Today, the business dynamics of New Product Development (NPD) is harsh. Even the most successful product development companies are faced with complexities like keeping up with evolving standards, technology requirements, client / user demands, innovations and time-to-market. Other trend is product development cycles are getting shorter and shorter, and the successful ones are finding ways to deliver the most innovative, cost-effective solutions in the shortest span of time. Some of the key challenges in NPD are discussed below.
Challenges in New Product Development
- Lack of real-time visibility into NPD project status in terms of time, resources & budget.
- Lack of planning & poor definition of project scope and unrealistic timescales - Often project dependencies are discovered after project design phase is completed.
- High turnover due to "burn out" of key project contributors because they are working on too many projects and spending too many overtime hours.
- Frequent change of status of projects (i.e., moving from "active" to "on hold" to "top priority" and back) leads to increased resources & decreased productivity.
- Lack of formal process to fully evaluate & prioritize NPD projects based on the greatest business benefit.
Product Life Cycle
Linking Business Strategy to New Product Development
To address the above challenges, NPD companies started to link their business strategy with product development by using Project & Portfolio management (PPM) solutions.
Project & Portfolio Management (PPM) is a term used by project managers and project management (PM) organizations to describe methods for analyzing and collectively managing a group of current or proposed projects based on numerous key characteristics. The fundamental objective of the PPM process is to determine the optimal mix and sequencing of proposed projects to best achieve the organization's overall goals.
For instance, at any point of time a project manager can identify the gap in demand and supply of resources in relation to the requirements of the project. For the higher management, PPM enables to identify mid and long tem viability of the projects and also helps in calculating ROI regarding investments.
Characteristic of PPM in New Product Development
- Create "high resolution" project plans that accurately spell out, in vivid detail, the resources required to complete each task and activity.
- Capture the actual hours spent by all project players in completing project tasks and activities.
- Create summary tables showing planned and actual time spent by each person in the organization on every project to which he or she is assigned in order to demonstrate who's overloaded.
- Document all incidents of resources that are "stolen" across projects, excessive overtime, large-effort-but-ultimately-useless projects, and so on.
By conducting project "post mortem" evaluations, gather information about how systematic PPM might have prevented problems and encouraged successes.
Benefits of PPM in NPD
PPM solution helps a product development company align its project workload to meet its strategic goals, while making the best use of limited resources. Furthermore, existing projects can be accelerated, terminated, or de-prioritized by the allocation or re-allocation of the resources that deliver project tasks. The following are some of the key benefits of PPM in the NPD arena.
- Faster response to changing conditions: Portfolios can be constantly reviewed and altered if necessary to produce the highest returns based on changing situations.
- Improve overall NPD effectiveness through improved IT project visibility & historical insights.
- Improve resource utilization through accurate exposure of project work loads.
- Blending business and IT projects and treating both as contributors to the same goal.
- Focus on what will achieve the product development rather than on the project itself.
- Balances risk across all projects.
- Justifies killing projects that do not align.
- Increase the predictability of NPD project delivery: on time, on budget.
- Maximizes the return on product development investments.
- Increase competitive advantage.
The major benefit however is that PPM allows flexibility to meet changing circumstances and focus on quick deliverables & solutions that are totally targeted to achieve a particular outcome.
About PPM Studio
SemanticSpace’s “PPM Studio” is a collaborative, end-to-end, scalable, enterprise solution that helps organizations in managing projects from inception to delivery.
