Towards an Approach for Managing the Development Portfolio in Small Product-Oriented Software Companies

Abstract

Managing product development activities as an explicit portfolio is crucial to the long-term success of product-oriented software companies. Portfolio management has been studied in the field of new product development for over two decades, but existing approaches transfer poorly to small software companies due to contextual differences. Based on new product development and software engineering literature and three company cases, this paper presents an approach for implementing portfolio management in small, product-oriented software companies, along with initial experiences. The approach integrates portfolio management basics such as strategic alignment, portfolio balancing and go/kill/hold decision-making with modern, time-paced software development processes for the small company context. Our findings suggest that using the proposed approach increases awareness of what projects and other development activities are underway, and how these are resourced. It also helps in making informed decisions and trade-offs when necessary.