Looking at Portfolio Management, Dr. R. Cooper and Dr. S. Edgett published an article back in 2006 in PDMA Visions Magazine. Here are some of my top level takeaways:
The authors spell out “The 10 Best Practices in Portfolio Management”. Some highlights include:
- Successful New Product Development (NPD) relies on proper selection and allocation of resources
- Don’t set a project up for failure
- There should be an initial investment is researching and determining feasibility of a project before allocating all the resources to it – there should also be several stage gates set up that determine if the project should continue to get resources (Go/Kill points)
- There are four buckets that projects fall into (because they’re not all the same) and different criteria should be used to evaluate each bucket
- New products
- Platforms and technology developments
- Improvements, modifications, and extensions
- Customer requests
- Scorecards are one of the top-rated, but overlooked methods to successful PPM. To make a correct decision on a project, combined multiple methods should be used because all methods are somewhat unreliable.
- Financial approaches should be used practically – there are some projects that are too short term or too long term for an accurate or full-fledged NPV analysis – a Productivity Index can be used as an extension of NPV
The underlying tone is that there have been tools out there for a while (scorecard) for solid portfolio management, but too often the narrow financial scope (NPV) is focused on.
This is a brief overview of the article that’s based on the book: http://www.amazon.com/Portfolio-Management-Products-Robert-Cooper/dp/0201328143
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