Catching the Cash Cow
Web technologies support efficient portfolio management
A market-oriented product portfolio secures competitive advantages for a company and is absolutely essential, especially during economically troubled times. The key tool behind modern portfolio management is the so-called portfolio scorecard. When used in conjunction with Enterprise 2.0 technologies, it enables companies to make their data collection and evaluation processes within portfolio management leaner, saving time and cutting costs.
The control of complex product or business segment portfolios with the help of portfolio management has been established in many large corporations in recent years. We also utilize the portfolio method in the analysis phase of many of our projects as a way to achieve quickly transparency with respect to the competitive situation, technical requirements, processes, and other objects of the analysis. In our experience, there are three aspects which are of primary importance when making use of portfolio management.
The first aspect concerns the definition of the decision options. The business strategy determines the decisions which must be taken. For example, support is sought for investment decisions with products and business segments as analysis objects, for organizational decisions with processes as analysis objects, and for implementation decisions with technical requirements as analysis objects.
The second aspect revolves around the definition of the evaluation criteria. Decisions are made on the basis of the positioning of the individual analysis objects within the portfolio. With this in mind, the criteria for the evaluation of the analysis object must be selected in such a way that they are measurable while at the same time the evaluation and the subsequent decision clearly rise from the same context.
The third aspect, finally, is related to the definition of the process. During the portfolio management process, the portfolio is defined and decisions are made regarding the inclusion of new portfolio elements and the exclusion of current portfolio elements. The process should be designed so that any decision based on the portfolio evaluation takes effect and is thus implemented in the company.
Hardly surprising is our experience that it is the last aspect, the implementation process, which confronts companies with the greatest challenges. But our experience also shows that this is mainly due to the lack of transparency in the agreement on and selection of evaluation criteria taken as the basis for the evaluation of the individual portfolio elements.
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