Learn / Enterprise AI Architecture / Portfolio Prioritization
Lab 12

Portfolio Prioritization

45 min 9 sections 2 prerequisites

What You'll Learn

  • Evaluate multiple AI opportunities using structured criteria
  • Apply the prioritization matrix to balance value and feasibility
  • Build a balanced portfolio across investment horizons
  • Create an investment roadmap with resource allocation

Prerequisites

  • 6.3-portfolio-strategy
  • 6.4-operating-models-for-ai
Part 1 of 9

Lab Overview

You can't do everything. In this lab, you'll evaluate a set of AI opportunities and build a prioritized portfolio that balances quick wins with strategic bets, immediate value with capability building.

What you'll create:

  • Scored opportunity inventory
  • Prioritization matrix visualization
  • Balanced portfolio allocation
  • Investment roadmap with resource plan
Part 2 of 9

Part 1: The Scenario (5 minutes)

Context

You're the AI Strategy Lead for a $2B specialty retailer with:

  • 200 stores across North America
  • Strong e-commerce (45% of revenue)
  • 12,000 employees
  • Growing competition from pure-play e-commerce
  • New CEO with AI as strategic priority

Your resources:

  • Annual AI budget: $4M
  • Current AI team: 6 FTEs (can hire 4 more)
  • Executive sponsor: Chief Digital Officer
  • Mandate: Show measurable impact in Year 1

The Opportunity List

Leadership has identified 12 potential AI initiatives. Your job: prioritize them.

OPPORTUNITY INVENTORY
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

| # | Initiative | Domain | Brief Description |
|---|------------|--------|-------------------|
| 1 | Conversational Product Advisor | CX | AI assistant for product recommendations |
| 2 | Customer Service Automation | CX | AI handling Tier 1 support inquiries |
| 3 | Dynamic Pricing Engine | Merch | Real-time competitive price optimization |
| 4 | Demand Forecasting | Supply Chain | ML-based inventory prediction |
| 5 | Product Description Generation | Content | Automated PDP copy creation |
| 6 | Visual Search | CX | Shop by image on mobile app |
| 7 | Review Sentiment Analysis | Merch | Extract insights from customer reviews |
| 8 | Personalized Email Content | Marketing | Dynamic email personalization |
| 9 | Store Associate AI Assistant | Operations | In-store product knowledge tool |
| 10 | Fraud Detection Enhancement | Risk | AI layer on top of existing fraud rules |
| 11 | Returns Prediction | Supply Chain | Predict return likelihood before purchase |
| 12 | Agentic Commerce Readiness | CX | Prepare for AI shopping assistants |

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 3 of 9

Part 2: Value Assessment (10 minutes)

Score Strategic Value

For each opportunity, score on a 1-5 scale:

STRATEGIC VALUE ASSESSMENT
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Scoring Guide:
1 = Minimal impact
2 = Some impact
3 = Moderate impact
4 = Significant impact
5 = Transformational impact

| # | Revenue | Cost | Competitive | CX | Capability | Total |
|   | Impact  | Save | Advantage   |    | Building   | (25)  |
|---|---------|------|-------------|----|-----------:|------:|
| 1 |         |      |             |    |            |       |
| 2 |         |      |             |    |            |       |
| 3 |         |      |             |    |            |       |
| 4 |         |      |             |    |            |       |
| 5 |         |      |             |    |            |       |
| 6 |         |      |             |    |            |       |
| 7 |         |      |             |    |            |       |
| 8 |         |      |             |    |            |       |
| 9 |         |      |             |    |            |       |
| 10|         |      |             |    |            |       |
| 11|         |      |             |    |            |       |
| 12|         |      |             |    |            |       |

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Value Reasoning

For your top 3 highest-value opportunities, document why:

TOP VALUE OPPORTUNITIES
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

#1: _________________________ (Score: ___/25)
Value Thesis:
_________________________________________
_________________________________________

Quantified Potential:
• Revenue impact: $____/year
• Cost savings: $____/year
• Other value: ____

#2: _________________________ (Score: ___/25)
Value Thesis:
_________________________________________
_________________________________________

Quantified Potential:
• Revenue impact: $____/year
• Cost savings: $____/year
• Other value: ____

#3: _________________________ (Score: ___/25)
Value Thesis:
_________________________________________
_________________________________________

Quantified Potential:
• Revenue impact: $____/year
• Cost savings: $____/year
• Other value: ____

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 4 of 9

Part 3: Feasibility Assessment (10 minutes)

Score Execution Feasibility

For each opportunity, score on a 1-5 scale:

FEASIBILITY ASSESSMENT
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Scoring Guide:
1 = Major obstacles
2 = Significant challenges
3 = Moderate effort
4 = Manageable
5 = Straightforward

| # | Data    | Tech    | Org      | Resource | Risk  | Total |
|   | Ready   | Complex | Readiness| Avail    | Level | (25)  |
|---|---------|---------|----------|----------|------:|------:|
| 1 |         |         |          |          |       |       |
| 2 |         |         |          |          |       |       |
| 3 |         |         |          |          |       |       |
| 4 |         |         |          |          |       |       |
| 5 |         |         |          |          |       |       |
| 6 |         |         |          |          |       |       |
| 7 |         |         |          |          |       |       |
| 8 |         |         |          |          |       |       |
| 9 |         |         |          |          |       |       |
| 10|         |         |          |          |       |       |
| 11|         |         |          |          |       |       |
| 12|         |         |          |          |       |       |

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Feasibility Deep Dive

For your 3 lowest-feasibility opportunities, identify the blockers:

FEASIBILITY BLOCKERS
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Initiative: _________________________ (Score: ___/25)
Primary Blockers:
1. _________________________________________
2. _________________________________________
What would make it feasible?
_________________________________________

Initiative: _________________________ (Score: ___/25)
Primary Blockers:
1. _________________________________________
2. _________________________________________
What would make it feasible?
_________________________________________

Initiative: _________________________ (Score: ___/25)
Primary Blockers:
1. _________________________________________
2. _________________________________________
What would make it feasible?
_________________________________________

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 5 of 9

Part 4: Prioritization Matrix (10 minutes)

Plot the Matrix

Place each opportunity in the appropriate quadrant:

PRIORITIZATION MATRIX
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

                    HIGH STRATEGIC VALUE (15-25)
                           │
              ┌────────────┼────────────┐
              │            │            │
              │  BIG BETS  │ QUICK WINS │
              │            │            │
              │  #         │  #         │
              │  #         │  #         │
   LOW        │  #         │  #         │        HIGH
   FEASIBILITY├────────────┼────────────┤        FEASIBILITY
   (5-12)     │            │            │        (18-25)
              │   AVOID    │ MAYBE      │
              │            │ LATER      │
              │  #         │  #         │
              │  #         │  #         │
              │            │            │
              └────────────┼────────────┘
                           │
                    LOW STRATEGIC VALUE (5-14)

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Quadrant Summary

List initiatives in each quadrant:

QUADRANT SUMMARY
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

QUICK WINS (High Value + High Feasibility):
Do now—these build credibility and momentum
•
•
•

BIG BETS (High Value + Low Feasibility):
Invest carefully—high value but requires significant effort
•
•

MAYBE LATER (Low Value + High Feasibility):
Consider if resources allow—easy wins but limited impact
•
•

AVOID (Low Value + Low Feasibility):
Don't pursue—not worth the effort
•
•

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 6 of 9

Part 5: Portfolio Construction (10 minutes)

Assign Investment Horizons

Categorize each initiative you're considering:

HORIZON ASSIGNMENT
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

HORIZON 1 - OPTIMIZE (0-6 months)
Proven patterns, immediate value, builds credibility
•
•
•
•

HORIZON 2 - EXTEND (6-18 months)
Emerging patterns, moderate risk, significant capability
•
•

HORIZON 3 - TRANSFORM (18+ months)
Unproven patterns, higher risk, strategic differentiation
•

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Allocate Budget and Resources

Distribute your $4M budget and 10 FTEs:

PORTFOLIO ALLOCATION
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Target Mix:
• H1 (Optimize): 70% = $2.8M / 7 FTE
• H2 (Extend): 20% = $800K / 2 FTE
• H3 (Transform): 10% = $400K / 1 FTE

YOUR ALLOCATION

| # | Initiative | Horizon | Budget | FTE | Quarter |
|---|------------|:-------:|-------:|----:|:-------:|
|   |            |  H1/2/3 |    $K  |     | Q1-Q4   |
|   |            |         |        |     |         |
|   |            |         |        |     |         |
|   |            |         |        |     |         |
|   |            |         |        |     |         |
|   |            |         |        |     |         |
|   |            |         |        |     |         |
|───|───TOTALS───|─────────|────────|─────|─────────|
|   | H1 Total   |   H1    |    $K  |     |         |
|   | H2 Total   |   H2    |    $K  |     |         |
|   | H3 Total   |   H3    |    $K  |     |         |
|   | GRAND TOTAL|         | $4,000K| 10  |         |

ACTUAL MIX
H1: ___% (target: 70%)
H2: ___% (target: 20%)
H3: ___% (target: 10%)

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Validate Portfolio Balance

Check your portfolio against balance indicators:

PORTFOLIO HEALTH CHECK
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

| Indicator | Target | Your Portfolio | ✓/✗ |
|-----------|:------:|:--------------:|:---:|
| Horizon mix | 70/20/10 ± 10% |            |     |
| Quick wins active | 3-5 |                |     |
| Big bets active | 1-2 |                  |     |
| Risk distribution | Varied |             |     |
| First value delivery | < Q2 |            |     |
| Domains covered | 3+ |                   |     |

ISSUES IDENTIFIED:
•
•

ADJUSTMENTS MADE:
•
•

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 7 of 9

Part 6: Investment Roadmap (5 minutes)

Create the Timeline

Sequence your portfolio across the year:

YEAR 1 INVESTMENT ROADMAP
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Q1: Foundation & Quick Wins
Budget: $_____
FTE: _____
Initiatives:
• [Name] - [Key milestone]
• [Name] - [Key milestone]
• [Name] - [Key milestone]

Key Deliverables:
1.
2.

────────────────────────────────────────────────

Q2: Scale & Extend
Budget: $_____
FTE: _____
Initiatives:
• [Name] - [Key milestone]
• [Name] - [Key milestone]

Key Deliverables:
1.
2.

────────────────────────────────────────────────

Q3: Mature & Transform
Budget: $_____
FTE: _____
Initiatives:
• [Name] - [Key milestone]
• [Name] - [Key milestone]

Key Deliverables:
1.
2.

────────────────────────────────────────────────

Q4: Optimize & Plan
Budget: $_____
FTE: _____
Initiatives:
• [Name] - [Key milestone]
• [Name] - [Key milestone]

Key Deliverables:
1.
2.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Define Success Metrics

How will you measure portfolio success?

PORTFOLIO SUCCESS METRICS
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

| Metric | Q1 Target | Q2 Target | Year 1 Target |
|--------|:---------:|:---------:|:-------------:|
| Initiatives in production |  |  |  |
| Value delivered ($ or %) |  |  |  |
| Team capability level |  |  |  |
| Stakeholder satisfaction |  |  |  |
| Learning velocity |  |  |  |

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 8 of 9

Deliverable

Create a complete Portfolio Prioritization Package:

  1. Scored Opportunity Inventory (Parts 2-3)

    • All 12 initiatives scored on value and feasibility
    • Quantified value for top opportunities

  2. Prioritization Matrix (Part 4)

    • Visual placement of all initiatives
    • Quadrant assignments with rationale

  3. Portfolio Allocation (Part 5)

    • Budget and resource allocation
    • Horizon balance validation

  4. Investment Roadmap (Part 6)

    • Quarterly timeline with milestones
    • Success metrics
Part 9 of 9

Extension Challenge

Defend the Portfolio

Prepare to present your portfolio to the CEO with:

  1. A one-page executive summary explaining the portfolio strategy
  2. Clear rationale for what was excluded and why
  3. Risk mitigation plan for the "Big Bets"
  4. Dependencies and assumptions documented
  5. Decision points where you might adjust the portfolio

Practice presenting to an AI assistant playing "skeptical CEO" who asks:

  • "Why aren't we doing more AI? Competitors are moving fast."
  • "This seems conservative. Where's the innovation?"
  • "How do you know these estimates are accurate?"
  • "What if we cut the budget by 30%?"

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