Leading multinational companies in many sectors have already started using Project Portfolio Management to drive innovation into their business. Even in difficult economic times, the major force behind increasing profitability, stock value, and gaining competitive advantage is product and service innovation.
With the correct portfolio mix, a business is able to meet its own goals and objectives as well as those of the customers. It also enables a business to adjust to the various changes taking place in a dynamic business environment, so it can respond appropriately to new and innovative industry trends.
With the help of solutions offered by Project and Portfolio Management (PPM), a business can become equipped to incorporate and lead innovation driven practices across the entire enterprise and also take confident decisions.
Value of Innovation – Doing the Right Things
Several organizations today are making efforts to enhance their returns on investment made in innovation by emphasizing solely on the process of improving product manufacturing.
Most of these companies have invested in various kinds of IT processes (such as PLM and ERP) or development of niche products, and there is a major focus on enhancing the efficiency of processes, minimizing mistakes, and reaching the market quickly.
To gain competitive advantage and accomplish business objectives, companies must understand that innovation is not only about executing processes in the right way, but also about doing the right things. This means that projects need to be delivered efficiently, and more importantly, the organization needs to invest in putting together the right mix of resources to deliver stable and long-term financial results.
Getting Adequate Return on Investment
It has been observed that even after making huge investments in innovative business practices, businesses don’t seem to get satisfactory returns. This is mainly due to inadequate technological support for the innovative processes undertaken by the business, because of which some of the crucial issues such as strategic forecasting and planning, management of resources, and product portfolio management are left unaddressed.
A direct result of this situation is that organizations do not get an overall detailed view of the innovation portfolio. This results in huge overheads with regards to management reporting for the organization, which has to undertake manual collection and consolidation of data. Key decisions regarding innovation investment opportunities are often due to inaccurate or incomplete records and data.