I have heard some great stories over the last few years about how companies have leveraged top-down resource planning and “what if” portfolio optimization techniques to quickly and more confidently make decisions that deliver better product, portfolio and shareholder value. In the past, companies comfortably looked at their portfolio decisions once or twice a year. More and more companies are feeling the need to analyze their product and portfolio investment decisions more frequently. Here are three instances where having processes for resource planning and techniques for running portfolio “what if” optimization scenarios in place have benefited companies.
At one company the EVP shared the details of an all-too-frequent phone call from one of his sales executives who had just met with a key client. The sales executive was calling armed with great news about the potential revenue this client would provide if they would just agree to add this new feature to one of their product lines as soon as possible. In the past, the EVP said that this would have kicked off a long and emotional debate with sales on one side of the argument clamoring for the new feature ASAP and executive management trying to determine the impact on the rest of their product roadmap and revenue stream to add the new feature. However, now that his company had deployed new processes for top-down resource planning along product portfolio scenario building and “what if” techniques, the EVP said they were able to quickly setup and run a couple different scenarios showing the opportunity costs for adding the new product feature. Once they were all able to see the ramifications collectively, they quickly came to a logical decision about what was best for the business as a whole without a prolonged debate and without this EVP having to be the bad guy. Bottom line: The result was a quicker decision with better business results.
Another business unit executive shared that their lack of visibility into the engineering resource capacities along with the overall portfolio of projects demands over time meant they were constantly reacting with resource decisions that were less than optimal financially and ultimately, still didn’t eliminate products getting to market late. Now, by leveraging a top-down resource planning process where department heads share in the assignment of their teams resources against project demands along with automated scenario building and “what if” capabilities to better predict product development and engineering resource constraints in an effort to minimize labor costs and minimize time to market, this company is making better investment decisions and delivering more products on time and under budget.
Yet another company had an explosion and fire that made an entire manufacturing facility inoperable. They needed to ramp up a new facility as quickly as possible. The challenge was deciding what people/resources to dedicate to this emergency project and what existing projects to potentially put on-hold. There were many things to consider and the clock was ticking. Because they had already implemented a process for top-down resource planning and were familiar with techniques for “what if” portfolio optimization, they were able to quickly setup and run different out-come based scenarios to come up with a plan they were confident would have the new plant up and running as quickly as possible with minimum impact to the rest of their business. Hard to imagine how difficult this would have been without the process and techniques already in place.
These are only three examples of how having resource planning processes and portfolio “what if” optimization techniques in place have helped companies make quicker decisions for better business results. Other usage scenarios can include project prioritization, portfolio optimization and picking projects for next year’s annual operating plan as well as long range planning/roadmapping decisions.