1. Field of the Invention
The present invention relates generally to methods and systems for creating and managing product and project portfolios. The present invention also relates to methods and systems for creating, evaluating, ranking viewing potential returns of proposed products and projects. The present invention further relates to methods and systems for enabling decision makers to view the contributions proposed products would make over their lifetime and the cash flow that would result from investment and returns. The present invention also relates to methods and systems to enable decision makers to view the consumption of key resources. Also, the present invention relates to methods and systems for developing project or product scenarios based on selected assumptions.
2. Description of the Related Art
Product development today poses unprecedented challenges. To stand out and succeed in competitive and crowded marketplaces, products must be continuously innovative and fresh. As short-lived market opportunities present themselves, product development efforts that once required years now must be executed in a matter of months.
Companies must continuously test new ideas. Scarce investment funds must be allocated to the most promising ideas and opportunities. Projects must be tracked to ensure that the funds committed to those projects are not better employed elsewhere. Product development departments are typically many times overcommitted. Product managers and the executive management team often have no way of determination whether the project under development is well aligned with corporate objectives. Indeed, there currently exists no unified and easy way of determining where the company's finite resources are committed. Moreover, today's executive teams have no way of effectively balancing the risks already extant in the company's investment portfolio with the risks inherent in proposed or existing product development efforts or proposals. Management has no way of seeing an objective view of aggregate resource load, nor do they have the systems to make staffing and resource decisions other than through gut instinct or the opinion of the person requesting such resources. This provides no basis for reallocation decisions or staffing decisions that must therefore flow up the organization as a “take it or leave it” lump. What are needed, therefore, are methods that would provide an analyst or executive the opportunity to balance the profit impact of making changes to the resource pool with postponing or cancelling profitable projects. What are also needed are methods of enabling such analysts to see which resources that may be undercommitted as well as those that may overcommitted, to yield opportunities for profitable rescheduling and to manage the risks in those bottlenecks.
From the foregoing, it may be appreciated that a new strategic planning tool is needed that would assist and provide a unified framework for decision makers in the strategic planning process. Such a tool should lower the cost of the planning cycle, result in a faster time to market and lower the risk of new investment proposals.
To lower the cost of the planning cycle, such a tool should automate the collection of assumptions on which an investment proposal is based, including the collection of financial, resource and marketing information. Other desirable features of such a tool include the ability to rank proposals across many investment criteria and the ability to select those proposals that best for the company's existing portfolio. Also desirable is the ability to create scenarios that include different mixes of investment projects, products and funding and the ability to see the resultant returns of such mixes, preferably summarized across financial criteria and non-financial criteria, such as manpower, risk and marketing criteria, for example. To achieve a faster time to market, product managers and development executives should have at their disposal a tool that enables them to judiciously allocate the limited resources available to them to the most profitable projects, and to enable them to allocate the right resources to the right opportunities. To lower the risks of new projects, the inherent risks of proposed investment and new projects should be calculated as a measure of how accurate the assumptions need to be and till produce a positive return. Preferably, such a tool should present investment proposals in a uniform and balanced manner, both in terms of short term and long-term investments, thereby lowering the risk of being overtaken by competitors.