Product & Service Portfolio Management

Improve product line realization via the transformation of the product portfolio governance process for optimum viability.

The introduction of new products into the marketplace comes with substantial risks. Features, timing, market acceptance, and price/cost balance are all important issues to consider. Also critical is the optimal use of capital employed to convert concepts to products. Under today’s business conditions, at risk capital is extremely limited. The issue facing many product management leaders is how to “release the best product to the market” while making optimal use of limited investment resources. Concepts selected for development should be justified when compared to the next best alternative for funding and/or resource consumption. However, in most organizations, no process exists to objectively determine which projects are the best to initiate or retire. Typically, the champion with the most political leverage wins the decision to invest, regardless of the true financial viability of the project.

The answer is to transform the existing product management processes while leveraging the resources currently in place. The optimum viability of potential new products can be realized through the implementation of a product portfolio management process that focuses on strategic objectives and financial performance thresholds. Six Sigma methodologies are widely proven to improve manufacturing operations. What is not widely recognized is that these same principles can be applied to the product management function. Customer and business defined critical-to-satisfaction (CTS) metrics need to be established before any concept is up for review/funding. This yields truly objective selection criteria to govern project starts and stops. With objective CTS metrics, the management team has the decision criteria required to make the right project decisions (start/stop) earlier in the process; delivering the most influence with minimal overall effort. (see figure 1)

TransR Corporation reference to Foster and Gluck.

Through this deployment of Design For Six Sigma (DFSS) and other methodologies, the board room can be transformed to leverage its resources to optimally govern what products are being brought to market. What was a collection of fragmented decisions, is now a high performing process that delivers world-class product viability governance - "releasing the best".