The Product Pulse

Your product pipeline might be perfectly streamlined and efficient. But if you're like many organizations, your portfolio may have some issues that are costing your organization in terms of revenue, product failures, and eventually reputation. Maybe you've wanted to implement a Product Portfolio Management Solution but haven't defined or designed your processes yet. Did you know that it's actually recommended that you go ahead and get started with a PPM solution so you can grow your processes as you go along? Here are some sure-fire ways to gauge whether it's time you invest in a software solution to improve your chances for success.

1. Failed Market Launches
   Has your organization launched unsuccessful products that have blemished your brand or product line? Have you missed critical time-to-market deadlines that have cost real money? Product Portfolio Management allows you to analyze your portfolio before you make the decision on what will be on your roadmap. It enables you to evaluate every piece of your portfolio so you have a complete picture -- the impact on your brand, competition, resources, sustainability, and bottom line. What has a failed product launch cost you? Chances are, a lot more than what it would cost to implement a solution.
   
   
2. Limited Resources
   You've repeatedly heard and our recent Benchmark Surveys have confirmed that the #1 pain point around Product Portfolio Management is too much work for available resources. You may have people presenting great ideas, but you only have a limited capacity when it comes to people. If you say 'yes' to every good idea, you spread your resources too thin and few of those good ideas actually make it to the market on time. Product Portfolio Management gives you tools to run 'what-if' scenarios before you execute. It allows you to perform comprehensive portfolio analysis to understand your current capacity, usually based on role or skill, and then evaluate all of the things in your pipeline to go on the roadmap to ensure they can actually get done on-time with the available resources. When you use your resource capacity as a filtering mechanism, you have a much higher chance of success.
   
   
3. Market and Product Conditions
   Look at the size of your product catalog and the number of markets you serve. If you have a large number of products, multiple projects that deliver a product, a large number of metrics to analyze the performance of each product, multiple markets or global markets, or if your roadmap is frequently changing, you're ready to centralize and automate your product portfolio to maximize visibility and reduce risk. Are you still updating your roadmap manually through PowerPoint? That's a not just a sign, but a neon flashing sign telling you it's time to convert to a formal solution.

Take a look at your current product portfolio and see if any of the 3 signs above are present. If so, you just might be ready to call in reinforcements!

If you've been in product management for a while, you know there are a lot of things you could be doing with your time to manage your product portfolio. But which things are the most important and effective at helping your company reach its goals.

This 2-part blog series will disclose the top 5 game-changing tools that are at your disposal and can make you a hero at your organization, not to mention make your job easier.

Portfolio Prioritization -- "Are we working on the right things?"

The discipline of Portfolio Management isn't new, but applying it in a product organization may be. Your competition is prioritizing their product portfolio so their hottest products get to market. Are you? Here are the things you need to consider when evaluating your product portfolio:

1. Will it drive revenue?
2. Does it align with our corporate and product strategic goals?
3. Do we have the resources to deliver it on time?
4. What is the risk involved?
5. How will this impact the brand?
6. Will this help us leapfrog the competition?
7. What will the sustainability impact be?
8. Will our customers be delighted?

The key is to run multiple 'what if' scenario on products, projects, programs, or features to evaluate how those align with set targets, and whether you have the capacity to deliver. There are powerful tools available to product and portfolio managers that pull all of this information together onto one central page to give executives the information they need to make the decisions that drive the best, most profitable products to market.

Resource Management -- "How do I best utilize my people?"

It's simple math. If you don't have the resources to execute, you can't deliver desirable products on time and on budget. According to our annual benchmark survey on product development, this has actually been found to be the #1 pain point for product development organizations for the past two years. Effective resource management breaks down into 3 key components:

1. Organizational capacity planning
2. Development resource planning
3. Ongoing change management to schedule and resource assignments

If you take this three prong approach to Resource Management, you can expect to achieve these benefits:

• Clear visibility of demand and capacity to avoid resource bottlenecks, reduce risk, and hit launch targets
• Forward and backward-looking resource planning to eliminate resource cost overruns
• Resource management processes that lead to consistent, proactive responses to change

Agile Product Management -- "Why should we care?"

Making the switch from Waterfall to Agile was difficult for me. I felt like I was losing control of the schedule and what was being delivered to our customers. But I soon discovered that Agile actually gave me ultimate control and flexibility as a product manager. In fact, through our Inner Circle program, we regularly show customers what's going on and get feedback from them, involving them in the decisions that need to be made along the way, so I can ensure we're "delivering to delight." But what, specifically, does Agile do for us?

• Iterative sprint cycle ensures we're delivering what customers want
Central repository for all product ideas and backlogs reduces risk and saves time
• Ultimate flexibility with stories and priorities allows us to quickly respond to change
• Testing done throughout development often leads to higher quality and met deadlines

Embrace the change to Agile. You'll come to love it, like I did.

Be sure to check back for our next blog post to learn about the remaining two game-changing tools. Louise Allen, Vice President of Product Management at Planview, will finish our series. I encourage you to evaluate your processes and tools to see if you are maximizing your product development potential.

Not a day goes by in which I am not asked: Carrie, what do you see as the coming trends for product development companies? (Well, maybe a day or two passes without the question -- but with my travel schedule, I can be awfully hard track down.)

Given that, I thought I'd share with you the Top Five Trends for Product Development Companies that I've collected from gurus around the world.

1. Portfolio Management: It's not just for IT anymore
   It used to be that IT was the only part of the organization applying the portfolio management discipline to its decision-making process. No more. I'm seeing a tremendous uptick in the number of R&D and Engineering groups applying portfolio management to the product portfolio.
   
   Why? According to Dr. Bob Cooper, Co-Founder of Stage-Gate and acknowledged braniac, "in order to win when developing new products, you must do products right and do the right products." And portfolio management can help you do both. It's really a natural fit.
   
   
2. Ideas, I need more ideas!
   Here at Planview, we recently surveyed 900+ people in our 2nd annual product development benchmark survey. "Not being able to drive innovation fast enough" has moved up to a top 3 pain point -- from #6 last year -- neatly trading places with "cutting costs without cutting the future."
   
   Driving innovation by getting more ideas into the funnel, and using smart, collaborative software to manage these ideas, is critical as we all go from cost-cutting recessionary moves to growth- and innovation-intensive tactics in this new economic environment.
   
   
3. People, I need more people!
   Ouch. Year after year -- as validated in our benchmark survey -- "too many projects for our resources" is the dubious winner as top pain point that product organizations face.
   
   Companies must place greater emphasis on resource capacity planning as part of the investment decision making process. No longer can they afford to look at their product portfolio myopically based solely on financial impact.
   
   
4. Incremental will only get you incremental
   The economy's back: now, it's about the breakthrough ideas -- creating products that are new to the world and that will drive new revenue. Investing only in incremental innovation -- enhancements and modifications -- is safe, which is great when you're hedging your bets. Your competition isn't hedging its bets. Should you be?
   
   Smart product organizations strive for a balanced product portfolio, with resources (people and money) allocated both to breakthrough and incremental innovation. Just ask our good friends at Kalypso -- they'll point you in the right direction.
   
   
5. It's a green world after all
   Whether it's a household cleaning product or an airline, a product's brand is now encompassing the impact on the environment. Selecting the right offerings for a product portfolio now is as much about their sustainability as it is about price point, market timing, competitive impact, and more.
   
   But while we all want to buy the world a Coke and sing in perfect harmony, the reality is that companies must make intelligent portfolio selections based not only on their green impact but also on their bottom-line impact, and will be making careful tradeoffs to ensure a pipeline geared to deliver the optimal mix of both.

So there you have it, Product Pulse Peeps… the top five trends I'm seeing for successful product development companies. Tell me what you're seeing!

When you think about it, the aim of ANY organization is to maximize resources toward high value. That's easier said than done. What's important to one department may be less important to another. And often it's difficult to determine what's of highest value to the overall organization when multiple parties, each with crucial initiatives, are competing for the same limited resources.

Value and Risk scoring can help. Attributes for determining the value of a project or program may include items such as:

• Regulatory / Contractual Impact
• Socio-Political Impact
• Strategic Alignment and Importance
• Financial Return / Profitability
• Competitive Advantage Impact
• Business Operations Impact / Reliability / Efficiency
• Probability of Commercial Success
• Organizational and Market Leverage / Reusability / Opportunity Enablement

The above scores can be weighted, averaged, and compared with a risk score to come up with a single composite score. Typical risk areas to assess are:

• Technical Complexity
• Program Complexity
• Existing Skill Base
• Availability of people and facilities

Alternatively, some organizations simplify this into a single "Complexity" score that can be subjectively determined and set to low, medium, or high.

Having scores is not a cure-all however. The best alignment of resources should never be left to an automated system. Though a score can give a general hint at a project's relative value, ultimately, what is needed is dialogue.

Use your personal budget as an example. If you have limited funds / resources, and your spouse has important purchases coming up, and you do as well, you may need to have a discussion to evaluate tradeoffs and / or work together toward a creative solution. It is the same in business. Meanwhile, a well thought-out scoring system can help speed up the decision process.

When it comes to implementing time tracking for Resource Management, many companies disagree on the granularity at which they should capture time. Some feel that summary or phase-level tracking is adequate, while others want to track activity at the task level.

Here are a few tips that can help resolve this common dilemma:

1. Manage outcomes, not actions -- Use outcomes instead of tasks in your project schedules and timesheets. This gives a sense of freedom to people closer to the action; meanwhile, outcomes can be linked to milestones and prerequisite outcomes.
2. Manage results, not hours -- Similar to the above; rather than focus on people accounting for a 40 hour week, simply have them enter their time spent against specific outcomes or results, regardless of what it adds up to. This drives the focus toward analysis of where effort is being spent, and away from how many hours people are working, which can be a de-motivator.
3. Consider Daily Time Tracking -- It has been proven that daily time entry is actually easier, not to mention more accurate. People merely track time daily, then they can submit it weekly with greater accuracy.
4. Understand How Time Capture Relates to Your Goals -- Time capture can tell you what was spent in the past, and enables a basis for future estimates, so it has some impact on later allocations. And if time entry includes a contributor estimate of the time remaining (see the next tip), then time tracking plays an even more significant role in predicting resource availability.
5. Institute Contributor Estimates -- As a resource enters time against a specific outcome or task, they should always be sure to revise, if necessary, the remaining time. This can greatly enhance the accuracy of future allocations and thus resource availability.
6. Don't Reserve the Whole Library if You Only Need One Book -- If you allocate resources to phases or projects, they will appear to be booked for months ahead. There will be no way to realistically see their availability for a two-week window of work (or make alterations at that level). If you want to be able to make decisions at a granularity of weeks, then you must allocate resources at that same level.  Same if you want to assess plan vs. actual at that level.
7. Get Everyone on the Bus -- In order to make time capture work, all middle managers must be on board, especially if a culture change is required. Senior management must see to this, as it will take the entire organization's cooperation to make sure this is carried out effectively.
8. Understand the Reasons for Time Capture -- Understanding the situations where time capture is required can help you sell it throughout the organization. Time capture is especially vital in the following scenarios:

• When there's contract labor, in order to assess billed hours
• For government contracts -- it's the law
• For financial labor reporting, especially where regulatory oversight is present
• When people are splitting their time on multiple projects
• When paid overtime is involved
• When work is being charged back to other departments
• When you want to forecast cost at completion more accurately
• When you want to improve your estimating capability by looking at past trends

Collectively, these 8 tips can help you get past the potential roadblock of capturing time for greater resource planning and estimation.

Organizations often cite resource management as their most overwhelming challenge. Despite the best-laid plans, they just can't get a handle on getting the right people available at the right time. Because of this, they sometimes resist taking on new projects and products for fear of the ability to deliver. Or worse, they take on unlimited demand, managing as if they have infinite capacity.

These organizations need a clear picture of resource availability to confidently take on new projects and react to sudden market opportunities. Otherwise, valuable resources are wasted or misused.

While there's no silver bullet for capacity planning and resource management, there are four distinct dynamics that can greatly improve success and help an organization become proactive instead of reactive. Together, these dynamics make up what we can call The Capacity Quadrant. The four components that make up this framework are:

 
• Visibility: This includes improving visibility across three lenses, those of Demand, Capacity, and finally, the System lens (i.e., using a systems thinking approach to identify the many variables that can impact resource workload, efficiency, and productivity).
 
• Prioritization: This requires understanding organizational goals and priorities, creating flexible scoring mechanisms that can encompass all discretionary work (not just large projects), and awareness of the linkages between projects and products on the roadmap.
 
• Optimization: Here you can maximize your resources by focusing them on the most critical work; limiting the volume of primary demand objectives; tightening the resources on secondary objectives; and addressing efficiency issues identified during the whole system analysis.
 
• Iteration: This involves planning capacity and demand at varying levels of detail at different points in the planning horizon. Early on, top-down high level plans are appropriate, with more detailed planning occurring as the work approaches. The two views should be reconciled during each planning iteration.

In essence, by understanding the four key dynamics that impact capacity planning, organizations can demystify resource management, make more informed decisions, and maximize their resources toward high value activities.

Stay tuned for an upcoming white paper on this topic, where I'll be exploring the Capacity Quadrant in more detail.