The terms ‘product’, ‘portfolio’ and ‘product portfolio’ are overloaded. Move from one industry to the next, and they mean very different things.
So, let’s start by defining what we mean by a product. Some products are physical or tangible whilst others are conceptual or intangible. For example, a new drone with an advanced rotor blade is tangible, whereas a new financial investment product based on a derivative is intangible.
For the purpose of this article, a product can be tangible or intangible, but it must follow a typical product lifecycle through the stages of Idea, Concept, Build, Scale, Sustain to Retire over a time horizon. So, a project is not a product because a project will end when the scope of work or change is implemented. By contrast, a product may continue to be used, supported or enhanced beyond the life of a project.
Products are created by organizations for 3 key reasons:
Depending on the size and complexity of an organization, the number of products can range from single digits to thousands.
When it comes to large numbers, it’s common to form a product portfolio. A product portfolio is simply a collection of products, so don’t confuse this type of roadmap with a product roadmap. The products in a portfolio are often related and therefore categorized methodically, but they can also be completely unrelated. A large organization might have multiple product portfolios.
Typically, product portfolios are dynamic: there are products at different stages of development across the product lifecycle; new product ideas that are added; and some products that fail and are subsequently removed from the portfolio. To realise value for the organization, a product portfolio manager cannot afford to waste valuable resources investing in the wrong products. Having an active product portfolio roadmap will help ensure the organization is focussed on solving the right challenges with the right products at the right time.
Below is an example of a product portfolio for an example organization we have dubbed RedYabber, which is a toy manufacturing company undergoing significant digital transformation. In this example, the portfolio consists of products that cover automation, remote operations, mobility and so on.
A product portfolio roadmap is a high-level visual representation of what products the organization should invest in developing over a particular time horizon, and, crucially, why.
It is important to keep in mind that a product portfolio is dynamic because the organization is continually changing. Therefore, the roadmap must be regularly assessed and adapted, i.e. active.
Many organizations have been challenged by the need to transform through innovation. This is driven by digital disruption from 3 key sources:
Organizations are investing in developing innovative products that can transform the company, gain market share, or just meet their long-term strategic goals. This kind of investment requires experimenting, taking risks and learning to fail fast – which means investing in a portfolio of products, not just one.
When an organization has such a portfolio, they must plan which products to invest in and then manage their progression along the product lifecycle over a particular time horizon. Having a product portfolio roadmap helps an organization gain an overview of all the products, thus allowing them to prioritize and plan investment of their resources.
Without a roadmap, organizations waste valuable resources investing in the wrong products and in the wrong sequence.
Having a product portfolio roadmap is a significant artefact to support communication and consensus-building in the organization, but it is from the process of developing the roadmap that the organization gains the most value.
The process or action of developing the roadmap prompts and invokes many important questions.
Answering these questions is essential to a good product portfolio roadmap. The visual roadmap is only one small output of the process; the insights and decisions made are the true gems of having a roadmap.
Step 1: Follow a simple and consistent method that aligns your portfolio of products to your organization’s capability gaps, objectives and challenges, i.e. you need to understand the ‘why’, analyze the ‘what’ and then you can visualize the ‘how’.
Step 2: Prioritize your products to ensure that you are focused on the high value and lower risk/effort products first. Be prepared to pause or drop the products which are no longer of a high value or carry a high risk/effort.
Step 3: Visualize your product portfolio to support your communication and consensus-building activities.
Step 4: Lastly, remember that your product portfolio is dynamic. Repeat the above to incorporate new ideas, feedback and lessons learnt (in particular any learnings from product testing against value and risks).
Jibility is a free roadmapping tool that enables you to simply and quickly build your roadmap as outlined in this article. The app guides you through six steps, allowing you to identify and define capability gaps, objectives and challenges of your product portfolio, prioritize products based on value/risk, and create a visual roadmap that can be published as a one-page document.
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