A sound Portfolio Management will enable you to allocate your scarce resources to the right projects, so that you can achieve your innovation objectives. In order to get portfolio management working for you you most likely need suitable product portfolio management software. In this article I demonstrate how you can easily set up basic product portfolio management using Nupe software.
Strategic & tactical portfolio management
In portfolio management a distinction is made between strategic and tactical portfolio management. On a strategic level the main decision is to allocate the available resources among several strategic buckets. For example based on the level of innovativeness. On a tactical level, projects are traced through the innovation funnel. Reviews are taking place and it is being assessed whether the right projects are being executed. In the go/no go moments decisions are made whether projects are being continued or not.
Innovation funnel (tactical portfolio management)
Not all ideas in your company are realised. Normally, at some point in time someone decides whether an idea is worth the while of pursuing it. Also in next stages it is critically assessed whether a project should continue. This is pictured in the following innovation funnel. The process itself can also be referred to as a product development process. As you can hopefully deduct from this picture, the process itself is not linear but iterative.
Product Portfolio Management Software
A lot of Product Portfolio Management is available, for example Planview, Accolade of Sopheon, Flightmap and Portview. Most often these are thorough and extensive tools in which you can integrate project management, business cases and many more things. Should you decide to start working with a solution like this, it also means a considerable effort, implementation time, cost level and training of employees is required.
Question is whether this is really necessary for small to midsized and in some cases even for larger companies. You have to ask yourself what information is really relevant? Who will be using the software? A combination of existing solutions completed with a user friendly portfolio management tool like Nupe is in most cases sufficient. In the next part I will elaborate on which tools you can use in which stage, plus also demonstrate how Nupe can be used. This software program (www.nupe.com) is free of charge in case you use the default settings and restrain usage to a very limited number of employees.
Information requirements per stage
Idea generation & screening
First, you will have to make sure there is plenty of input from new ideas. As many ideas as possible are required to eventually identify a few pearls which will continue their way through the funnel. Ideas can come from employees, but also customers, suppliers and other stakeholders are good sources. Often spontaneous creativity is limited to small improvements of existing products. In order to develop a balanced portfolio you should also be thinking about the products of tomorrow. There are several ways to stimulate this more radical innovation in a structured way, for example certain brainstorming methods.
Idea storage can take place using standard Office programs. It is convenient if someone is (made) responsible for the process of screening these ideas. He or she should not do that by himself, but has to make sure that it happens on a regular basis. Based on clear criteria which can be different per organisation, it is decided which ideas move to the next stage.
Concept generation & selection
Ideas that have passed the first gate can now further be developed into concepts. In the tool Nupe you can create ‘projects’ for these concepts with a short business description. By using status approved or unapproved you can capture whether a project made it through the concept selection gate.
In this way you can create multiple projects within a portfolio. In one overview you can subsequently see which projects are still in concept stage as can be seen in the following picture.
3. Concept validation & review
A concept can be validated in a number of ways. The way you do this also determines the way or process you use as the product or service is being developed. Depending on what kind of innovation it is, a number of possibilities exist. In the following picture you see a high level overview of when which product development method is most suitable.
In Nupe a number of templates are available in which a certain process is used. But even your own company specific staging can be uploaded through Excel (in Nupe’ premium version). By choosing a template and inviting project members and instructing them to capture their deliverables in Nupe, you know exactly where you stand and who is doing what. It is also possible to attach the most relevant docs in a certain step.
Whether a project continues to the next stage is depending on criteria that you have set for this purpose. It is also possible to make someone ‘owner’ of a step and make him or her responsible for approval. But you can also assess how this project is scoring against other projects based on predetermined KPI’s.
Project Guardian- Market attractiveness Project Guardian- Delivery capability
Nupe also has the possibility of scenario-analysis, in which you can drop or add projects to your liking, and instantly calculate the effect on your portfolio.Realisation & validation
Realisation and validation
Now that the project made it through the concept stage, the product needs to be build. This is often the stage that the idea turns into a formal project, with project management and supervised by a project manager. Through Nupe you can exactly follow in which stage which project currently is. Whether the project is delivered through waterfall, agile or leanstartup method, progress in stages can be tracked. In the next example you will see all active (=coloured projects) within a portfolio in one overview.
Nupe is not a project management tool, in which features like detailed resource planning, GANTT charts etc are integrated. It is intended to monitor high level the progress through the entire process, making sure that all steps in the process is actually followed. There is no necessity to integrate or connect existing systems to Nupe. As a custom development it is possible to connect though. Existing systems remain active next to Nupe, but you will have the benefits of a good thorough overview, scenario analysis and a sound process that is actually being adhered to.
Now that your product or service is ready, you decide based on validation (eg customer research etc) whether you will actually go live. Also in this case a standard process flow can be used as can bes een in the next example.
Information requirements on a strategic level
Let’s say you have decided to allocate your innovation budget as follows:
- 40% product improvements
- 30% new products
- 30% out of the box innovation
However, you have organised your portfolios based on customer groups. So, all projects for customer group A are part of portfolio 1. It is then possible to create a portfolio ‘product improvements’, and allocate a single project to two (or more) portfolios. In this ways you can set up different views to monitor your portfolios and asses one portfolio against another one. KPI’s are formulated on portfolio level.
Easy, online and affordable
An important advantage of Nupe compared to other product portfolio management software tools is, that it is so simple, intuitive and visually attractive. Check this statement by creating your own portfolio in www.nupe.com and you will see this is really true. You will also find the demo portfolio I have used as an example for this article. Should you decide to work with Nupe, a day or two of preparations should get you going.
Next to this, Nupe operates in the cloud, and is fully responsive (accessible through all devices). Safety of your data is guaranteed. If you use default templates Nupe is free of charge for one or a very limited number of users. From 5 users you pay a monthly fee (EUR 23,- per month per user for the base version) , which is modest compared to other portfolio software providers.
In case of questions about Nupe or other stuff, do not hesitate to contact me!