3.3), and requirements dependency matrix (see Figure 3.4).
Figure 3.3: Master plan, resource plan, and financial forecast.
Figure 3.4: Requirements dependency matrix.
The master plan is a time-scaled view of all the projects included in the project portfolio covering a planning horizon of 2 to 3 years. The projects in the plan are portrayed as single tasks characterized by their tentative start dates, their duration, their required effort, their funding needs, and their effort spending profiles. Additional information about the projects could include the degree of commitment to the project (i.e., whether the project is in execution, planned, or envisioned) for those under execution, the status (i.e., whether the project is on time or delayed, and the technologies or products they support). The master plan might also include relationships between projects and links to technology and product road maps.
The resource plan is a forecast, over the planning horizon, of the resources necessary to execute the projects included in the master plan. The resource plan covers the current availability of resources (head count), their competencies, a recruiting plan, and periods during which excess capacity might exist. The resource plan shows whether the resource utilization is based on current, planned, or envisioned work. At this level, the resource plan is prepared based on the competence of the resources and not by assigning specific individuals to the projects. Plans for resources such as test benches, laboratories, and computing equipment are better taken care of by the line organizations that own them.
The financial forecast depicts the cash flows, expenses, and revenues arising from the execution of the projects in the master plan, with the purpose of helping senior management and project sponsors choose the portfolio configuration that best meets the objectives and capabilities of the organization. The financial information contained in the forecast includes labor costs, nonlabor costs, management reserves, volume allowances, and funding sources. In addition to the financial forecast, the PO also prepares detailed quarterly or annual budgets for the projects in execution and for those beginning in the next budgeting period.
The requirements dependency matrix is an important tool for organizations working on product lines or whose products evolve through successive reincarnations of added functionality. The matrix links the requirements or features to be developed in future projects to those in previous projects that will serve as a foundation upon which the latest will be built. The matrix allows tracing the consequences of postponing or canceling the implementation of any feature through the entire project portfolio. Additionally, the matrix might contain financial and effort information that allows calculating the impact—in terms of lost revenues and extra development effort—that such decisions would have over subsequent projects. The mechanism for this will be explained in detail in Chapter 6.