Framework for implementing product portfolio management in software business

Whether a software product company takes up a project depends on the strategic decisions that are made with regard to an organization's products. A software project needs to fit strategic goals and enable an organization to realize a vision through its software products. Making decisions on a strategic level, however, requires information of several related topics including technological trends and the product's life cycle and surpasses the scope of an individual software project. Instead, these decisions are made on the level of the product portfolio. Product Portfolio Management (PPM) holds that an organization has to manage investment decisions over time following profit and risk criteria. Given the multitude of relevant topics and the interrelatedness between these topics, it has proven difficult to implement PPM processes in software businesses. To this end, we created the Portfolio Implementation Framework (PIF) consisting of (a) a competence model, giving an overview of the critical topics; (b) process-deliverable diagrams, which provide an implementation path for product portfolio management processes; and (c) a maturity matrix that comprises 32 capabilities, which should be realized during implementation. The maturity matrix also serves as an instrument for industry to assess, compare and improve portfolio management processes across organizations. The framework provides a holistic view on a step-by-step PPM process implementation and has proved its applicability in practice.