Every manufacturing company faces challenges when it comes to properly allocating resources for product development and launch so that each product ultimately contributes to the corporate bottom line. These challenges are compounded when the company boasts an entire family of products, where the fortunes of one product may have a critical impact on other products in the line.
A company’s products are known, collectively, as the product portfolio. Through better management of that portfolio, manufacturers can properly budget for the success of each individual product, while also making certain that the products work well in tandem.
Managing a Product Portfolio: An Overview
To put it another way, product portfolio management is all about assessing how each product and service that the company offers is positioned for success, not just in a vacuum but in the context of the entire product offering.
Through effective oversight of the portfolio, product managers can identify opportunities for more efficient resource allocation, all with the ultimate goal of facilitating greater product ROI and business growth.
Management of your product’s portfolio is based on the notion that each product deserves its own unique strategy and financial stake, depending on the market trajectory. For example, imagine an automotive company. In an environment where fuel costs are extremely high, developing and marketing an electric car may come with very different priorities than developing and marketing a gas guzzler.
At the same time, portfolio management acknowledges that the success or failure of one product may significantly impact other products in the portfolio. For example, if one product is delayed, it could adversely impact the ability to cross-promote or upsell other products in the company’s portfolio.
Considering Product Portfolio Analysis
You may have heard the phrase product portfolio analysis and wonder how this relates to product portfolio management. The short answer: Portfolio analysis is one component of the portfolio management process.
Essentially, this analysis is all about assessing products within the portfolio throughout their lifecycle. The ultimate goal is to determine which products are helping the company attain its short-term and long-term goals (and, of course, which products are falling short).
Product portfolio analysis usually results in a model or matrix to categorize the different products. To produce this model or matrix, product managers usually do the following:
- They identify the units of analysis.
- They denote the variables to be measured.
- They construct a matrix and position products in the appropriate place.
- They brainstorm where new products might fit into the matrix.
- They evaluate the distance between where they are and where they see opportunity.
Though such analysis is an important part of portfolio management, it represents just one aspect of the broader process.
Weighing the Pros and Cons of Managing the Product Portfolio
Ultimately, there are several benefits that manufacturing companies achieve when they consistently engage in the management of the portfolio. Some of these benefits include:
- Shepherding new and innovative products to the market more expediently
- Improving the company’s ability to be nimble, and to respond to changes in the market
- Reducing the time and expense required to bring a new product to market
- Enhancing the company’s competitive positioning
- Maximizing the investment made in each product within the portfolio
- Clarifying which are the strong products and which are the weak products within the portfolio
While these benefits are all notable, it should also be acknowledged that portfolio management is inherently challenging. One of the biggest challenges is inertia, and a resistance to change. Simply put, manufacturers can be hesitant to make significant changes to their portfolio, especially if that means eliminating a pet product that is no longer performing the way it should, that has fallen out of step with the market, or that has started guzzling more and more resources without a comparable boost to ROI.
Another challenge is that different stakeholders within the organization will have dissimilar goals when it comes to managing the product portfolio. For example, product managers may be zealous about streamlining day-to-day operations, while executives are more concerned with the bottom line. Bringing these goals into alignment is a difficult yet important step in the management process, and it requires robust software solutions.
This is why Gocious product roadmap management software solution that was designed specifically for manufacturers who need to juggle large portfolios of products.
There are a number of factors that make Gocious the PRM software of choice among manufacturers:
- It tracks the deployment and evolution of modules and their application throughout the product lifecycle.
- It supports the concept of platforming by providing a central place to track modules and allowing for the reuse of modules in various products.
- Its rich visualizations provide business value, benefits, and scope on each milestone release.
- Persona roadmaps create a systemic view of the benefits customer profiles receive over time.