New Product Development (NPD) brings new blood into organizations by providing the basis for new ideas and new sources of revenue. This should be important to all companies as this is how they grow and stay in operation. Knowing how to manage your project intake is very important. Many companies manage their intake with an Excel spreadsheet. My goal is to show you the advantages of managing your intake and other areas of your project lifecycle with a Project Portfolio Management (PPM) solution.
What is Project Portfolio Management and Why do I Need it for NPD?
PPM has its foundation in investment portfolio management where it was found the risk of an individual investment is better analyzed when viewed as part of the whole portfolio instead of the lone investment. PPM brings the same balance to an organization’s project activities.
By comparing the projects as a part of a portfolio, factors of the portfolio can be managed by tweaking the projects within the portfolio. One project’s mix of high risk with high potential return may not be acceptable by itself, but when mixed with other low-risk projects, it may become acceptable to the company; especially when considering the alignment with corporate goals or the need to bring a new technology to stay competitive. If projects are treated as corporate investments in a portfolio, then corporate approval occurs at the portfolio level and not at the project level.
Creating and managing projects in a portfolio of projects will provides a balance when prioritizing, selecting, and sustaining projects. PPM takes the concepts of a financial investment portfolio and applies them to key evaluation and selection criteria such as the costs of the project, the risks involved in the project, the potential returns on the investment, alignment with the business goals, resource availability/utilization, and available technologies.
Many people have asked if they really need to use a PPM solution since they have been able to initiate and manage their projects just fine in the past. While this may be true for some organizations, a PPM solution may provide a way out of a management quagmire.
A PPM solution should be able to manage the whole product/project lifecycle. During the intake process, a PPM solution should provide the ability to create and maintain an Intake Form. An Intake Form is a centralized way to capture all of the important information needed to support the selection process on which products will be most lucrative to the organization. Once the criteria has been established, and the intake form produced, there should be a mechanism to score the project up or down, and help all stakeholders make data driven decisions whether to progress certain projects over others based on the scoring model.
Once information is gathered on the proposed new product project, you can start analyzing and evaluating it against other projects in your portfolio.
Your PPM solution should allow you to view your proposed projects in line with active projects to evaluate the fit for your organization. Once you have analyzed your alternatives and made the selection, your PPM solution should allow you to approve the project, decide on a project start date, allocate resources to the project and start planning.
Watch our on-demand webinar PowerSteering for New Product Development to learn how you can manage project intake and accelerate the delivery of your product launch initiatives.