You helped me so much with CAPM, I'm hoping you can help me identify a
few additional business metrics. Suddenly, I find myself hungry for
information -- quality information that will help me and my team do a
better job of determining our product and solution portfolios within a
strategic framework.
We learned though CAPM how to evaluate projects in terms of their
ability to deliver returns at appropriate levels. What other kinds of
numbers/financial/business analysis can be used to determine a
business case for a particular solution, and for weighing the relative
attractiveness of various complex and inter-dependent oppoturtunities
within a complete product/solution portfolio?
I'm looking for 3 categories of analysis:
1) What core questions must be answered in order to make a sound
business case? And, typically where would someone find this info?
2) What methodologies/concepts will allow me to track mutual
dependencies of the portfolio (i.e. a product that's dependent upon
another foundational technology (internal or external))
3) And, some way to outline risk and be able to identify appropriate
risk mitigation (what ifs).
Lastly, have you seen this level of detail ever provided in an overall
ganted roadmap? I'm having trouble identifying any examples with this
level of detail.
Any links would be greatly appreciated, but I'm also really interested
in simply sucking your brain for your ideas on this and how you would
go about rising to these challenges. I really value your opinion and
expertise.
Thank you!
Margi |
Request for Question Clarification by
omnivorous-ga
on
05 May 2005 13:19 PDT
Margi --
I'm going to post some comments and hope that you can identify a
product or service example that you'd like to consider. It doesn't
have to be your own product or service -- in fact sometime in the next
48 hours I'll answer a very precise question in the link below. (I've
been around the PC business so long that I know Mike Markkula -- so
that industry is always a good stalking horse.)
http://answers.google.com/answers/threadview?id=517935
1. Information for a good business case: certainly you'll be looking
at investments and returns -- but it's also a good idea to add a
strategic analysis. The two most-popular over the the past 30 years
have been Porter's 5 Forces and the McKinsey business segmentation
models. I prefer the former, finding them more complete -- and very
competitively focused.
Here's a good Porter vs. McKinsey GA question:
Google Answers
"Write a Managements Strategic Recommendation" (Omnivorous-GA, Nov. 28, 2003)
http://answers.google.com/answers/threadview?id=280459
2. The modeling in #2 is difficult to answer. It might be a leading
technology (as you've noted); it might be a diffusion rate of how
markets learn about products (see Technology Adoption Life Cycle and
books like "Crossing the Chasm"). Understanding a broad range of
techniques can be useful, so a book like Peter FitzRoy's "Analytical
Methods for Marketing Management" can be excellent reminders of all of
the techniques.
One note for you here: I'm a big advocate of segmentation and segment
analysis. Whatever you prepare, I'd recommend two things:
1. preparing a forecast and highs/lows
2. being prepared to identify segments of the business: that gives
you leverage to go after areas where you can boost growth (and
disinvest in the "dogs")
3. understand how different inputs (advertising, shelf presence,
pricing) change your outcomes on a detailed basis
3. Porter's 5 Forces concepts helps identify specific business risks.
In whatever you're doing, you'll be modeling your costs of money and
other CAPM issues on your competition. If you can't find a public
company as a model, you might choose a beta + capital cost based on
maturity of the market. If it's soap, it's going to be a low beta; if
it's nanotechnology, assume a high beta because of the early stage of
the industry.
In my experience project GANTT's have always been separated from the
business case. However, we have identified risk "inflections" in the
business case. A good example: introduction of Zenith Data Systems
Minisport portable computer during the 1980s involved 5 new component
designs (chipset, screen, 2.5" diskette, 3.5" hard drive, and
firmware), causing us to delay any revenues forecast for it by several
months after the target delivery time.
That said, there are some very sophisticated project management
techniques of which I'm not aware. You might wish to ask that as a
separate question on up-to-date techniques for identifying & managing
risk in GANTT and CPM management.
I don't know how much of the above serves as a Clarification Request
and how much as Answer -- but I'll let you determine that!
Best regards,
Omnivorous-GA
|
Clarification of Question by
margi-ga
on
05 May 2005 15:27 PDT
Thank you for the quick response! :-) I'm getting ready to leave the
office, so I will read this in more depth tonight.
I know the roadmap is odd to have in this context, however, we've
specifically been asked to plot roadmaps based on these various risks
and dependencies, so... I want to do that, but also map those roadmaps
to business cases that match that particular scenario. In other
words, I might have a scenario that's based on having a particular
standard published in a certain timeframe and wanting to be
compliant... and at the same time, I may want another roadmap that
would map to the standard not passing, or passing with a higher level
of requirement than we had anticipated. Each would have a slightly
different case that goes with it (costs would differ, timing would
differ, etc...)
In terms of product... we're working with a portfolio of a variety of
hardware devices, applications and software solutions that are custom
integrated.
No need to answer in any more depth at this time. I'll read it later
and provide more info.
Thanks again.
|
Request for Question Clarification by
omnivorous-ga
on
05 May 2005 16:29 PDT
Margi --
It sounds as if the emphasis in the business planning is in risk
management. There's so much in experience and the literature that
this is a broad area:
* Total Quality Management (TQM) literature covers it extensively.
It argues that Japanese manufacturers minimize their exposure here but
making consistent, scheduled, small changes. Sony's Walkman series is
often used as an example, with "new" features being added every 9
months -- but the product not being changed dramatically over its
life. That works fine until an iPod appears . . .
* Everything comes down to your ability to manage the risk process
and find new ways to address it. "Option" theory, developed from the
CAPM, is often used to justify a development alternative at a startup
or and outside development firm. If they deliver needed code before
your team does, you exercise the "option" -- otherwise you walk away.
* Even game theory can come into play. Example: standards aren't
set? They're considered vague by the engineers (as is most-often the
case)? Proceed anyway. I was one of the first customers for the
Linksys 802.11g wireless router, purchasing it even before 802.11g
standards were finalized. Linksys told potential customers "we'll
update the firmware" but the company beat competitors to the market so
badly that it became a defacto standard.
But in the end, it's as clever as you and your team can be. Some
engineering teams I've worked with would have been abhorred by the
Linksys strategy -- they'd prefer being right about details as
significant as "how many angels can dance on the head of a pin" rather
than winning in the market.
Best regards,
Omnivorous-GA
|
Request for Question Clarification by
omnivorous-ga
on
09 May 2005 17:19 PDT
Margi --
This is just an FYI: I'll be traveling starting May 11 and available
on periodically until May 24. Obviously my ability to respond will be
limited.
Best regards,
Omnivorous-GA
|
Clarification of Question by
margi-ga
on
09 May 2005 18:31 PDT
Thank you for the update. A family member is ill and I haven't had a
chance to really read your response and digest it. I just now happened
to be online. Please feel free to post it as an asnwer so that you can
accrue the $$ and if I don't understand, I'll post a separate question
:-) Have a safe and fruitful trip. Thanks for the follow up :-) -
Margi
|
