Project Portfolio Management in …

1 Project Portfolio Management in Telecommunications R&DTaru Introducion Managing R&D Projects Using Roadmaps Strategy in R&D Problems and their root causes in R&D Project Portfolio Management Decisions on Projects & Portfolio SummaryIntroduction Intense competition and constant changes in the business environment -> high R&D expenses Need for true innovations Need to manage the money right Basic Project Management not enough -> need methods for allocating the money to right projects Different R&DResearch (long term) Technology development (medium term)Product development (short term) Clarity and measurability of goalsStrictness of methodsOperational and strategic freedomNumber of projectsSize of projectsRadical nature of projectsRisk levelTechnology maturityEnd productLinks and InterdependenciesResearchTechnologyProdu ctR 1R 2R 3R 5R 6R 4T 1T 2T 3T 4P 2P 3P 5P 4 TimeTechnology maturityProjects at a given momentEnd ProductP 1 End ProductEnd ProductPath to a business goalProjects in R&D Goals of multiple types a new technology, a verified technology, a new process, improvement of existing technology or product.

2 Or the actual end product delivered to the external customer Limited resourcesStage 1 Stage 2 Stage 3 Stage 4 Stage 5 Gate 1 Gate 2 Gate 3 Gate 4 Gate 5 End productPreliminary InvestigationIdeationDetailed InvestigationDevelopmentTesting & ValidationFull Production & Market LaunchStage-gate model for managing new product development projects (Cooper, 2001)A Toolfor biggerpicture: Product RoadmapT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsTIMEC ustomer Segment YG3G2G1 Product AG3G2G1 Product BG3G2G1 Product CThe Actual ComplexityTIMEC ustomer SegmentYG3G2G1 Product AG3G2G1 Product BG3G2G1 Product CTIMEC ustomer SegmentYG3G2G1 Product AG3G2G1 Product BG3G2G1 Product CT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology

3 XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsT 1T 2T 3T 5 TIMET 4 TECHNOLOGY MATURITYD efinitionCharacteristicsTechnology XDefinitionCharacteristicsDefinitionChar acteristicsDefinitionCharacteristicsDefi nitionCharacteristicsDifferent Levelsof StrategyR&D Technology StrategyR&D Project StrategyR&D Portfolio StrategyOrganisational identity (mission, values.)

4 Corporate Strategy ( business areas, financial structure,..) business StrategyPortfolio StrategyProject StrategyBalancingOptimizing resourcesInitiating and killing projectsOutsourcing decisionsBudget and resource outliningMission and visionProject goal settingTime, costs, scopePoorManagement and its InfluenceLack of resources for new productsNo Portfolio manage-mentprocessNo new product processToo many small low impact projectsPoor Project prioritisation; failure to kill projectsPoor data on projectsPoor job done on projectsToo many projects for limited resourcesLow impact on sales & profitPoor cycle timesHigh failure ratesDifferent Maturity Levels of Project Management CultureControl ofindividual projectsBusiness managementthrough projectsDiscrete multi- Project controlIntegrated multi- Project controlCoordinated controlof individual projectsAd-hocRepeatable& definedAction &integrationControl and SupervisionSynchronisationandoverviewMan agement andoptimisationMaturity of theorganisationManagement ambitionWhy Portfolio Management ?

5 Researchers and Project managers are more business -oriented Use of technology assessment has improved the understanding of the impact of external change to the company and new core research projects have resulted from this. Increased business involvement -> more Project ideas Ability to measure the successProcess Viewof Portfolio Management Portfolio analysisR&D strategy-core technology areas-make or buy decisionsProjectDatabaseOpportunityScree ningIndividualProjectEvaluationPortfolio Modelling & BalancingPortfolioDecisionProject DevelopmentMilestoneEvaluationSuccessful Completion of ProjectObjectives, Methodologies, ResourcesNew opportunity screeningIdeation(systematic ornon-systematic)Further development of the best ideas Idea screening& evaluationBU strategyOther (R&D) unitsDifficulty of Measurement100 %80 %60 %40 %20 %0 %Line extensions of existing products with known technologies and to world but not to the development and process changes are required.

6 Although individually they are doable, integration may not be possible. Difficult development and/or process issues need to be solved but several potential solutions can be identified. Major breakthrough is required, probably yielding key patents due to unobviousness. Balancing the Diverse GoalsReturnRisk12354 Tech Competitive PosTechnological Maturity12354 MarketsTechnologies12354 Annual BudgetTime to Completion35214 Decisions from the Perspectiveof a ProjectOn-going projectsProject initiativesKill/FreezePossible decisions regarding a Project / initiativeContinue with modifications* Project portfolioContinue as plannedAbandon/FreezeStart with modifications*Start* modifications mean changes to the original Project plan regarding resources (money, workers), length or scope Communicate the "gratitude" of the Management to the Project team Continue work as usual Communicate & discuss the situation with the Project team & stakeholders Finish and file Project documentation Reallocate and remotivatepeople Final decision on the team members Communicate the Project plan and the strategic goals of the Project Make sure everyone knows his task Communicate the decision to the ideator Make sure ideatorhas something to do File the documents related to the ideaActions Communicate & discuss the proposed changes with Project team & stakeholders Make the changes to the plan Make sure everyone knows his new tasks Design and make the changes to the plan Discuss the changes with related people Continue with the box belowChange from

7 Portfolio Perspective1) The original situation, N=233) Project C adjusted, Project E accepted with a revised plan, Project F abandoned, 1 person hired, N= 24 2) Proposals made for 2 new projects E & F, N=32383732 1 ACDBEM arketsMarketsThe number inside each bubble presents the resource letters indicate the name of the number of resourcesTechnologies5837 ABDCT echnologies5837 ABDC4E5 FMarketsTechnologiesPPM in R&DR&D StrategyResearchTechnology developmentProduct developmentPrioritiesand desired balanceObjectives, resources, constraints, methodologiesProject Portfolio ManagementResearchTechnology developmentProduct developmentPPM Areas in DetailGoals based on roadmapsBottom-up strategy through business -unit interactionGoalsFormal systems in use in large, successful firms?

8 ImplementationControlled decisions on each gateLooser, concentrates on the beginningDecision makingExperts as resources in decision makingTop Management as decision makersExperts and researchers as decision makersTop Management as vision communicatorsRolesIdeation secondary, roadmap governsIdeation free and with an emphasized meaningIdeationTools decisive and with numeric valuesTools as thinking support, category basedToolsSelection based on clear criteriaExpert judgment, chaotic choosingImportance of creativitySelection & evaluationQuite strict, larger reportsFree, low level of bureaucracyMethodProduct DevelopmentTechnology DevelopmentResearchImportance of market and segment understandingSummary Project Portfolio Management is about Getting the big picture Allocating money to right efforts Ensuring the possibility of success in projects Different practices in different phases Interfaces between projects and phase important to understand