Product Investment (Project) Value Optimization Features and Functions
Product investment value optimization involves the management of product investments within a portfolio to maximize their individual value. The focus is on continually analyzing the financial merit of the project throughout its development life cycle, as the level of uncertainty grows clearer. This approach provides a quantitative, consistent way to treat uncertainty and risk.
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- Identify technical and commercial risks that can impact return on product investment
- Explicitly and quantitatively represent risk and uncertainty
- Determine probability of failure for each risk
- Assess the potential impact on project value associated with each risk--low end of range
- Assess the potential impact on project value associated with each risk--high end of range
- Assess the potential impact on project value associated with each risk--probable value
- Forecast potential revenue and costs over the life cycle of a project, discounted by risk and uncertainty
- Determine bottom line product investment value discounted by risk and uncertainty
- Visually identify highest risk areas based on impact on value (for example, tornado diagrams)
- Update and track risk or uncertainty throughout the product development life cycle
- Track trends of value, uncertainty, and risk through the product development life cycle
- Visually display trends of value, uncertainty, and risk through the product development life cycle
- Track trajectories of projects on key value metrics (for example, risk of technical failure)
- Provide trending for product investment risk
- Provide history of changes for product investment risk
- Develop valuation analysis of a project based on risk and uncertainty
- Develop graphical model of project economics value
- Automatically translate graphic model into financial analysis model (for example, project value spreadsheet)
- Mechanism or process to provide for comparability of data from different sources
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Portfolio Management Features and Functions
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