Module: Development Develop

Module: Development V ALUE OF P ORTFOLIO M ANAGEMENT Collaborative decision making by senior leadership on the best projects to pursue Consistent decision processes and tools Continued link between strategy and execution Increased profitability (ROI) of new products Decrease time to market (Cooper, 2011)

Module: Development G ATE AND D ECISION Go, No, Send Back, Refer, Park Gate Actions Review all information, ask questions, identify gaps, etc. Review show stoppers. Determine if additional information is needed. Evaluate information against Gate criteria using scorecard or checklist. Make Decision: Go, No, Send Back, Refer, Park Communicate decision to stakeholders (AIPMM Glossary, 2011)

Module: Development E XAMPLE : P HASE 3 G ATE M EETING C HECKLIST (Product Innovation Educators, 2012)

Module: Development D EFINITION OF P ORTFOLIO M ANAGEMENT A set of activities that includes portfolio assessment, resource management, and portfolio review A dynamic decision process for the evaluation, selection, prioritization, and resource management of new product projects (AIPMM, 2011; Cooper, Edgett, Kleinschmidt, 2001; Marjorie, 2004)

Module: Development D EFINITION OF P ORTFOLIO M ANAGEMENT Resource allocation + Doing the right projects Three keys: –Led by senior management –Guided by strategy –Best use of resources (AIPMM, 2011; Cooper, Edgett, Kleinschmidt, 2001; Marjorie, 2004)

Module: Development O BJECTIVES OF P ORTFOLIO M ANAGEMENT Maximize the value of the portfolio – investment in the future, utilize resources well, decrease time to market, etc. Developing a balance of projects (balanced portfolio) – platform vs breakthrough, risk vs reward, etc. Assuring that the projects are consistent with the corporate and business strategy

Module: Development P ORTFOLIO M ANAGEMENT F UNDED /N ON -F UNDED P ROJECTS Project Fit to Strategy Customer Advantage Projected ROI in first year Reward in 5 years Technical & Core Competencies Resources Required (next 6 months) ScoreFund? Green9105M (8)65M (9)91045Yes Blue897.8M (9)75M (10)8844Yes Red109(6M)8(50M)89944Yes Yellow887M(8)(55M)87839No White875M(8)55M(8)8539No Gold970 (5)68M(9)8538No (PIE, 2011)

Module: Development Adapted from Cooper, Edgett & Kleinschmidt (2001). Portfolio Management. Available from Bubble Chart for Portfolio Assessment

Module: Development P ORTFOLIO M ANAGEMENT – A PPROACHES Top-Down Approach (aka –strategic buckets) –Vision and strategy developed first –Management decides where new product resources will be spent –Buckets with ideal spending are defined EXAMPLE: 20% breakthrough, 50% platform, 20% derivative, 10% support EXAMPLE: 60% Business A, 30% Business B, 10% Business C –Projects are prioritized within buckets –New product spending reflects business strategy (Cooper, Edgett, Kleinschmidt, 2001)

Module: Development P ORTFOLIO M ANAGEMENT – A PPROACHES Bottom-Up Approach –Strategy criteria built into the selection criteria used to judge each project –Results in a single portfolio unlike the top down approach –Assures all projects are on strategy –May not result in desired percentage of spending to particular types of projects (Cooper, Edgett, Kleinschmidt, 2001)

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