Mtg' 3 Product Not Project Planning

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Mtg. 3 Product (Not Project) Planning

• Integration of Organization Strategy with Projects

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Product Development Process
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Product Development Process
Phase 0
Planning
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The Product Planning Process

• Occurs before an NPD project is formally approved
• Supports the broader business strategy of the
  company
• Addresses these questions
• What product development projects will be
  undertaken?
• What mix of fundamentally new products,
  platforms, and derivative products should be
  pursued?
• How do the various projects relate to each other
  as a portfolio?
• What will be the timing and sequence of the
  projects?

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Business Strategy

• Every project should contribute to the
  organizations strategic plan
• Every project manager needs to understand the
  strategic management process

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Strategic Management Process

• Review and define the mission of the organization
• Set long-range goals and objectives
• Analyze and formulate strategies to reach
  objectives
• Implement strategies through projects

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Strategic Management Process
Strategic Management ProcessIncludes Four
Activities 1. Review and define the
organizational mission.2. Set long-range
goals and objectives.3. Analyze and formulate
strategies to reach objectives.4. Implement
strategies through projects.
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Gaining Project Approval

• Prepare for an initial screening
• Minimal use of resources
• If it passes the initial screening, prepare for
  the next level of screening
• Additional resources involved now

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Initial Project Candidate Screen

• A gentle screen
• A handful of key must-meet, should-meet criteria
• Strategic fit?
• Market attractiveness?
• Technical feasibility?
• Killer variables?
• The first decision to commit resources

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Second Level Screening Data

• Build the business case
• Develop the business strategy

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Business Strategy Rationale

• What is the product who will it be sold to?
• Target market (intended users)
• Product concept and benefits delivered
• Positioning strategy, including price point
• Products features, attributes, requirements
• Why invest in this project?
• Project justification, financial analysis, risk
  assessment
• What is the plan?
• When, by whom, at what cost?

Product Definition
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Building the Business Strategy

• Key First Steps
• Preliminary market assessment
• Preliminary technical assessment
• Preliminary manufacturing appraisal
• Preliminary financial analysis

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Preliminary Market Assessment - 1

• Key Steps
• Assess market attractiveness and potential
• Gauge possible product acceptance
• Size up the competitive situation
• Sculpt the product (shape the idea into a
  tentative product design)

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Preliminary Market Assessment - 2

• Key Actions
• User needs-wants studies
• Value-in-use study (economic value to the
  intended customer)
• Competitive analysis
• Concept testing (test the idea for the product
  with potential customer base)

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Preliminary Technical Assessment - 1

• Focus on the technical feasibility of the project
• Translate customer needs/wants into technically
  feasible solution
• Demonstrate the technical feasibility
• Identify technical risks with the proposed
  solution
• Safety, health, legal, regulatory

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Preliminary Technical Assessment - 2

• Key Questions
• Approximately what will the product specs be?
• How would requirements be met technically?
• What are the odds the solution is feasible? At
  what cost?
• Do you possess the technical capability to
  develop it, or will you need a partner?
• Can the product be manufactured or produced? How,
  and at what cost?
• What IP and regulatory issues are involved?
• What are the key technical risks?

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Preliminary Manufacturing Appraisal

• Key Issues
• Manufacturability
• Costs to manufacture
• Investments required to manufacture
• Sustainability questions

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Preliminary Financial Analysis - 1

• A quick financial analysis
• Develop preliminary estimates
• Sales
• Costs
• Investment
• Payback (and break-even point)
• Risk

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Preliminary Financial Analysis - 2

• Key Actions
• Market size and share estimates pricing
  expected revenues
• Preliminary technical assessment cost estimates
  and profit projections
• Technical manufacturing assessments estimates
  of capital or equipment needs
• Marketing requirements launch costs
• Payback period and discounted cash flow analysis

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Product Development Cash Flow
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Project Screening Process
Projectproposalidea
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Project Screening Matrix
Stay within core
ROI of 18
plus
Strategic fit
Urgency
new products
less than 1
loyalty
Weighted total
competencies
25 of sales from
Reduce defects to
Improve customer
2.0
3.0
2.0
2.5
1.0
1.0
3.0
Project 1
1
8
2
6
0
6
5
66
Project 2
3
3
2
0
0
5
1
27
Project 3
9
5
2
0
2
2
5
56
Project 4
3
0
10
0
0
6
0
32
Project 5
1
10
5
10
0
8
9
102
Project 6
6
5
0
2
0
2
7
55

Project n
5
5
7
0
10
10
8
83
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Project Priority System
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Next Steps

• Passed the initial screen?
• Passed the next screen?
• Given a high-enough priority and sufficient
  resources to proceed?
• IMPLEMENT! Start the Concept Development

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And now, a little about product portfolios .
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Succeeding at New Products

• Two ways to succeed at NPD
• Doing projects right
• Doing the right projects
• Doing projects right
• Effective project management, cross-functional
  teams, VOC
• Doing the right projects
• Effective portfolio management
• Best procedure Do the right projects right!

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Priority Management An Elusive Goal

• Portfolio management is about
• Resource allocation
• Investment of money, people, equipment
• Project selection
• Enduring a steady stream of big new-product
  winners
• Strategy
• Operationalizing the business strategy

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Four Main Challenges in Portfolio Management

• Resource balancing
• Demands usually exceed supply
• Prioritizing projects against one another
• Many projects look good, especially early on
• Making Go/Kill decisions in absence of solid
  information
• Upfront homework often substandard
• Too many minor projects in the portfolio

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Too Many Projects, Not Enough Resources

• Not enough resources and/or resources not
  allocated effectively
• Negative effects
• People are spread very thinly across projects
• Corners cut, key activities omitted, quality of
  execution compromised
• Time to market suffers
• Projects end up in queue waiting for resources

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Project Selection Methods Fail to Discriminate

• Most project selection tools (scoring models,
  financial models) weigh a project against some
  objective criteria
• Many projects can meet the criteria
• Lack of discrimination among projects
• List gets long, resources spread thin
• Forced-ranking required to prioritize
• Means making tough decisions

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Go/Kill Decisions Without Solid Information

• Up-front homework rarely done well enough to
  provide quality of information needed for sound
  decisions
• Weak preliminary market assessments
• Barely adequate technical assessments
• Dismal market studies and marketing inputs
• Deficient business analyses
• Quality information up-front increases the odds
  of doing right projects right

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Too Many Small Projects, Too Few Hits

• Shortage of majors hits, big breakthroughs
• Preoccupation with financial results and
  over-emphasis on shareholder value
• Management impatience desire for quick hits
• Lack of discipline
• Dynamic marketplace makes predicting difficult
• Difficulty in finding major revenue generators
• Absence of a product innovation STRATEGY
• Lack of resource allocation across project types

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At the end of the project ranking exercise, the
resulting portfolio of projects is displayed on
various charts. These charts enable management
to check for balance and strategic alignment.
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SUMMARY
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The Product Planning Process

• Occurs before an NPD project is formally approved
• Supports the broader business strategy of the
  company
• Addresses these questions
• What product development projects will be
  undertaken?
• What mix of fundamentally new products,
  platforms, and derivative products should be
  pursued?
• How do the various projects relate to each other
  as a portfolio?
• What will be the timing and sequence of the
  projects?

36
Strategic Management Process
Strategic Management ProcessIncludes Four
Activities 1. Review and define the
organizational mission.2. Set long-range
goals and objectives.3. Analyze and formulate
strategies to reach objectives.4. Implement
strategies through projects.
37
Project Screening Process
Projectproposalidea
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Project Priority System
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Succeeding at New Products

• Two ways to succeed at NPD
• Doing projects right
• Doing the right projects
• Doing projects right
• Effective project management, cross-functional
  teams, VOC
• Doing the right projects
• Effective portfolio management
• Best procedure Do the right projects right!

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Four Main Challenges in Portfolio Management

• Resource balancing
• Demands usually exceed supply
• Prioritizing projects against one another
• Many projects look good, especially early on
• Making Go/Kill decisions in absence of solid
  information
• Upfront homework often substandard
• Too many minor projects in the portfolio

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THE END