Product Development Backlog

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Improving Technical Productivity

PRODUCT ENGINEERING - R&D - I T - SCIENTIFIC

Product Development Backlog

Gary C. Hinkle - President, Auxilium, Inc.

The Idea Bucket: Three Steps for Improving Your Idea Generation, Tracking and Assessment Process offers tips for generating and tracking ideas for new products and product enhancements. With a healthy backlog of ideas in your repository, you need a system for evaluating those ideas and moving forward with the best ones. Your objective should be to thoroughly assess the business case for each new product idea and weigh against other investment opportunities.

Many companies struggle with selecting the best investment choices for advancing their product portfolios, and the struggle can often be attributed to projects competing for funding where few clearly stand out as winners. Another typical problem is that there are only a few investment choices to consider because a significant number of ideas have not been assessed, so few are waiting in the queue as new product candidates.

If a relatively large number of ideas have not been assessed, then it's likely that there is great potential for the organization to generate more lucrative investment choices. What can be done to generate more winners?

Assuming a healthy repository of ideas to be evaluated, a concept similar to the process we described for generating ideas applies to developing and assessing the business case for product concepts. Designated people in your organization must be responsible for churning out product proposals. The best-suited people have a broad understanding of your business. They need to understand your customers, your technology, business strategy, resource constraints, and they should be capable of forecasting changing business conditions to estimate how future products will perform when they reach the market.

This entire range of skills and knowledge is rarely found in a single individual, but a small team of people with appropriate marketing and engineering experience should be able to share in this responsibility. Over time, these individuals should develop adequate breadth and depth of skills to become very proficient at assessing business opportunities.

Churning out high-quality proposals could be full-time responsibility for a team, and expectations should be set very high. Consider making this responsibility part of a functional group, such as a Systems Engineering or Business Development group, but ensure that you have adequate representation from marketing, engineering and other necessary disciplines (depending on what products you are developing).

Organizations sustaining existing products need to consider the appropriate level of investment to maintain those products vs. developing new products, and there should be ideas in the repository pertaining to both existing and new products. Typically, multiple ideas can be grouped in various ways to form product concepts.

Setting goals for the number of product proposals expected is a simple way to communicate expectations, and this is a reasonable approach as long as the quality of the proposals is consistently high. That doesn't necessarily mean that most proposals will be accepted for development funding, but certainly the quality of the research, fit to business strategy, etc. must meet desired expectations.

If allocating resources to perform this work full-time is not something you think your organization can afford, consider the following questions:

Is there an adequate stream of product concepts being considered?
Does the product portfolio yield the desired profitability?
Are a significant number of development projects cancelled or redirected due to changing business potential?
Are too many resources engaged in maintaining existing products?

The answers to these questions may justify a greater investment on the front-end of your development cycle to ensure that your backlog of products in development will yield the best possible results when the products reach the market.

Consider the following graph showing a distribution of product development and support activity:

In this example very few resources are utilized for maintaining legacy products. Most of the resources are developing new products (and/or improving existing ones), and there is also healthy R&D activity applied toward innovations that will be important for future products. This organization also allocates resources to work on breakthrough innovation, which they hope leads to highly profitable new products. This example shows commitment by the organization to balance resources appropriately to ensure a steady stream of profitable new products and innovative ideas.

Tracking their resource allocation in this manner enables them to measure their performance against established benchmarks and adjust accordingly over changing business conditions.

This next example shows an organization that struggles to consistently get new products to market in accordance with their plans:

Tracking how their product development resources are allocated indicates heavy utilization to support legacy products, and very little R&D activity. This particular organization is a small manufacturing company with a large percentage of their employees in product development. They are not striving for breakthrough innovations, but they would definitely like to get more new products out the door.

Analysis of resource allocation in these categories points out the lack of investment in product development and R&D compared to the maintenance of legacy products. It may be appropriate for this organization to cut back on the lowest priority maintenance work so that their people have more time to work on projects that have greater income-generating potential.

Ensuring that adequate resources are generating proposals for new product development, and establishing benchmarks and metrics for various product development activities (or project types) are two major things that can help ensure consistently effective R&D investments.