The evolution of any company requires a value proposition adapted to its customers, which must evolve on a regular basis. Depending on your corporate strategy and objectives, your projects can be new products or services that are more or less disruptive to your existing offering.
The most important thing in developing your offering is to choose the right project and implement it at the right time. To ensure maximum success, you need to implement strategic management of your innovation projects.
Prioritization is essential. It ensures that you don't spend time and money on projects that don't ultimately meet market demand, and for which you don't necessarily have what it takes to succeed.
Prioritization will help you to define a framework so that you don't lose your way and turn to projects that may be more tedious, more costly and less profitable.
In a previous article, we discussed the difficulty of coming up with innovative ideas and how to involve your collaborators in this ideation phase. But once you're past the idea generation phase, how do you know which project(s) to prioritize?
Here are the 5 key themes to establish when prioritizing your project portfolio.
Defining project objectives
When an idea emerges from your ideation process, you need to organize the main stages in its implementation so that it can become a "winning project", aligned with your strategic ambitions. To do this, you can use the 5 why's / 2 how's method.
This method involves the use of six simple questions that will enable you to frame the project and define it roughly, but clearly.
What: what is the project's value proposition? What are the differentiating factors?
Who: who are the prospects, customers and users? Who are the members of your project team?
Where: where will the project take place?
When? What is the project launch and completion date? How long will the project take to complete?
How? What human and technical resources will you need to carry out the project? How will you go about it?
How much will it cost? What is your business model (sources of revenue, operating expenses, investments)?
Why: what does the project address? Why should our company be the one to launch it? What is the aim of the project?
This technique allows you to perform a qualitative analysis rather than a quantitative one, but it will enable you to make an initial assessment and begin your prioritization process.
1. Analyze projects' strategic interests
The first step in prioritizing projects is to determine how the project aligns with the company's strategy. If it doesn't, the project can be resumed or abandoned.
Strategic interests are of great importance within a project, as they enable the company to:
develop its image
stand out in a competitive market
meet global or service strategy objectives
develop the company's key success factors.
If the strategic interests are unsatisfactory, you may decide to continue the project, improve it and reintegrate it into your project portfolio at a later date.
2. Determining the attractiveness of projects
Like the analysis of strategic interests, determining the attractiveness of your projects is a category of external criteria. They do not depend on your company's current situation, but on the market in which your company operates and its competitive environment.
Determining the attractiveness of your projects means, in particular, knowing how your market will receive your project when it is implemented. The interest and acceptance of your project by the markets in which you operate will be decisive to your project's success.
The more your market accepts your project, the more likely your project will be a success at launch.
Knowing your market, its expectations and how it is changing, is therefore essential when it comes to prioritizing your projects.
3. Evaluate your project assets
Following your external study, you're now going to concentrate on the internal analysis of your company and, consequently, of your projects.
The internal assessment is the epicenter of your prioritization, so you need to be well-informed, and first of all you need to have taken stock of what already exists within your company.
When it comes to business and technical assets, the aim is to determine in particular whether the company has the necessary resources to carry out the projects in your portfolio.
You'll therefore be assessing your ability to implement the project, with the technologies available and in demand, as well as your commercial capacity to support the project.
4. Quantify the financial elements of projects
Once you've assessed the resources required, you'll need to quantify the costs involved in implementing your projects.
The main elements will be :
potential sales/savings over time
This estimate will help you in the financial comparison of the projects in your project portfolio.
investments
It is important to assess the amount of investment that will be involved in implementing your projects. This will enable you to determine which projects require the least investment, and which have the highest profitability and ROI potential.
5. Analyze the maturity of project business models
By analyzing the maturity of your business plan, you will ensure that you have correctly defined your projects.
This analysis is carried out with an overview of the internal and external findings you may have made prior to this stage.
You will lay out the value proposition, key resources and activities, and the financial resources required for your projects.
The project maturity analysis enables you to determine the project's strengths, weaknesses, market opportunities and threats. It will enable you to rectify missing elements and highlight the vulnerabilities to which your projects may be exposed.
Project prioritization with Strategeex
Strategeex's SELECT platform gives you centralized access to project prioritization, with pre-packaged diagnostics based on the type of project.
For example, the 5 axes presented in this article are available when analyzing innovation projects.
With SELECT, you'll be able to analyze your projects with precise questionnaires accompanied by graphical outputs that will help you compare your projects and thus decide to prioritize certain projects.
Although the criteria are differentiated according to the type of project (innovation, technology, digital transformation...), the prioritization strategy remains the same. It's about having the right tools to help you choose the best projects for your company and ensure their success.
For further information, please read our article on SELECT, or contact our experts for a demonstration.
Strategeexement.