Portfolio Management Features and Functions
Portfolio management adds discipline and structure to determining which products and product innovations should be pursued. Portfolios of existing products, as well as product innovation investments can be rated and prioritized based on financial value to the business; strategic value to the business; optimal balance of products and product investments; and available resources. By providing an unbiased decision support environment, companies can take product decisions beyond politics to strategic, business decision making.
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Corporate Objectives Definition
In order to evaluate the value of the product portfolio, it must be associated with corporate objectives. Corporate objectives must be defined clearly and associated with measurement criteria in order to evaluate the value of individual investments with those objectives.
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Portfolio Definition
Portfolios can be defined in many ways in order to obtain a specific view of the products. Portfolios may be aligned by corporate objective, by business unit, by product line, by customer segment, and many other ways. These portfolios must be flexible to support portfolio analysis in dynamic situations such as realigning products and product categories, or merger and acquisition activity.
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Product Investment (Project) Definition
The base definition for the product investment and basic information about the overall investment.
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Product Investment (Project) Metrics
In order to provide objective measurement of product investment value, investment metrics are required. These metrics can be based on financial value, strategic value, potential return, risk, and many other factors. The intent of the metrics is to provide decision making on facts as opposed to politics.
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Product Investment (Project) Scoring
Product investment scoring is the process of evaluating product investments in an objective manner. Products are scored based on their value to the business in terms of support for corporate objectives, financial return to the business, and project status or health.
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Portfolio Balancing
Portfolio balancing is the process of reviewing current and potential investment options as a whole to ensure an optimal mix of products. Portfolio balancing is frequently done in a visual manner, and frequently uses "bubble diagrams." Balancing a portfolio can involve reviewing the balance of projects in relation to risk versus reward, investment by corporate objective, investment by product category, or many different criteria based on the objectives of the business.
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Product Investment Monitoring
Monitoring involves active alerting based on metrics, dates, and other criteria, as well as documentation and prediction methods.
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Product Investment (Project) Value Optimization
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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Portfolio Value Optimization
Portfolio value optimization is the process of deterring the actual value of a portfolio of product investments in order to return the highest value for the investment in developing the products in the portfolio. Project values are based on structured analysis and provide a strategic, business level view of the portfolio to support the development of higher value product portfolios. Key requirements for developing portfolio valuations are the proper assessment and interpretation of uncertainty and risk that is associated with the projects and the ability to assess the value of products at all stages of the product life cycle.
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Product Development and Portfolio Management Features and Functions
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