Managing your biggest black hole in product development: Resource Management

Topics: Portfolio Management | Resource Management

A common theme we hear from our clients:I don’t know if we’re working on the right Product Development (PD) projects, and I keep hearing that projects are late because we don’t have enough resources. The solution to every problem seems to be ‘Give me more people,’ but I’m not going to throw more resources into PD if we can’t even manage the resources we already have.”

Does this sound familiar? This is probably the most common theme we hear from our clients.  We find that some companies lack clear innovation and product strategies, a portfolio management system and processes to address these issues.  In addition, some companies may have a portfolio management and resource allocation software system in place, but it’s rarely used or relied upon. Software solutions range from a simple spreadsheet to the best enterprise solution that money can buy.   But if the solution doesn’t clearly identify the most valuable projects, kill inappropriate projects, and optimize resources without imposing an excessive administrative burden, it’s time to look for a new solution.

The Solution

Technology alone will not solve your portfolio management and resource allocation issues. Here’s what you need:  Firstly, a clear PD strategy and unwavering leadership and participation from executive management.  Secondly, a portfolio management system for evaluating potential projects against the PD strategy and projects against each other. Thirdly, a software solution for allocating and optimizing resources across your most valuable projects.  Armed with this robust three-step approach, your company can begin answer the following questions:

  • Is the project aligned with our strategy?
  • What are my most valuable projects?
  • What happens if we do project A, versus project B or C? How will this affect our resource pool?  Do we have the resources to do these different projects?
  • Based on my current resources, how many projects can I expect to deliver?
  • If I add this new urgent project, how will this affect my other projects that are currently in development?
  • What resources in the organization are slowing the project down? (including supporting resources, like regulatory, quality, production etc.)
  • Are any of our resources being underutilized or are we maxing out some of our other resources
  • What is the financial status of my portfolio?

It is imperative to have a software tool that supports your portfolio management system.  A good tool can reduce the administrative burden, and ensure consistency and objectivity. It also assists in preventing projects and tasks from falling through the cracks, and it provides the transparency needed by executives to ensure that the most valuable projects are prioritized and that PD resources are optimized.

A Brief Case Study

We recently met with a couple of executives from a Fortune 500 company.  They indicated that they had a very sophisticated customized home-grown portfolio management software and resource allocation system, but no one was using it. Projects were not being evaluated against each other based on strategic criteria. Most projects were approved, and driven through the pipeline and consequently translated into a tunnel vs. a funnel effect.   The resource allocation software was not utilized since it was viewed as too time-consuming in logging man-hours.   Team satisfaction was at an all-time low since they were spread too thin across multiple projects.  Sounds like a basic nightmare.

How could this happen?

When the portfolio management and resource allocation software tool was chosen the company decided upon a home-grown system since it was the most cost competitive versus using an existing software solution.   Unfortunately, this led to the development of an overly complicated software solution, and very few people viewed this as providing any real time savings.

The product development team also lacked a strategy that drove the portfolio management process, so consequently it was very difficult to determine what the ‘right projects’ were to work on.  There was also a lack of senior management oversight.  Senior management failed to see the value of the portfolio management system, and they also disengaged from the process.

How can you avoid this pitfall?

Ensure that you have a  product strategy and a workable product development and portfolio management process that your team agrees upon.  Buy-in from the team is a key component; it may sound trite but it is imperative.  The most important component is senior management support.  If you don’t have this, it just won’t work.  Employees are quick learners, and they know what senior management values.

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For more information, contact:

Mary Drotar, Partner

Strategy 2 Market, Inc.


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