Product portfolio management is an essential element of a successful business. Product portfolios provide cash flow, protect the existing business, explore new markets and innovate existing products. Understanding how to create a successful product portfolio is key to developing a sustainable and profitable business model.
Product Portfolio Basics
According to the Project Management Institute, product and portfolio management is “the centralized management of the processes, methods, and technologies used by a project team to analyze, evaluate, and execute change for an organization’s products or services.” In layman’s terms, product portfolio management involves assessing the various products and services offered by a company and determining how to best utilize resources to support these products and services.
Product portfolios can help businesses to identify and capitalize on emerging market trends, anticipate customer needs and wants, and generate more revenue from existing products and services. When used properly, product portfolio management is a powerful tool for businesses of all sizes.
Benefits of Product Portfolio Management
Product portfolio management helps companies refine, target, and focus their products, services, and resources to meet their business objectives. A well-managed product portfolio will help a business:
• Develop new products that better meet customer needs
• Increase customer engagement and satisfaction
• Identify new opportunities for growth
• Move quickly to market new products and services
• Maximize resources and utilize existing technology
• Make better decisions based on data
• Reduce overhead costs
• Gain competitive advantage
Components of Product Portfolio Management
Product portfolio management is a process that combines three components – process, people, and technology – to achieve organization-wide effectiveness.
Process
The product portfolio management process involves a series of steps, from strategy and planning to execution and monitoring. The goal is to identify the most viable product opportunities in order to boost profitability and increase market share.
• Strategy and Planning: Tasks in this stage include defining the organization’s mission, forming a common vision, and mapping out a plan for success.
• Research and Development: Research and development can help to understand customer needs and pain points, ensure the product meets industry standards and regulations, and measure market demand for the product.
• Product Launch: The product launch phase involves testing the product, conducting market analysis, and launching a marketing strategy.
• Product Management: The product management phase involves developing and delivering the product, monitoring customer feedback, and regularly evaluating performance.
People
The people component of product portfolio management involves understanding the roles and responsibilities of individuals within the organization. The product manager is the key player in this process, as they are responsible for working with the marketing and engineering teams to set strategic goals and create and manage activities related to product development.
Technology
The technology component of product portfolio management focuses on utilizing the right tools to maximize efficiency and drive results. Technology can be used to simplify the entire process, from product strategy and development to market analysis and measurements.
Tools and software such as market analysis software, project management software, product lifecycle management software, and customer relationship management software can help to streamline and optimize product portfolios.
Best Practices for Success
The keys to successful product portfolio management include determining the right strategy for the organization, understanding customer needs and wants, utilizing the right people and technology, and setting clear goals and expectations. Here are some best practices for creating a successful product portfolio:
• Analyze the industry: Research competitor products, understand trends, and identify gaps in your portfolio to gain insight into the needs of potential customers.
• Define goals and objectives: Establish specific goals and objectives to guide product decision-making and ensure alignment across all departments.
• Establish a timeline: Establish timelines for product development, launch, and maintenance to ensure product goals can be met.
• Monitor performance: Monitor the performance of products to gauge success and address any areas of concern.
• Utilize technology: Utilize the right technology to reduce manual efforts and streamline activities such as market research, product launch, and customer feedback.
Product portfolio management is an essential element of a successful business, as it helps businesses to identify new market trends, anticipate customer needs and wants, and generate revenue from existing products and services. Understanding the components and best practices of product portfolio management is key to developing a sustainable and profitable business model.
By analyzing the industry, setting clear goals and objectives, utilizing the right people and technology, and monitoring performance, businesses can create a successful product portfolio and maximize the potential of their products and services.
