When Do You Need Agile Product Portfolio Management?

First, let’s define Agile Product Portfolio Management. Agile Product Portfolio Management is a dynamic approach to managing a company's suite of products. It involves continuously evaluating and prioritizing products based on shifting market demands, customer feedback, and business goals. It integrates principles of Agile methodology - such as flexibility, rapid iteration, and cross-functional collaboration - into portfolio management. The focus is on adapting quickly to changes, making swift decisions based on current data, and ensuring that resources are allocated efficiently to maximize product success and overall business value. It's about maintaining a balance between long-term strategic vision and short-term market realities, ensuring the product portfolio remains relevant and competitive. 

Agile Portfolio Management is needed when your business and product line achieve a size, complexity, and maturity where decisions can no longer be locally optimized for individual products. For small to mid-sized companies with just a few products, a formal product portfolio is not needed, will introduce unnecessary overhead, and likely slow you down. Here are some specific scenarios where Agile Product Portfolio Management is needed:

• Product Line Diversity. You have a diverse range of products that are at different stages of their product lifecycle (introduction, growth, maturity, decline, etc.) 
• Internal Funding of New Products. With fixed resources, you need to re-balance resources and budgets across projects or products to fund, accelerate, or defund products.
• Strategic Alignment. Your need to ensure products, projects, and resources are aligned with the strategic goals of the business. 
• Maximize ROI. You must evaluate product financial performance to ensure the business is  realizing ROI goals and avoid narrow decision-making confined to the product/project level.  

The maturity model below is a good guide for evaluating your organization’s need for Agile Product Portfolio Management. It also includes recommendations for product-oriented roles and responsibilities as the organization grows in size, complexity, and the business impact delivered by its products.