There are companies doing business today that launch new products almost entirely without enterprise-class software. Using a combination of spreadsheets and office productivity tools, their product leaders try to pick products, balance the portfolio, manage portfolio risk, ensure resource capacity to deliver against strategy and perform other activities associated with Product Portfolio Management for new product development (NPD). They take their products from the idea stage to introduction, but rarely without problems.
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Findings from the 6th Product Portfolio Management Benchmark Study
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Without a way to more efficiently manage their product portfolios, businesses can suffer serious consequences. They may undertake too many low-priority projects, steal resources from high-value products, drag out new product development and see products fail at an alarming rate. The result? Excessive costs, razor-thin margins, and low-to-no returns on their product innovation investments. Some companies go belly-up before they can regroup.
If this sounds dire, you’re right. Successful businesses accept the need for change and seek out solutions, even if it means a seismic shift in their product portfolio management practices. These solutions can be transformative: First, revitalize the NPD process by adopting a Product Portfolio Management practice that works. Second, automate that practice with an enterprise-class software solution.
Product Portfolio Management is a practice designed to manage all aspects of the products sold by a business. This involves:
- Evaluating performance
- Identifying risks and opportunities
- Prioritizing high-value products
- Optimizing resource allocation across the portfolio
- Balancing the portfolio’s product mix to maximize return on investment
Done right, this practice aligns the product portfolio with business strategy to achieve target revenue and profitability.
Product Portfolio Management for new product development does all of these things, with the goal of maximizing the value of the NPD portfolio. Product development professionals can use Product Portfolio Management to shepherd new products from ideation through every stage of the commercialization funnel. This approach provides the tools that decision makers need to exploit the right ideas, projects and resources to achieve a balanced and profitable product portfolio. Diligent use of Product Portfolio Management strategies allows you to constantly revise your portfolio investments according to changing market conditions, competitive threats, regulatory requirements, resource capacity, pipeline priorities and other conditions.
Some organizations try to manually manage new product development using a gated process with built-in check points. A gated process can be fast, consistent and cost-effective. It can also help develop the wrong products very fast. That’s why a gated process should go hand-in-hand with Product Portfolio Management and technology strategies to help pick the right product mix for the portfolio, whether you’re developing a new product, line extension, brand enhancement, or product fix.
What is Product Portfolio Management Software?
Companies achieve the best results when they adopt Product Portfolio Management software to automate and accelerate the NPD process. Enterprise-class software as a service (SaaS) provides a centralized source of data and a single source of truth for each stage of the commercialization process – from pipeline prioritization, capacity planning and roadmapping to execution, resource allocation, launch and in-market analysis.
Product Portfolio Management software incorporates industry best practices, repeatable gated process templates, what-if analysis tools, performance metrics, powerful analytics and real-time on-demand reporting for enterprise-wide visibility. The software not only puts critical information at your fingertips but also provides guidance throughout the NPD process.
Why Use Product Portfolio Management Software?
An automated Product Portfolio Management process cultivates the right ideas by helping to capture the voice of the customer (VOC). It provides proven tools for picking the right products and projects for a balanced portfolio. Projects are done the right way when they get the right resources to develop winning products. Go / kill decisions come easier and earlier, so losers don’t clog the NPD pipeline. Throughout the process, the software provides the right level of visibility for making on-strategy decisions.
Powered by enterprise-class SaaS, Product Portfolio Management for new product development can drive proven results, as reported by users.
After implementing Product Portfolio Management software, a global manufacturer with 6,700 users launched the same number of products in a four-month period as the entire previous year.
Portfolio Management software shortens project duration by an average of 10%, (The ROI Of Project Portfolio Management Tools). After implementing Product Portfolio Management software, a global manufacturer with 6,700 users launched the same number of products in a four-month period as the entire previous year.
Focus on highest-value projects
In “The ROI Of Project Portfolio Management Tools,” Forrester Research noted that, without portfolio management software, companies allocate an average of 10% of budget to lower-value projects. The software provides the necessary methods and tools to rank order projects by key objectives such as projected profitability and market trajectory. By focusing on higher-value projects, companies can improve their results.
Provide management visibility
When decision-makers and stakeholders can’t see what’s going on in the product pipeline, they can’t make informed decisions about priorities, costs, resources, and risks. Product Portfolio Management software provides that visibility, with dashboards for monitoring metrics both at a granular level and across product lines or geographies.
Visibility into project status, resource impact, total cost of development and portfolio mix can simplify decision-making and shorten time-to-market. One consumer products company reduced its time to market by 70% by automating the gated process and delivering real-time visibility.
Maximize return on innovation
By streamlining the NPD process, an automated system can significantly improve the overall return on the product innovation investment. As one comprehensive solution provider reported: A high-tech manufacturer optimized its product roadmap and reallocated resources to accelerate development of a new product by 12 months in a rapidly growing market segment.
How to Choose the Right Product Portfolio Management Software
Selecting the best Product Portfolio Management software for new product development can be a complex process. Culling the list of vendors requires enough domain expertise to select the optimal solution for your strategic business requirements. As Tech-Clarity advises, “Keep requirements at a reasonable level of detail to prevent paralysis by analysis.”
Before getting bogged down in lists of features and functionality, ask about service and support. Will the vendor partner with you from the day you sign the SaaS contract, through the adoption and implementation process, to help drive a measurable return on your technology investment? Then check references to verify that the vendor has the longevity, scalability, technical and support resources to launch your company on a winning streak.