Portfolio Management Consulting & Planning

Portfolio management is an important management process to determine where to best invest a company’s resources in developing new products.  The objectives of this portfolio management process is to maximize the value of the portfolio, achieve strategic objectives with the portfolio, and seek balance across portfolio development projects and products.  Avoiding an overloaded project portfolio is a key step to timely execution of projects.

We can assist with developing an organization’s portfolio management process, providing training, and facilitating portfolio planning sessions with management.  The following describes the steps that we might potentially undertake to help a company put in place a portfolio management process and facilitate initial portfolio planning.

1. Review Current Environment
We could spend time onsite to understand the current environment as it relates to defining a portfolio management process.  This would include:

  • Company product lines and product evolution including any product and technology roadmaps
  • General company strategy
  • Roles and responsibilities of product managers and other senior personnel involved in defining development projects and decision-making on projects
  • The ideation process
  • New product development (NPD) process, phase definitions, and gate reviews
  • Business cases and financial justification of projects
  • The gate review process
  • Integration of product planning and business planning (annual and longer-term plans)
  • Statistics and metrics related to development projects including number of projects, project size, project staffing levels, project budgets and project durations
  • NPD capacity and resource planning
  • Existing tools to support gate reviews, resource planning, business planning, etc.

This review could be done through interviews and review of procedures and documents.  We would also gain agreement on the scope of the portfolio management process.

2. Prepare and Conduct a Portfolio Management Workshop
Based on the information collected, we could prepare and conduct a two-day portfolio management workshop to present the principles of portfolio management and develop a preliminary portfolio management approach.  The stakeholders in the portfolio management process would attend this workshop and participate in this initial decision-making process.  The output of this workshop would be a high-level definition of the portfolio process, identification of the roles and responsibilities of the key personnel in the portfolio management process, and a list of action items for further follow-up and definition.

3. Complete Definition of the Portfolio Management Process
We could work with company personnel to more completely define the portfolio management process.  This would be formally documented.  This resulting “process” definition would include:

  • Definition of portfolio planning meetings
  • Timetable or calendar for portfolio management meetings and activities
  • Information and decision-making flow with portfolio management information and planning steps
  • Roles and responsibilities of personnel to support the portfolio management process
  • Definition of the breakdown of product line/business unit portfolio planning vs. enterprise portfolio planning with options ranging from total business unit responsibility to enterprise-level strategic allocation to total enterprise-level responsibility
  • Description of how the gate review process supports portfolio planning
  • Description of how portfolio planning integrates with business planning and resource management
  • Scorecard criteria for projects, high-level criteria for ideas, the scoring methodology, and financial metrics to use as a basis for project prioritization
  • Road mapping methodology and formats
  • Ground rules for portfolio planning

We could conduct walk-through’s and reviews of this “process” with management and finalize this process based on feedback.

4. Pilot the Portfolio Management Process
We could assemble portfolio information and conduct a pilot run of the portfolio planning process.  This pilot run would be an initial portfolio planning session where projects would be prioritized and a portfolio plan would be developed for the planning period.  This pilot run would require that the project information be assembled to support the prioritization and planning of product development projects and ideas for products.  This would include scoring of in-process projects through gate reviews, scoring or proposed projects, and high-level scoring of ideas.  It could also include assembling other necessary financial metrics, preparing product roadmaps for product lines, and developing appropriate analytical graphs and information displays.  We could coordinate getting this supporting information assembled and guide its preparation by company personnel.  We could then facilitate the portfolio planning process.  Based on this pilot planning session, we would work with management to identify any issues or adjustments required to the planning process.

5. Identify Requirements and Evaluate Software
Based on the portfolio management “process” and the pilot planning, we could identify requirements for supporting portfolio management tools.  We would then research and identify potential portfolio management solutions.  We could assist and support company personnel in the evaluation of these software tools.  The decision on which software tool to use would be made by company personnel.  Our role is to facilitate the evaluation process.

6. Implement Supporting Software Tools
Working with the selected software vendor, we could put together a plan to install, configure and implement the portfolio management software tool.  We could then support efforts to configure the software and coordinate setting up the needed portfolio management information in the software tool.  Because some of these tools may require implementation of other supporting project justification, project planning and project monitoring functions; gate review functions; and pipeline management functions, these functions may need to be implemented first and supporting project information created.  It also may be necessary to make adjustments to the portfolio management process based on capabilities or limitations of the software tool.  These refinements would be made as part of the implementation process.

7. Deploy Process and Tools
In conjunction with the software vendor of the portfolio management system, we could prepare a training program for the portfolio management process, supporting software tool, and other needed functions in the software tool to generate the required portfolio information.  Multiple training sessions may be needed to cover personnel in different locations and training may need to be phased.  We could support this training as required and guide the set-up of needed project information.

8. Facilitate Portfolio Management Planning
Once the supporting functions have been deployed and the needed portfolio information has been set-up in the software tool, we could then conduct a portfolio management workshop based on use of this tool.  We would suggest a workshop format of training in the process and tool in conjunction with actual portfolio planning sessions.  We could provide any additional assistance needed to get the portfolio management process and supporting tool successfully deployed.

Further Information
To learn more about our capabilities and the basic principles of Portfolio Management for product development projects, see our presentation on Portfolio Management Capabilities and Approach.  See Portfolio Management Workshop for further information on our interactive portfolio process development and training.

For further information, contact Kenneth Crow at DRM Associates
Email: k.crow@npd-solutions.com