What is Product Portfolio Management?

What is Product Portfolio Management?

A portfolio is the collection of different materials that share something in common. In business, different types of portfolios are used to optimize business processes and to make them more visible and traceable. These portfolios can be exemplified as application portfolios, hardware portfolios, product portfolios etc. Each of them is specifically created to compile different elements in a business. IT Asset Management is the umbrella term for such comprehensive, methodical approaches in the IT sector. Feel free to learn more about IT Asset Management here.

A part of IT Asset Management, Product Portfolio Management is the framework aiming to manage all aspects of a product that a company has invested time, effort, or money. This process accounts for all the products by monitoring their performance data, identifying potential risks and threats around these products, and evaluating the real business value of these products. All steps towards creating a product are thus followed and taken into account when deciding “what’s next”.

Product Portfolio Management is collecting all these products. So, a centralized commanding unit can be created to facilitate the overall domination of a company on their product management processes. Product management is the systematic operation of guiding and managing every step a product goes through during its journey in the market. Producing, updating, selling, marketing, integrating… all these and many more steps are integral parts of a product’s lifecycle. Considering a company may have a lot of products and product management processes, it’s only natural that a need to centralize all the input emerged. This need is answered by Product Portfolio Management.

What are the goals of Product Portfolio Management?

To monitor and manage the products more efficiently. Sharing very similar goals and techniques with IT Asset Management and Application Portfolio Management, Product Portfolio Management also aims to maximise a company’s overall command of managing its products.

1. Visibility: Product Portfolio Management aims visibility towards monitoring products a company is producing. In the IT environment, these products are mostly digital. Monitoring them constantly enables the creation of some kind of mapping for their lifecycles. With a lifecycle journey now present with Product Portfolio Management, decisions taken and projections for the future are more grounded.
2. Long-term value: Through visibility and careful planning, comes long-term value. Product Portfolio Management supports comprehensive, end-to-end management of products. This way, potential business benefits are analysed more properly and the investments for the future can be made while supported by centralized, trustworthy data. This way, long term plans for a product have more opportunities to be realised.
3. Alignment with business goals: Understanding through monitoring a product makes it possible to align their capabilities with business goals at the corporate level. Every business has its agenda for success. Thus, they employ different goals and means. Their products should help them. With Product Portfolio Management, evaluation of such an alignment can be conducted. Read more about Application Strategy Alignment here.
4. Understanding the value and the risks: Visibility functions like a dynamo for the business world. If true visibility can be structured in the IT landscape, identifying the insights into business can be easier. Product Portfolio Management ensures such visibility to further optimize the business processes with insight provided by visibility and traceability.
5. Better budget control: Product Portfolio Management also takes the financial details of a product into consideration. Resources allocated for each step, potential business value and profitability could be important subjects for Product Portfolio Management. If supported with software, understanding and analysing info regarding the cost would facilitate the job of decision-makers by providing insightful data. Product Portfolio Management aims such an accord.

How to Do Product Portfolio Management?

Especially for companies structuring their business methods on product developments, Product Portfolio Management is quite crucial: it’s a must. Even though it’s almost imperative to do so, it may also get rather harder especially considering the portfolio sizes.

So, how to conduct Product Portfolio Management and create visualised data in order to facilitate the management of the business overall?

1. Understand your company’s aims: Businesses differ from each other with their strategies and goals. Identifying those will help employ Product Portfolio Management as company culture, rather than conducting it just to save the day. Think about the company’s business goals and act accordingly for the portfolio management, right from the start.
2. Prioritize processes: Some steps in a product’s journey could be more critical than others. This is only natural. Developing, for example, sets the rhythm for the success of a product. Marketing, similarly, defines the audience that will be focused on for the deals. These steps may differ between businesses and sectors, though. Prioritizing such steps and structuring the portfolio management around them may shed some light on the way.
3. Create accord between strategies and operations: Considering “what is being done” and “how it is being done” are two questions every business should ask constantly. Quite similar to aligning, these interrelationships are important for efficient Product Portfolio Management. Compiling the products and analysing them according to how their segments work with each other is a critical step for Product Portfolio Management.
4. Visualize the portfolio: Having gathered info on every aspect of a product, it’s time to visualize. Roadmaps, graphics, visual evaluations… they all help make critical business decisions regarding products. Software specialized in Product Portfolio Management could help businesses conduct such a robust Product Portfolio Management. Feel free to find out how Application Portfolio Management (APM) software help businesses here.
5. Further criticising the work to make it fit better for needs: Efficient Product Portfolio Management requires to be employed as a company culture as it aims for creating long-term value. So, once all the products are compiled and an inventory is created, it’s time to further criticize and analyse what should be done for the next step.