This article originally appeared in the March 2013 issue of INTERNET TELEPHONY.
The battle cry for most product development organizations today is speed. The sooner a company gets new products to market, the more likely it is to get a jump on the competition. The prize is first mover’s advantage, which results in higher market share, price premiums and a profit margin advantage.
A new report, Meeting Fixed Product Development Launch Windows, states that there is even more at stake for some companies. These companies face non-negotiable market windows that they must hit or the opportunity is gone until the next window comes along, or perhaps forever. For example, a greeting card company “can’t negotiate with Christmas” over a deadline. Missing a product launch date for these companies can be disastrous, resulting in negative brand impact, loss of loyal customers, and diminished investor confidence, not to mention lost sales.
Even if your company doesn’t face do or die deadlines, what can you do to ensure your products launch on time? Not surprisingly, it takes diligent project managers to make sure milestones are met. But when companies miss their dates, the problem usually isn’t poor execution but rather poor planning. Most companies miss crucial product timelines when they try to push too much through their product pipelines at once instead of prioritizing efforts.
Experience and research show that a right-sized pipeline will result in greater throughput than an overloaded one. Planview’s recent 3rd Annual Product Portfolio Management Benchmark Study finds that nearly 70 percent of product development leaders report “too many projects for their available resources” as a primary portfolio management issue.
The first step toward right-sizing the pipeline is to understand what products are actually in it. Many people are surprised to hear that leaders in many product-oriented companies don’t have visibility into their own portfolios. According to the recent benchmark study, product executives today are concerned that they do not have visibility into everything their organizations are working on, let alone current status and issues. It’s difficult to make good decisions without accurate, timely and consistent data.
Clearly things must change. Improving pipeline management may sound like a daunting task, but the truth is that some very simple changes can add a tremendous amount of value. Simply tracking projects, priorities, assignments, statuses and risks in a manner that is central and visible to product executives is a good start. For example, a program manager for a large corporation reports saving millions of dollars by cutting wasteful projects that shouldn’t have been in the company’s pipeline. They were able to identify what was wasteful simply by enabling visibility into the pipeline, which allowed executives to make decisions and cuts, as reported in the Tech-Clarity (News - Alert) report Improving Portfolio Decision Making.
Unfortunately, the information needed to make effective business decisions is rarely available in one place. The most common tool for managing portfolios today is spreadsheet software. Spreadsheets are simply not effective at solving enterprise-level problems because they don’t provide visibility across the business, don’t allow people to collaborate across functions, and are highly prone to errors. Further, it’s nearly impossible to gain a timely, integrated view of projects, resources, status, risk and costs required to manage a product portfolio with a tangled web of spreadsheets.
Companies are finding they need purpose-built solutions to achieve the next level of pipeline and portfolio performance. Product executives need visibility into departmental projects, metrics and resources to effectively manage capacity and drive innovation within their product portfolios, as noted by Maureen Carlson of Planview. Product portfolio management software is designed to alleviate the challenges of today’s product development organizations by enabling portfolio managers to view their portfolios holistically to analyze risk, prioritize strategies, balance resources and manage project execution.
When time-to-market is critical, organizations have to make sure they are right-sizing and effectively managing their product pipelines. By managing resources with a portfolio management approach, companies can develop better, more realistic plans with the transparency required for effective decision-making. With a PPM software application in place, companies can better manage their pipelines to hit their critical launch windows to get a leg up on their competition and help improve their top and bottom lines.
Jim Brown is the founder and president of independent research firm Tech-Clarity (www.tech-clarity).
Edited by Brooke Neuman