PPM is generally governed by corporate-level strategy. One of the popular way of representing PPM is by way of strategic buckets. Meaning, there can be 4 to 5 strategic buckets where the organization will focus when it comes to putting efforts and R&D $. Organizational positioning and market penetration are very important, while the IRR (Internal Rate of Return) is important from financial viewpoint. If we consider 4 strategic buckets. They could be NTE, NTS, MI & IC. PPM helps us to map our vision & resources. If the vision hinges on high brand recall, profitability & market penetration, then, resources have to be focused mostly around NTE & NTS. Possibly around 60% of the resources & investments may revolve around NTE / NTS. If the organization is not that ambitious or does not have the deep R&D core competency, it may as well focus more on MI/IC. Some investments could be there for NTS.
The diagram here would help us understand the strategic buckets distinctively to map the revenue expectation and R&D investment % for an organization of say US$ 100 billion sales. This is just an example and the numbers need to get aligned to the organizational vision / goal and resources / competencies. One can also map the expected profitability which will be higher for NTE, followed by NTS, MI & IC in that order. For deeper understanding of each of these buckets, please wait till next week when we will blog-post NTE to start with.
This is just one-dimensional view of PPM. Let’s bring another dimension. Strictly speaking we may not be able to call it PPM anymore; we may call it SPM. While PM continues to mean the same, “S” (Solution) replaces the first “P” (Product). Since “S” will be covered in broader perspective in my future blog-post, I will not talk much about solution here (http://sami-kar.blogspot.com/2012/05/3-major-steps-in-solution-business.html). The only flavor I would like to bring here is the strategic fit. This elevates the products to a higher level platform, which will enable customers to derive much higher value. In other words making “2 + 2 > 5”. This strategic fit can be viewed, as an example, in Apple’s iTune, GoogleEarth, and many more. If iPod is an NTE product, iTune completes the product through a most fitting solution. The strategic fit is superb. It completely changed the game. iTune is also created an NBM revolutionizing the music industry. It’s like 3-In-1. It’s an NTE, followed by strategic fit to “solve” a problem and delivered through NBM.
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