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Monthly Archives: August 2012

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23 08, 2012

R&D Portfolio Management Software Buyer’s Guide

By |2017-05-23T15:42:03-08:00August 23rd, 2012|Blog|0 Comments

It’s that time of year again: We find more requests for proposals (RFPs) in our inbox during the late summer and early fall than any other time of year. RFPs vary dramatically in length, complexity, and level of ambition. In a spirit of cooperation, allow me to make some suggestions about those RFPs, and about the procurement process in the large. Begin by singing the next line to the tune of The Beatles’ “Revolution”.

You Say You Want a Portfolio Management Software Solution

R&D portfolio management software tools are very useful, but they won’t take the place of an effective process for project valuation, communication, and portfolio decision making. When deployed in the context of an existing process, a portfolio toolkit can reinforce that process and remind users what comes next. We recommend that you clarify what you are looking for by asking your team the following questions:

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16 08, 2012

Seven Warning Signs that You Need to Step-Up Your R&D Portfolio Management

By |2017-05-23T15:42:03-08:00August 16th, 2012|Blog|0 Comments

When we engage with a client, our primary objective is to ensure that they are investing in the right projects: Those in closest alignment with their strategic goals. Without proper attention paid to project execution, however, you’ll never unlock the potential of your chosen projects. Last year we blogged about the distinctions between operational and strategic R&D portfolio management and the critical nature of both activities. The two terms have often been contrasted with a phrase like this:

Strategic R&D portfolio management ensures you are working on the right projects, while operational project management ensures the projects are done right.

It is a useful aphorism, but separating the activities into completely discrete tasks is illusory: insights gleaned during project execution always inform your chosen project set, and refinements to your strategy and resulting portfolio will always affect how and when you execute. So in reality the activities are inextricably linked in a healthy organization. All activities ultimately serve the same goal: Delivering novel products that delight the customer.

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6 08, 2012

Tornado Diagrams 101

By |2017-05-23T15:42:04-08:00August 6th, 2012|Blog|0 Comments

As we have said before, every forecast you’ll ever build is wrong. The truth may be out there, but due to a lack of perfect information about the future, you won’t be able to reveal it before your project review meeting.

There is a paradox here: The more you insist on the truth, the more likely you are to deny the uncertainties obscuring it. Alas, denying the existence of those uncertainties distances you still further from the truth. So, take a deep breath, and let go of your desire to know the truth. Now you are ready to manage (dare I say embrace?) the uncertainty standing between you and the truth. Managing this uncertainty is the key to good forecasting. By effectively managing uncertainty, you’ll be able to honestly assess the value of your forecast and, in turn, make an honest statement about the value of your project.

A tornado diagram can help you find your project's pot of gold.

A tornado diagram can help you find your project’s pot of gold.

As a forecaster, the key question you need to answer is: “Is my forecast precise enough to make a confident decision?” If it is, hooray! You are ready to make an investment decision. If the answer is no, then you need to gather more information. One of the most useful and easiest-to-understand methods we have to assess our confidence in a forecast is the tornado diagram. Using a tornado diagram, we can assess how much our forecast might change if things go better or worse than anticipated. We can also assess which uncertainties have the greatest impact on our forecast—those are the very inputs we should research further if we want to tighten up forecast precision.

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