Fall and winter is high season for conferences, and we’re excited to be sponsoring eight different events across North America and Europe between now and March 2017. While we recommend all of these conferences as excellent opportunities to network, learn from your peers, and share your own wisdom on innovation and portfolio management, we recognize that’s not possible for many people. We’ve provided some context on each one to help you pick and choose those that best match your interests. Hope to see you at some of these events! (more…)
Growth is a good thing—it means larger market share, more profit, greater reach. But it also brings challenges, as a company struggles to allocate resources to support growth without over-committing itself. A rapidly growing pharmaceutical company faced exactly this dilemma: the company was consistently missing project milestones due to chronic staffing shortfalls. Multiple project teams were competing for the same key staff members, and it seemed like people with the needed skills and expertise were always in short supply. Complicating matters further, a changing regulatory landscape meant project timelines were fluid, but schedules couldn’t be shifted easily because of the staffing shortages. Ultimately, this confluence of factors was negatively affecting the bottom line.
More staffing was needed, obviously, and the management team had plans to address it, by adding 30 percent more FTEs in the coming year. Even that, though, wasn’t as simple as it seemed: the project management organization (PMO) couldn’t formulate guidance regarding the key positions that should be hired first, because project schedules were maintained in individual MS Project files while FTE forecasts were in a separate cost-tracking system. As a result, it was hard to visualize the aggregate resource demand across all projects and across the different skill sets. Moreover, the resource availability data was located in a spreadsheet belonging to HR, structured at the individual FTE level.
All of this fragmented data storage meant the PMO couldn’t easily tell where resource shortfalls were developing. When development plans changed, the team couldn’t assess quickly whether the right FTEs would be available to execute the new schedule and how other projects would be affected.
To address these issues, and help clarify where and when additional staffing resources would be needed, the company turned to Enrich and the Enrich Analytics Platform. (more…)
We’re often asked, “What’s the best metric for portfolio management?” Executives and managers who oversee new product portfolios want one metric that will tell them, and their superiors, how their portfolios and the initiatives within them are doing. They want one indicator they can rely upon, whether in formal portfolio reviews or informal discussions. But there is no one right metric for all companies or all types of portfolios. In some cases, net present value nicely summarizes the financial case for each opportunity. In others, a simpler metric such as market size is useful (and may be all that is available anyway). Still other portfolios are best assessed using attractiveness scores rather than any hard financial criteria at all.
There is one common thread across all these situations: As the cover of a book hints at what hides within, a metric provides a glimpse into fundamental outlines—the potential value, cost, and risk—of an initiative. And just as it is hasty to judge a book by its cover, a metric is not a replacement for a deeper description or fuller assessment.
So when the metric tantalizes (or raises concerns), where should you turn for more information? (more…)
We’ve talked elsewhere about how EAP can provide sophisticated strategic resource planning and capacity planning. In those cases, the concerns were mostly around staffing—making sure key projects had the right people at the right time and anticipating and addressing staffing shortages. But other resources can benefit from this approach as well. Money, for instance—always needed and often in short supply. EAP’s strategic portfolio planning capabilities can help you figure out the best way to deploy a defined budget. The process isn’t far different from the kind of holistic portfolio review we generally advocate, but it is tailored to accommodate the strictures of a budget-driven R&D program.
Funding a Six-year Plan
One of our clients had a particularly well-defined investment cycle. Because it was federally funded, the organization worked on a six-year funding schedule. Each year, the government provided a budget detailing how much money would be available to the organization in each of the coming six years. With that information in hand, the organization’s yearly portfolio review involved prioritizing its technology initiatives and determining which ones it could afford to support given the promised funding. In the ideal process, the organization would create a plan for the entire funding period, which would then be updated and adjusted each year to account for the actual progress made by each initiative as well as changes in the actual funding, and then extended as the six-year plan rolled forward.
Our latest video covers prioritization by value metrics, when to use productivity metrics, how to build a frontier chart, and when to temper simple prioritization with more sophisticated methods. You can see it here, right now. As always, we’d love to hear your comments and suggestions on topics for future videos.
In most R&D organizations, the portfolio management team walks a narrow line between the project teams and the executives. The portfolio staff polls the project teams for information about each new and ongoing initiative, builds portfolio views, and shares the updated state of the portfolio with executives. In an ideal world, the portfolio team members are like data shepherds, ensuring that critical R&D information stays up-to-date and ever-available for executive needs.
But when all is not well in the portfolio pasture, portfolio teams hear comments like this from the project teams and the executives:
- The review is tomorrow at 11? Oh, I’ll send you a project update tomorrow morning. Okay?
- Project A must have a bigger market than that. Your numbers are incorrect.
- We updated our project forecast yesterday–you aren’t using the latest information.
- We are using a different cost of capital so your numbers don’t tie out with our spreadsheet.
- I can’t use these data when over half the projects haven’t been updated since the last review.
- Who changed these schedule estimates? Nobody asked the operations committee if a six-month slip in deliverables was acceptable!
Knowing the current cost and estimated value of every initiative in your portfolio is nice, but when executives meet for a review, what they really want to know is: What’s changed since the last review, was it good or bad, and why?
The above is true whether a month, a quarter, or a year has passed since the last review; looking at what has changed is one of the fastest ways to communicate portfolio health and progress towards strategic goals. It also builds trust in the portfolio process: executives remember where you left off with them, and starting from that same point establishes a feeling of continuity and stability.
In this post I’ll share different methods for communicating variance. These methods have different use cases, but they all riff on the idea of variance. My examples will come from our cloud-based offering, the Enrich Analytics Platform, but you could build similar views by hand in Excel or other self-service BI tools.
R&D teams often try to compare our offering to the many visualization/business intelligence tools available today. At conferences and sales calls, we hear some variant of: “Why should I use Enrich when we already have a site license for Tableau (or Spotfire, Qlik, Cognos, or another BI — business intelligence — tool) at my company?” Were you thinking something similar? Then this blog post is for you!
Tools like Tableau focus on data exploration, and allow you to build various charts to explore a dataset. They are general tools that allow you to construct bubble, bar, and line charts (and many others). However, by themselves, they aren’t up to the more specific, more demanding tasks involved in portfolio management.
If you review the essential activities associated with portfolio management in the diagram below, it will quickly become clear that portfolio management is about more than data exploration. The Enrich Analytics Platform is uniquely suited to provide the analytical, information management, and visualization capabilities necessary for confident, real-time portfolio management.
You’re probably familiar with Gantt charts, which show project tasks, their duration, and their completion dates. For a specific project, project managers and executives use Gantt charts to quickly review upcoming activities.
When reviewing a portfolio of projects, project managers sometimes continue to use Gantt charts, adding upcoming tasks for all projects to a single chart and sorting by task start date. These consolidated Gantt charts are sometimes referred to as ‘key event maps’, because they show key events across a portfolio.
“Oh, you didn’t hear, Luke? They were pulled to work on project PDE_311 at the last minute.”
“Ugh, just like the bio-statistician that we were supposed to have last month!” said an exasperated Luke.
“That’s the law of the jungle, right?” Percy returned. “PDE_311 is the top-priority project, and we are out-of-sight and out-of-mind.”
“So, what did it mean back in June when our project was ‘funded’, anyway? We never seem to get the resources we request, and you KNOW they’ll be all over us when we slip our deliverable dates…”
This company is making a critical resource planning mistake; have you experienced it yourself?