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I read recently that 81% of CEOs feel that speed to market in product development efforts is a critical business innovation tactic.¹ The only thing that surprises me about that number is that it’s so low. I think it should be closer 100%.
Hitting the market in a timely manner supports pricing, profit margin, and market share goals. And for those with fixed market windows – like a toy maker facing the winter holidays, for example – time to market is table stakes. To quote one consumer goods manufacturer, “you can’t negotiate with Christmas.”
I recently developed research² that gets to the heart of accelerating time to market, with goals any organization should work toward to boost product development performance. I’d like to delve into those goals and discuss how they can work to the advantage of a product organization seeking to bring innovative products to market.
One fact we uncovered is that many product organizations are trying to make do with technology that was never intended to stretch as far as it is being forced to – and the organizations are suffering. Many, if not most, are using spreadsheets and desktop project management tools to manage their product portfolios. Balancing these complicated portfolios with their many-to-many relationships between products and launch windows requires a lot of coordination. Optimizing plans is very difficult to do with fragmented information and inconsistent product data. Spreadsheets are wonderful tools. But not for this job.
What we and other experts recommend is product portfolio management (PPM) solutions, which can help by providing cohesive information and visually communicating priorities and dependencies between products. Leveraging a PPM solution and its attendant processes can help product teams get innovative products to market faster by streamlining and automating development, eliminating wishful thinking and brute force in favor of discipline and strategy.
So how can Product Development leverage portfolio management as a foundation for innovation and to support time to market requirements?
They can use it to:
1. Get the right ideas in the funnel. When ideas are generated and captured, product and portfolio managers can vet ideas on the basis of strategic alignment, potential value, risk, and resource availability, before adding them to the pipeline. This ensures that resources aren’t wasted on ideas that may in one way be sound but in another way are not high enough value.
2. Diligently balance plans with available resource capacity. This is what it comes down to for so many of us: resources vs. demand. Those who lack visibility into both are essentially flying blind. The right solution and processes help product managers know who can do what, when – and what’s headed their way. This helps them create a portfolio correctly weighted for innovation and other projects.
3. Ruthlessly prioritize investments and develop realistic, balanced plans. The squeaky wheel. The latest craze. The VP’s whim. We’ve all been there, adding an enhancement or a whole new product to the lineup just because someone is yelling the loudest. We all know it’s no way to run a product line. With portfolio management giving insight into the full line – fledgling ideas to cash cows – portfolio managers have a way to objectively assess which projects are a good use of their scarce resources, and which quite simply are not.
4. Make plan priorities and launch windows highly visible, and openly communicate status and issues. This sounds a more obvious fix than it is – and it often comes down to technology. Those desktop tools weren’t built to support enterprise-wide and/or multi-product launches, and so this vital communication often happens verbally, or via hallway-long printouts of Gantt charts that are updated by hand and Post-it notes. Key stakeholders are often unaware of critical changes, and the chaos of the ensuing catch-up is never a pretty picture.
5. Map development projects to commercialization efforts. This follows closely with the above. Projects should be roadmapped with all of their dependencies clearly tracked and with appropriate launch windows for all commercialization programs. This ensures that any slips will give channels advanced notice to update their commercialization plans.
6. Manage risk and uncertainty and plan to succeed (or fail) early. Risk is an inherent part of any product initiative, and the more innovative, the riskier it is. If the plan is roadmapped well, risks and issues may be identified earlier and thus mitigated more easily. Additionally, when insurmountable risk is encountered early, the decision can be made to kill a project before too much is invested; the only caveat is that management must be on board with the kill decision. In my experience, too few companies kill a development project once it’s already underway.
7. Standardize execution processes, deliverables, and metrics. As the saying goes, “you can’t manage what you can’t measure.” It’s startling that, in our bottom-line driven economy, 44% of companies have no consistent and transparent way to measure the value of projects.³ Portfolio management processes are a proven way for development teams to standardize their work and by doing so strip out time and effort by eliminating rework and duplication. Many PPM solutions come with prebuilt metrics in the form of reports and analytics that give insight at different levels of granularity on everything from time reporting to the bottom line. Today’s product organizations simply must have a way to prove the value of what they produce. Executives should demand that.
What’s at stake in the speed to market equation? The first mover advantage for some, basic survival for others. Product organizations have the opportunity to make some fundamental changes in how they approach development and bring the right, innovative offerings to market in a timely manner.
Can product organizations afford not to invest in a PPM solution? Yes, although I believe that the pain of accelerating multiple, complex products through the pipe efficiently, as market pressures continue to grow, will place companies without PPM solutions at a distinct disadvantage.
I would argue, however, that they can’t afford not to implement a disciplined, end-to-end portfolio management process, as it is this that will set the groundwork for a well-prioritized, well-planned, and innovative portfolio of products that hit their markets on time.
There’s much more to the story and you can download a copy of our free report to read more. Please let me know what you think of these tips, and what goals your organization is working towards.
By Jim Brown
Jim Brown Founder and President of Tech-Clarity, Inc., is a recognized expert in software solutions for manufacturers and has 20 years of experience in application software, management consulting and industry research focused on the manufacturing industries. Jim founded Tech-Clarity Inc. in 2002. Since that time, Jim has served in a research and analyst role partnering with other analyst firms including, Technology Evaluation Centers (TEC), The PLM Evaluation Center and AMR Research. Additionally, Jim established Aberdeen Group’s Product Innovation & Engineering Practice after they acquired Tech-Clarity in 2005 and subsequently served as VP and Group Director for Aberdeen’s PLM and Manufacturing Industry Research Practices. In 2008, Jim established Tech-Clarity “2.0″ to continue his mission to make the value of technology clear to business in the Web 2.0 era. Jim is an experienced author and public speaker and enjoys the opportunity to participate in conferences about improving business performance through software technology.
Image: business mechanism from Shutterstock.com
Read the research behind these goals and how to put them into action in Tech-Clarity’s Issue in Focus: Meeting Fixed Product Launch Windows – Managing Portfolios when Time-to-Market is Non-Negotiable, brought to you by Planview.
1. Forbes, Global CXO Outlook: Growth Strategies for 2012 and Beyond, http://images.forbes.com/forbesinsights/StudyPDFs/Global_CXO_Outlook.pdf
2. Tech-Clarity’s Issue in Focus: Meeting Fixed Product Launch Windows, http://www.planview.com/m1/pd/fixed-product-launch-windows/?WT.mc_id=311WP03756
3.Planview®, The 3rd Product Portfolio Management Benchmark Study, http://www.planview.com/m1/pd/3rd-product-portfolio-management-benchmark-study/?WT.mc_id=300RR00156