Product portfolio management is correctly understanding demand and allocating resources to achieve optimal product offerings. But the equation for effective product portfolio management is simple, isn”t it? Focus on delivering the right products to the right place at the right time.
Well, yes and no. Today”s markets fluctuate with complexities. Savvy customers want better, faster and cheaper, resulting in a marketplace that is competition crazy.
Respondents to a recent Accenture survey acknowledged the role of reduced profit windows, decreasing product life cycles and virtually constant payback periods as drivers for change. The survey report postulates that by embracing innovation and research, companies can make their portfolios more effective.
Although 76 per cent of survey respondents agreed that it was important to focus on portfolio optimisation, only 43 per cent believed they were performing well when measured against this indicator. Gaps also appeared in executives” understanding of market insight.
The report suggests the most efficient way to achieve an optimised product portfolio is to adopt a holistic approach, encompassing business processes such as new product development and accurate market segmentation. The report goes on to say that bridging the performance gaps is easy if you use the right set of tools and methodologies. Accenture has developed a methodology and identifies the capabilities for successful product portfolio management as:
Adopt a holistic view, placing product portfolio management at the heart of the strategic planning process; ensure a structured and integrated way of working; prioritise and segment customers and their requirements; increase the level of internal innovation to gain more and better ideas as well as using partners for idea generation and the development of products; optimise product portfolios based on value, strategic fit and balance; make efficient product decisions through a well-formulated product governance model; and ensure technology supports product portfolio management processes.