Managing the Products & Services Portfolio – Part 1
2 February 2018
In today’s fast-paced world, product life cycles are shortening as consumer appetite for newer, better and brighter offerings continues to grow. Product and Portfolio planning enables the business to take control of its future. By planning for growth to determine what course of action is necessary to achieve desired results. Driven by a highly-developed portfolio, the most competitive organisations promote a culture of continuously bringing superior products and services to market, introducing the new, whilst phasing out the old. Class A organisations not only meet customer demand, but predict it, and do so efficiently and quickly to optimise profits.
By deploying the latest practices in computer-aided program and project management, a well-managed portfolio can deliver customer value and performance, and fulfil its purpose of margin development to successfully support the overall strategic plan. How well and how quickly portfolios are aligned and performance of products and services are monitored, is key to maximizing these margins, with intervention to the strategic plan, product and portfolio roadmap and process when expectations are not met.
Driven by Strategy Product and Portfolio is driven by the Strategic Plan, which subsequently informs the product and portfolio roadmaps. These are aligned with the company’s values, deploying the brand strategy through a multi-year timeline and are updated annually, at a minimum, with new insights to maintain a competitive edge. An integrated process monitors life-cycles of products and services so lines can be added or removed accordingly as demand dictates, supporting product leadership. With the incorporation of a technology roadmap, the product and portfolio roadmaps identify core technologies, both existing and new, to facilitate maximum margins.
Integration In an Integrated Business Planning (IBP) process, product plans have to be fully incorporated throughout, assessed in a monthly product review to provide demand, supply and finance the visibility to forge operating links between day-to-day planning and execution. It’s through the Product Review that real-time information is shared and gaps are identified from updated assumptions. This in turn enables informed decision-making for consistent performance improvement, based on real numbers. In advanced organisations, this is enhanced by use of modelling and analytics , to be able to anticipate market changes and dynamically adjust the Product Roadmap accordingly, to maximise return.
Product & Portfolio Management, & Marketing In the age of the consumer, it’s essential to understand that not one customer, channel to market, or product, are the same, and thus a ‘one-size-fits-all’ approach is no longer adequate. Comprehensive knowledge of targeted markets is integral to ensure that product and service development is aligned with demand, with a time phased portfolio plan which adds or removes products to accurately reflect consumer appetites. Furthermore, by segmenting customers and markets, products can be tailored effectively, with segmentation aligning the two sides of the innovation process, product and market, to optimise service.
Gathering insights and intelligence, and monitoring change should be a continual process, identifying gaps and facilitating subsequent adjustments to ensure consistency with the strategic plan. A truly established ‘insights process’ not only will manage anticipated customer needs, but also any unexpected demand to keep the product portfolio competitive – as adjustments are made and new products developed.
Managing and Optimizing the Portfolio, Programs & Projects As consumer attention spans shorten, but expectations increase, organisations need to make sure that product life-cycles adequately support the product and portfolio roadmap, with the right mix of existing, new and developing products and services for a competitive portfolio. However, businesses can’t just give an instant stamp of approval; a prioritisation process exists to effectively allocate resources for pending projects, with checks in place to ensure alignment with business goals.
In Part 2, we’ll be discussing resource planning, technology & innovation, behaviours and performance measurement.
This blog is based on Chapter Five of The Oliver Wight Class A Standard for Business Excellence. To read the seventh edition of our essential guide to managing the products and services portfolio, please click here.