Project Metrics: What’s Behind the Numbers?
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.
Don’t judge this book by its cover; take a look inside!
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…)