RESOURCES PRIORITY MATRIX HOW TO

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RESOURCES PRIORITY MATRIX HOW TO

Below, we discuss the steps entailed in an optimized process for portfolio management and how to put the process into practice on an ongoing basis.ДЄn optimized process for portfolio management entails multiple steps (Exhibit 1). This initiative is forecast to result in a 15 percent increase in profits.ДЄn optimized process helps to improve financial performance by facilitating trade-off decisions in resource allocation and resolving conflicts between projects competing for the same resource.

A food and beverage company applied approaches to project selection and redesign to focus its investments on projects with higher profitability.

It allocated the resulting surplus to its development budget, which was cut by only 16 percent, to the remaining priority projects to help ensure their success. A specialty-chemicals company reduced the number of development projects by 40 percent by cutting the 'long tail' of small projects. Creating a better match between investments and business priorities allowed a high-tech company to redirect 20 percent of its development budget to new areas of innovation that have greater growth potential.Д¬ut costs and redirect the savings. Recent cases suggest that companies can increase growth-related spending, cut costs, and improve margins, as well as reduce overall business complexity. The rewards for optimizing portfolio management and resource allocation are significant. By mapping resources to their prioritized projects, these companies identify gaps relating to capacity and capabilities and can develop an action plan for improving resource allocation. Leading organizations are moving beyond this annual exercise to conduct a more regular, objective, rules-based prioritization of their projects, which they augment with a subjective assessment based on strategic goals. Traditionally, product development organizations have conducted portfolio management as an annual or semi-annual process in which they determine the optimal portfolio strategy and match their limited investment resources to the selected projects.

Resources priority matrix