Portfolio Perspectives

In the last blog post, How Structured Is Your Capital Planning Process?, I wrote about my interview with Madison Laird, Executive-in-Residence at Planview. We discussed the extremes of highly structured processes and highly unstructured processes that exist in capital planning; inspired by the newly released report from The State of Capital Planning survey. We also highlighted the need for flexibility in structure, and discussed the key criteria required to ensure the financial planning structure has the requisite flexibility to meet the changing market demands. Here is a quick recap of the criteria Madison mentioned for a "flexible structure":

• The process meets the strategic needs of the decision makers.
• The process gathers both quantitative and strategic input from line of business stakeholders.
• The process facilitates sharing of information as necessary to create alignment across lines of business.

Finally, we talked about the irony of structure -- that a highly structured process can be a more flexible one. Since highly structured process usually have all data-flows, meeting schedules, and roles and responsibilities defined, it is easier to make changes, then identify and adjust for downstream consequences and effects. A planning structure without as much structural definition is "flying blind" when it has to deal with unexpected changes. So, generally speaking, a highly structured planning process is desirable.

However, some organizations put a highly structured planning process in place, and then do not take advantage of its flexible nature. Madison calls this "shadowboxing" your way through the capital planning process and explains that a "somewhat structured" planning process can lull finance into a false sense of security. Usually this results in very dissatisfied planning constituents and a dysfunctional planning process. One of the most common enemies to a flexible process is shadowboxing your way through capital planning.

Shadowboxing Your Way Through Capital Planning

Shadowboxing is an exercise used in training for combat sports like boxing to maintain a fighter's rhythm and form. As part of their training, the fighter throws punches at no one in particular, sometimes even his own shadow. The purpose is to prepare for the actual boxing match. Much like boxing, capital planning requires some level of structure that is ideally flexible yet rigorous and defined. The actual planning process is somewhat similar to a multi-round prizefight, where the winner will be the person who adapts his strategy to defeat his opponent. The loser will be the one who refuses to adapt to the changing dynamics of the fight, treating the live event in the same way he was shadowboxing in preparation.

Most capital planning processes include a series of presentation templates, meetings, and financial spreadsheet templates. These tools represent the fighter's strategy and plan to defend his title. When Finance has these tools in place, it often feels like there is structure or a ”strategy for the fight", but often there is little room for discretion or flexibility.

Moreover, if the structured process is created to lead stakeholders through predefined paths, it is critical to ask if the three criteria for a flexible structure are really being met.

To extend the analogy further, stakeholders who are not absorbing the body blows are engaging in an activity that does not simulate real conditions. It is hard to have a business owner ready for next year's fight when they have not been in the planning ring.

Contrast this with a "flexible structure" where there is some hand-to-hand combat with the data. A flexibly structured planning process ensures data that can be relied on to play out scenarios and to optimize resource and opportunities. For example, those companies who responded that they were less structured than others were also reported a much higher risk of being unable to maximize opportunities, resources, and budgets (18% versus 45%).

Perhaps being somewhat structured versus truly structured is like the difference between hand-to-hand combat and shadowboxing. A company that is meeting the criteria for a truly flexible planning structure is able to rigorously review how to apply resources and budgets against the highest return opportunities.

Register for the 15 Pitfalls of Long-Range Planning where Madison defines the most common pitfalls that affect long-range planning, provides suggestions that help diagnose the issues, and suggests potential solutions. Is your organization engaging in effective capital planning or shadowboxing? Share your experiences by posting a comment below.

Related post: How Structured Is Your Capital Planning Process?, Planning Millions of Dollars of Capital Investments using a Spreadsheet, Is it Sustainable?

At the PMO Symposium in Orlando several months ago, Planview's Expert-in-Residence Terry Doerscher and I discussed a number of topics that seemed to permeate the conference. There were a number of sessions decrying the lack of PMO focus on value and benefits. And several sessions spoke of the growing trend toward lean and adaptive methodologies, and how the PMO can best accommodate and nurture them. There were even a few sessions on organizational adoption and culture change -- mine being one of them, and Terry’s being another -- and the measurement of these often-forgotten factors.

Terry and I agreed that, in a sense, all of these topics were about change -- how to manage it, how to anticipate it, and how to leverage it. In that regard, we began to think of the PMO as a "change management office." This, we surmised, would make the PMO a crucial and indisputable partner in any organization's leadership circle.

In such an environment, the PMO's role would be threefold:

• To foster and manage alignment, including strategic, functional, and cultural alignment
• To enable effective portfolio management as a way to bridge strategy, operations, and finance
• To refocus the organization on benefits and value, thus ensuring the best use of limited resources

In performing these critical functions, the PMO would shift its focus away from primarily monitoring and measuring execution success and dictating approaches, though it can and should provide guidelines, tools, and principles. Project managers and their teams should be empowered to choose the correct approach, with everyone agreeing on which items must be standardized, either for general effectiveness or for reporting purposes.

This leaves the PMO to focus on alignment toward value, paying attention to things like: outcomes and key drivers; ongoing validation of benefits and risks; assessments of competency and commitment across the organization; and, finally, integrated portfolio management of projects, services, assets, and products.

It's this broader view of alignment, combined with a business outcomes/capabilities focus, that enables an organization to embrace change and remain flexible and agile. Indeed, a PMO that's down in the weeds, focused purely on on-time, on-budget, and on-scope measures, is missing its key value to the organization.

To learn more about this topic, register the latest white paper titled, A Seat at the Table: Making Your PMO More Relevant in Times of Change.

Application Portfolio Management (APM) is a process used to attempt to capture application performance and spending over time. Recently, Gartner published a report stating that "Fewer than 10% of Global 2000 organizations understand the full costs of their applications." ¹ Why are so many organizations failing to do this right? I believe these organizations are using a "bottom-up approach" instead of the "top down approach" as mentioned in my previous blog titled, Application Portfolio Management: How Much Are Your Applications Really Costing You?

What's the difference?

The commonly used bottoms-up approach starts with trying to understand and integrate with the asset relationship data in the configuration management database (CMDB). It also requires the gathering of asset data attributes from an asset management system and the creation of financials to track the assets that relate to the applications. Then, any projects that relate to those assets or applications are verified. What's wrong with this approach? It is extremely time consuming to implement. The data may not be accurate in these systems, which then starts an initiative to clean up the data. The goal becomes complete transparency and precision of all assets and applications, as well as building out the service catalog rather than application portfolio management.

My previous blog briefly discussed using an automated, top-down analysis technique that breaks down large application portfolios into smaller departmental subsets that are easier to manage. To be more specific, this top-down approach begins with simply listing all of the applications that IT manages. This can be accomplished by asking each business unit what applications they use most and what drives the most value in the organization. Once the list is created, identify the attributes that should be tracked for each application, such as number of users, business and technical value scores, and the technology platforms the application runs on.

Next, determine costs by:

1. Talking with Finance to determine the current process for tracking application costs. If it's not tracked at the application level, work with Finance to establish better application cost and forecast tracking methods moving forward. It's okay to start with estimating the cost allocation percentage per application and refining over time.
2. Looking at the project portfolio already implemented. Many projects are tied to application releases or implementing new applications. The labor and other costs related to those applications can be rolled into an application portfolio management software solution.

You now have the beginnings of an application TCO and portfolio that enables you to make decisions to eliminate redundant applications or de-scope planned projects tied to non-strategic applications. This will lower your "run-the-business" costs and expenses while fostering a better relationship with the CFO and your business sponsors.

I want to hear from you. What are your strategies for understanding the TCO of applications? Share your experiences and best practices -- leave a comment below.

¹ Gartner, Inc. (Darryl Carlton), "APM Has a Critical Role to Play in Developing Your Application Strategy" March 15 2012.

Related post: Application Portfolio Management: How Much Are Your Applications Really Costing You?

The beginning of any new year brings with it a familiar cadence of activities for our organization. Most revolve around ramping up a fiscal year with our sales team and launching the latest version of Planview Enterprise®. This annual cycle certainly represents one of the most intense times of the year. Preparing for sales and consulting meetings, launching the latest release, and the subsequent GA process make Q1 a big push across the country.

Part of our product launch plan is a comprehensive process of touching base and briefing all of the industry analysts that cover the portfolio management space. Every year, as the portfolio management segment continues to grow, this activity gets larger and larger. Globally, we are interacting with close to 30 analysts across a wide range of sectors. This body of work always provides interesting insights I thought I'd share a few highlights.

Enterprise software is a good place to be. In addition to introducing our latest products, part of these briefings is a review of our previous year performance as a company. We were fortunate to have a very strong 2011, a record year across most metrics. From our analyst meetings it was clear that we did better than average, but it was equally clear that enterprise software companies across the board had strong years. As we continue to read varying reports about the state of the economy, software is a strong sector. In short, organizations are still looking to drive efficiencies in their operations and focus their limited capital on innovation -- software is a good investment on both fronts.

Software as a Service (SaaS) continues to gain momentum and drive growth. It is no surprise that the cloud and SaaS are hot trends in software, but the full impact of this trend. We all read about the pure SaaS players that are the poster children for this trend may not be obvious. But the other side are the hybrid companies like Planview that for the past several years have aggressively retooled themselves to leverage the SaaS trend while continuing the commitment to new and existing on-premise customers. In 2011, SaaS represented over half of our new customers, and our SaaS offering created incremental new market opportunities that were not addressable before. The analysts I spoke with recognize that "established" software companies need to be hyper aggressive to serve this new landscape and this has been our approach.

Markets are built by best of breed players. Across the analyst community there is validation that portfolio management is seeing tremendous growth in traditional segments like IT and also in a variety of line-of-business (LoB) segments. IT product portfolio and program management (PPM) has been a vibrant market for many years and these new LoB segments are emerging markets that require commitment and investment to reach their full potential. In my conversations I think it is safe to say that it is the best-of-breed players, like Planview, that are making these investments. The mega-enterprise software players have too broad a product portfolio to apply the focus necessary. They are not agile enough to navigate the dynamics of these new segments. Someday they will look to harvest the opportunities created, but in the mean time, the best-of-breeds will drive forward. This is common in many categories; we are now living it in PPM.

Product Portfolio Management has "Crossed the Chasm." As mentioned previously, we are experiencing a period of rapid growth in the use of portfolio management. One of these areas is the use of PPM by product development teams looking to make the best pipeline selection decisions and ensure the optimal use of their precious engineering resources. This has been a growing trend, but during this year's analyst briefings there was a sense of critical mass to this conversation. Indeed, when posed the question, every analyst I spoke with agreed that this application of PPM has "crossed the chasm." I will spare everyone a lesson on the technology adoption lifecycle, but this is an important moment in the expansion of the portfolio management discipline. If you want to learn more, plan to attend PIPELINE 2012 on May 10.

Just a few observations from our annual analyst briefings, I hope you find them useful.

I recently had the opportunity to talk with Terry Doerscher, Expert-In-Residence for Planview, about a topic that seemed to strike a nerve when we hosted the recent Webcast, Positioning Your PMO as a Change Management Office. When we got to the segment in the Webcast on operational alignment the questions from the audience came pouring in. How do I measure alignment in my IT organization? What questions should I ask of the business to get IT aligned? How do I even know if I'm aligned?

So, when I had the chance to talk with Terry, I had to ask him more about this. As we learned from the Planview 2010 PMO 2.0 Trending Survey Report, alignment issues are among the most common of operational hindrances. Departmental silos are the greatest single challenge reported by survey respondents, with 68% characterizing organizational disconnects as a "significant challenge" or "critical problem." If you are experiencing similar challenges in your IT organization, I invite you to take just a few minutes of your time to listen.

Listen to the podcast as Terry breaks down the elements that make up operational alignment and how you can (and why you should) work to improve your organization's alignment to begin improving overall operational efficiency and effectiveness.

Are you ready to tackle your IT organization's alignment challenges? As Terry explains, it may not be as daunting of a challenge as it may seem at first. What do you think? How will you work towards being more aligned with the business? Would you consider your IT organization to be well aligned with the business already? What did you do to get to that point? Let me know what you think! I look forward to hearing from you.

I had the opportunity to interview Madison Laird, Executive in Residence at Planview, about some of the findings and nuggets from the State of Capital Planning Study. Madison shared some of his thoughts about portfolio management and long range financial planning which have been shaped by his career at companies like Cisco, Marimba and IBM. Together we looked at some of the top survey responses and examined their implications.

One of the top three risks reported by 45% of financial executives was an inability to maximize resources, opportunities, and budgets.

As we wondered aloud about the root cause behind this trend, we found ourselves asking the obvious question: "What is it about traditional capital planning that limits finance from being assured they are optimizing resource and budgets accurately and acting on the right opportunities?"

After talking through several possibilities, a trend caught our attention. In one section of the survey 17% of participants reported their captial planning process was "very structured" and nearly 50% claimed to be "somewhat structured."

I asked Madison, What is meant by structure in the planning process? He explained that structure refers to the definition and arrangement of elements in the planning process -- elements like roles and responsibilities, data flows, events, tools, etc. Think of it as planning for the planning. Two extremes exist in planning: highly structured planning processes and those with little to no structure.

Highly-Structured

Many companies with highly structured planning processes may be resistant to change. Highly structured processes use flowcharts to depict organization or stakeholder swim lanes, with the time component of the process defined from left to right. These highly structured flowcharts make up the planning process and outline the various data inputs, outputs, and milestones including meetings and targets, and the roles and responsibilities for each swim lane.

Little to no Structure

When companies lack structure in their planning process, they often experience difficulties managing a business with multiple stakeholders, or they tend to conflate the planning and budgeting processes. Companies with relatively little structure in the planning process usually are not maximizing the strategic input that their stakeholders can provide.

According to Madison, the planning structure needs to be flexible. For example, stakeholders need to see a clear path through the planning process, but they also need the flexibility to request productive, timely changes in the process (e.g. revise templates and meeting agendas -- things in the flowchart).

For Madison, a process with a flexible structure meets several key criteria.

1. The process meets the strategic needs of the decision makers.
2. The process gathers both quantitative and strategic input from line of business stakeholders.
3. The process facilitates sharing of information as necessary to create alignment across lines of business.

An irony is that a highly structured process also tends to be the most flexible. The reason is that a highly structured process has all the elements defined, so it is easier to understand the implications when moving them around. A planning process that is somewhat structured (as most survey respondents indicated) may feel more flexible, but it is actually less flexible because a change can be quite disruptive. When an organization using a somewhat structured planning process has to respond to a requested change, the structure many not show all the effects that changes will have.

Consider a basic example. Suppose the decision-making stakeholders in a company decide that they would like to see information from the planning process reflect a five-year time horizon, instead of the typical three-year time horizon. A highly-structured process would allow users to be able to quickly identify the effected data flows, edit the effected spreadsheet templates, identify the impacted strategic shifts, edit the relevant meeting agendas and presentation templates, and leverage the appropriate communication mechanisms to convey the relevant changes to the effected stakeholders. For a somewhat structured planning process, it is unlikely that this type of change could be accommodated mid-stream. Even more likely, a somewhat structured planning process might not indicate the important impacts until it was too late. In these cases, a somewhat structured planning process would almost certainly fail to meet the criteria for a flexible structure.

Next week we will talk with Madison about what he calls 'shadowboxing' your way through the capital planning process, and how structure can lull finance into a false sense of security about the planning process.

I invite you to read the State of Capital Planning Study to gain additional insight on its findings. How would you rate the structure of your capital planning process?

Related post: Planning Millions of Dollars of Capital Investments using a Spreadsheet, Is it Sustainable?

Many organizations spend a significant amount of time managing their product and project portfolios. After all, it's what drives innovation and strategic changes to the business. Usually 30 to 40 percent of the IT budget is dedicated to it. But how are we managing the remaining 60 percent? One area that is consuming a large portion of the IT budget is the applications that support the business. IT organizations should invest more of their time managing their application portfolios from a business value, technical value, and risk and cost perspective. Can you put a dollar figure on how much each of your applications cost each year? Do you know if you have multiple applications that provide the same functions and benefits to the organization but add significant IT infrastructure cost? What kind of Application Portfolio Management (APM) process do you have in place to ensure that figure is accurate?

We use hundreds of applications to run our businesses. When two businesses merge, you get even more, many of which are redundant. Applications also have a useful shelf life, as do the platforms they run on. Companies pour money into managing all of these applications when many could be consolidated, retired, or upgraded. It's a complicated process to manage, yet many still use manual spreadsheets to attempt to track it all. What you get are critical business decisions based on best guesses.

So how do you begin such a monumental task of determining the total cost of ownership of your applications? Gartner not only recommends an automated APM process, but a top-down analysis technique to triage subsets of the applications into one of four classifications: tolerate, invest, migrate or eliminate.¹ By using an automated tool that takes a large application portfolio and breaks it down into smaller departmental subsets, such as all of the applications in finance only, you can filter your applications and set parameters to measure value. Each quarter, you can tackle another subset, making the entire application review much simpler.

So what are the biggest benefits of APM? It improves the analyzing of application portfolios with the top-down approach, eliminates redundant applications and infrastructure that supports those apps, and reduces expenses by eliminating non-strategic apps. Simply put, you finally gain control.

Creating a process that helps you perform application analyses provides an accurate picture of your entire product, project, and resource, and application portfolios.

I'm excited about the enhancements in the latest software release of Planview Enterprise, we have enhanced the APM capabilities and reporting to help our customers achieve complete insight into their application portfolios.

I want to hear from you. What are your methods for analyzing applications? Share your experiences and best practices -- leave a comment below.

¹ Gartner, Inc. (Jim Duggan), "Application Portfolio Triage: TIME for APM," July 2010.

In our personal lives (or at least for many of us) social networking has not only taken root, but has proliferated. Facebook is the de facto social outlet of choice. Recently I have become a big Spotify fan, and my wife is on Pinterest (I am not ready to add another quite yet). There is a reason we embrace these platforms. We are always looking to learn something new that may enrich our lives, and our friends are our best source of these nuggets. Yes, it takes "work" to be active in this social landscape, especially when you add LinkedIn and Twitter for business, but without question the benefits can be very compelling when the power of a social network kicks in.

As many of you are aware, this phenomenon is now charging into the enterprise -- Enterprise Social Networking. This is the next wave of collaboration within the walls -- physical and virtual -- of the organizations where we spend such a significant number of our waking hours. With the introduction of Planview Enterprise 10.4 we are introducing our first foray into this new domain via an integration and partnership with Yammer.

Is this the proverbial collaboration tool that we have been waiting for? The enterprise software space has made many stabs at the collaboration killer app -- email, content management, discussion groups, and SharePoint are all examples. Clearly SharePoint is everywhere, but do the use cases of all of these categories really equate to collaboration? I would venture to say no -- anything that feels like a "repository" does not equal collaboration in my opinion. Sure there is value to sharing stuff, but collaboration requires an interactive dialog, and that is the new ground that platforms like Yammer are bringing to life.

We have deployed Yammer internally at Planview and the notion of discovering nuggets within our company has already happened multiple times. As I said earlier, this nugget-effect is what makes the platform compelling and makes me come back. I routinely learn about new customers going live in record time, about successful sales calls (and some learning experiences), and gain real-time market intelligence from across the globe. I did not see all of this activity in real time before Yammer. At the same time, I can share my own feedback on calls with analysts, commentary on company news, and note industry events with the company in a low touch way that does not feel as invasive as the dreaded "company all" email.

This feels like real collaboration to me, and it is hard to imagine that it won't become more pervasive in the enterprise. Remember, most people under the age of 25 think that email is old school, and many have spent much more time in Facebook than email during the course of their lives. This reality is going to have a major impact on how this technology permeates the enterprise in the years to come. From our own experience it still has to mature from a company-wide, praise-based medium to one where teams collaborate on real work. The next phase is the discovery of nuggets at the everyday work level, and not just the corporate communications level. We think the integration between Yammer and Planview Enterprise has the potential to bring this maturity to life for our users.

Overall, I have no doubt that enterprise social networking will become a mainstream enterprise capability. There are too many people using these tools in their everyday life to not expect the cross over. Will Yammer, Chatter, and Jive end up owning these platforms, or will we all end up rewriting our apps with a social UX? It is still too early to tell. Either way, it feels like real collaboration is here and we are excited to take this first step with Yammer and Planview Enterprise 10.4.

I want to hear from you. What do you think about Enterprise Social Networking and what have you done within your organization to improve collaboration and communication among employees? Leave a comment below and share your experiences and insight.

As a follow up to a recent Webcast I participated in titled, The Missing Perspective: A Resource View for Service Driven Organizations, I wanted to begin a dialog around the key take-a-ways addressed in the Webcast as it provides a new perspective and insight into who is using Services Resource Planning (SRP) and why. I have an interest and passion for this topic based on my experience and seeing our customer success. Presented in a three part blog series, I will cover the differences between SRP and Professional Services Automation (PSA), the pain service businesses are facing in today's global economic climate and finally the requirements, key drivers, and recommendations for optimizing your service driven business. To begin the conversation this post will address the differences between SRP versus PSA.

SRP versus PSA

Contrary to traditional thinking, SRP and PSA solutions serve different markets and bring contrasting functionality and value to the table. PSA provides a high level view of what needs to be done in the business and works for everyday mechanics but it lacks functional depth and visibility into critical areas like resource management, demand management, engagement management, utilization optimization, revenue forecasts, and project portfolio management. SRP provides both high-level and in-depth knowledge around these critical components so service-driven companies can seamlessly manage execution to delivery while maximizing margins.

Understanding the Bigger Picture

A service-driven business is intently focused on how to continuously improve their "Quote to Cash" process in their services business lifecycle. On the quote side, the CRM system is used to manage opportunity, sales forecasts, demand snapshots, etc. On the other end, there's the cash side with the ERP system effectively used for invoicing and processing financial reports. The gap that sits in the middle of the quote and cash bookends is often referred to as the "Planning and Execution Gap." Service-driven businesses are always trying to balance current projects and forecasts, and require in-depth resource management functionality that can handle global, complex enterprise requirements. While resource management remains a company's biggest pain point with project execution coming in a close second, companies are typically unaware that there is a solution available that provides this visibility and balance they are striving to achieve.

PSA solutions are wide but very narrow. For global service-driven enterprises, a PSA solution will not work because of its lack of depth in resources and project management. SRP fills the gap and provides organizations with visibility not found in PSA solutions and is the 'middleware' that addresses the complexity of how an organization delivers value, manages costs, directs critical resources, and generates profitability. From a strategic standpoint, companies can really look ahead to what their organizations need are based on demand. SRP is the market that will service these large enterprises concerned about the following:

Key Drivers for SRP:

• Resource Management
• Demand Management
• Engagement (project management)
• Utilization Forecasts
• Project portfolio management

Organizations that would benefit from an SRP solution are global with thousands of resources (human and non-human) that are project-driven with a need of greater visibility into revenue forecasting and margin analysis on their engagements.

If you are interested in watching the Webcast,
The Missing Perspective: A Resource View for Service Driven Organizations featuring from me and Margo Visitation, Vice President and Principal Analyst at Forrester Research, you can register and watch the on-demand recording any time.

I'd like to hear from you. Share your experiences and best practices related to managing the "Planning and Execution Gap" and post a comment below.

Product Development managers know how critical it is to develop products people want. How do you figure that out without simply guessing? How do you ensure your choice of which product or service to produce wasn't just your opinion? You need customer-driven data. Here are my Top 5 Tips on how to get it right:

1. Ideation

Never underestimate the power of the masses to give you the best ideas. By opening up the question to the world, or even just your customer base, you will be amazed at how many great ideas you can generate. You can simply ask your internal customers, like sales and support, or find key constituents who are passionate about the topic. The key is to choose an audience, maybe 10-15 customers, that is varied enough to capture the true market yet narrow enough as not to overwhelm. At Planview, we use the Agile process that enables our target audience to participate throughout the entire lifecycle and see progress every two weeks. The product (or service, project, etc.) can be refined with each iteration, giving us flexibility with inevitable changes.

Refinement. Once you have the ideas, you need a mechanism to narrow down the choices. We incent our target audience to vote on them. Again, the Agile process enables our audience to remain involved in the process beyond ideation. Because we are using the same audience from the ideation phase, we can ensure we are capturing the voice of the market, not just the voices of our executives.

2. Alignment

Now that you have a list of plausible ideas, you need a mechanism to align them with your strategy. With clear strategic goals and set criteria, you can score the ideas based on key metrics, such as revenue, market share, new markets, etc. You must decide what's important and then measure the ideas to find the absolute best ones for your company. Make the criteria visible to the company so everyone can understand how each idea was scored.

3. Capacity

With your best ideas in hand, it's time to estimate your capacity to develop them. "What if" scenarios allow you to imagine specific situations and how they would affect resources, revenue, time lines, and other criteria. With this data, you can make sound decisions to prioritize ideas based on real information. Many companies still do this process manually in spreadsheets, adding tab after tab with capacity and financials. But if something changes, which it always does, it's ridiculously time-consuming to make those changes to static spreadsheets -- even with pivot tables. An automated process saves countless hours of time and risks for errors.

4. Measurement

After you develop and release the product (or service), you need to measure the results. What was the actual versus estimated revenue? How long did the project take? What did it cost to get it on the market? Actuals help you improve the next planning cycle. Comparing actual results is much easier and accurate when it is done with a product development tool rather than spreadsheets and manual reports.

5. Repeat

Although your process should remain constant, your plan will constantly change because there are so many dynamic factors in play. The ability to see where you started and track your progress throughout the product development cycle enables you to make adjustments towards best practices.

Creating a process for capturing the voice of the customer is essential to developing the products people want. In fact, we followed this process for our latest software release and incorporated 320 customer-driven enhancements.

I want to hear from you. What are your methods for capturing the voice of your customers? Share your experiences and best practices -- leave a comment below.