A short summary of the procedure and its advantages effective and efficient product management!

Introduction

Portfolio management is choosing, ranking, and overseeing a group of projects or products that match the organization's strategic aims and outcomes.

Pharmaceutical companies need portfolio management to ensure that their research and development (R&D) efforts focus on the most promising and profitable opportunities, while dealing with the difficulties and uncertainty that are inherent in the innovation process.

Pharmaceutical companies can use portfolio management to improve their resource distribution, increase their value generation, and strengthen their competitive edge in the changing and complicated market situation.

This document gives a short summary of the top 10 steps of portfolio management in pharmaceuticals, based on the literature review and best practices. The document also talks about the advantages and difficulties of portfolio management and offers some suggestions for enhancing the process and its results.

Stages of Portfolio Management

These stages are not fixed or linear, but rather adaptable and cyclical, depending on the specific situation and requirements of each organization. The next subsections explain each stage more thoroughly.

Stage 1: Portfolio Strategy

The portfolio strategy is the first step of portfolio management, and it is the high-level plan and guidance for the portfolio. The portfolio strategy should match the corporate strategy and the organizational goals, and should consider the external and internal factors that influence the portfolio results.

The portfolio strategy should also define the standards and measures for choosing and assessing the projects or products in the portfolio, such as the return, risk, cost, time, quality, and strategic fit. The portfolio strategy should be checked and revised regularly to ensure its accuracy and relevance.

Stage 2: Portfolio Planning

The portfolio planning is the second stage of portfolio management, where the possible projects or products that can make up the portfolio are identified, screened, and ranked. The portfolio planning should follow the portfolio strategy and the available resources, and should include a thorough and methodical examination of the market potential, customer demands, technology developments, competitive environment, regulatory constraints, and organizational competencies.

The portfolio planning should also take into account the relationships and benefits among the projects or products, and the compromises and limitations that may occur in the portfolio implementation. The portfolio planning should produce a balanced and varied portfolio that can achieve the expected value and outcomes.

Stage 3: Portfolio Selection

Choosing the optimal combination and quantity of projects or products that will be funded and executed in the portfolio is the third stage of portfolio management, which is called portfolio selection. The portfolio selection should use both qualitative and quantitative approaches and tools, such as scoring models, decision trees, portfolio maps, portfolio optimization, and portfolio simulation, and should align with the portfolio planning and the portfolio strategy.

The portfolio selection should also include the involvement and feedback of different stakeholders, such as senior management, R&D managers, project teams, and external experts. The portfolio selection should strive to increase the portfolio value and alignment, while reducing the portfolio risk and complexity.

Stage 4: Portfolio Allocation

The portfolio is allocated in the fourth stage of portfolio management, which means giving and spreading the resources, such as money, staff, tools, and buildings, to the chosen projects or products in the portfolio. The portfolio allocation should follow the portfolio selection and the portfolio strategy, and should use a clear and fair method, such as top-down, bottom-up, or hybrid approaches.

The portfolio allocation should consider the resources' supply, need, and use, and their ability to adapt, scale, and move. The portfolio allocation should try to improve how well and how much the resources are used, while making sure there are enough and suitable resources.

Stage 5: Portfolio Execution

In portfolio execution, the fifth stage of portfolio management, you carry out and oversee the chosen projects or products in the portfolio. You should base portfolio execution on portfolio allocation and strategy, and use the set standards and processes, like project management methods, quality management systems, and risk management frameworks.

The portfolio execution should also require the project teams, the portfolio managers, and the other stakeholders to work together and coordinate their efforts, and to communicate and report on the portfolio status and results. The portfolio execution should seek to produce the portfolio outputs and outcomes, while fulfilling the portfolio expectations and requirements.

Stage 6: Portfolio Monitoring

The sixth stage of portfolio management is portfolio monitoring, which involves checking and evaluating the portfolio status and outcomes, such as the portfolio scope, time, cost, quality, risk, and value.

The portfolio monitoring should use indicators and metrics, such as KPIs, balanced scorecards, and dashboards, to track the portfolio execution and strategy. The portfolio monitoring should include gathering and examining the portfolio data and information and finding and solving the portfolio issues and problems. The portfolio monitoring should strive to maintain the portfolio control and compliance, while offering the portfolio clarity and accountability.

Stage 7: Portfolio Evaluation

The portfolio evaluation is the seventh stage of portfolio management, and it involves measuring and appraising the portfolio results and effects, such as the portfolio benefits, value, and return. The portfolio evaluation should rely on the portfolio monitoring and the portfolio strategy, and should apply different methods and tools, such as surveys, interviews, case studies, and cost-benefit analysis.

The portfolio evaluation should also include the input and learning of the people involved in the portfolio, and the acknowledgement and reward of the portfolio outcomes and accomplishments. The portfolio evaluation should try to show the portfolio value and rationale, while increasing the portfolio happiness and fidelity.

Stage 8: Portfolio Review

The portfolio review is the eighth stage of portfolio management, and it involves assessing and rating the portfolio results and methods, such as the portfolio productivity, quality, and development. The portfolio review should follow the portfolio strategy and the portfolio evaluation, and should apply a consistent and logical approach, such as audits, benchmarks, and best practices.

The portfolio review should also include the evaluation and analysis of the portfolio outcomes and methods, and the recognition and ranking of the portfolio advantages and disadvantages. The portfolio review should seek to confirm the portfolio merit and distinction, while enhancing the portfolio coherence and dependability.

Stage 9: Portfolio Adjustment

The ninth stage of portfolio management is to adjust the portfolio, which means changing and updating the elements and settings of the portfolio, such as the projects, products, resources, and strategy in the portfolio. The portfolio adjustment should follow the portfolio review and the portfolio strategy, and should use a nimble and responsive method, such as portfolio rebalancing, reallocation, and realignment.

The portfolio adjustment should include adding and removing portfolio elements, and changing and revising the portfolio goals and standards. The portfolio adjustment should keep the portfolio relevant and valid, and adapt to the portfolio changes and uncertainties.

Stage 10: Portfolio Governance

The final stage of portfolio management is to manage the portfolio, which is the process of setting and following the portfolio rules and roles, such as the portfolio policies, processes, and tasks. The portfolio management should be aligned with the portfolio strategy and the portfolio changes, and should use a simple and consistent structure, such as portfolio groups, panels, and offices.

The portfolio governance should also include the supervision and direction of the portfolio actions and choices, and the coherence and integration of the portfolio with the other organizational roles and procedures. The portfolio governance should seek to ensure the portfolio responsibility and clarity, while facilitating the portfolio cooperation and teamwork.

Benefits of Portfolio Management

Portfolio management can help the pharmaceutical industry in diverse ways, such as:

·       Boosting the portfolio value and return, by choosing and following the best and most lucrative projects or products.

·       Lowering the portfolio risk and uncertainty, by spreading and diversifying the portfolio across different factors, such as therapeutic areas, development stages, and market segments.

·       Ensuring the portfolio's alignment and fit by making sure that the portfolio matches the corporate strategy and the business goals.

·       Improving the portfolio performance and quality, by allocating and using resources optimally, and by simplifying the portfolio processes and practices.

·       Enhancing the portfolio's appeal and edge, by finding and seizing the market opportunities, and by providing the customer value and satisfaction.

·       Enhancing the portfolio innovation and learning, by supporting and empowering the discovery and use of new ideas and technologies, and by enabling the feedback and improvement of the portfolio results and impacts.

Challenges of Portfolio Management

The pharmaceutical industry may also face different challenges in portfolio management, such as:

·       Handling the portfolio's complexity and changes, by balancing the various and opposing goals and standards, and by adjusting to the shifting and unpredictable market and technology.

·       Combining the portfolio's data and information, by gathering and merging the related and trustworthy portfolio inputs and outputs, and by guaranteeing the portfolio's correctness and wholeness.

·       Using the portfolio methods and tools, by selecting and applying the fit and strong portfolio techniques and models, and by managing the portfolio limitations and assumptions.

·       Involving the portfolio stakeholders, by engaging and communicating with the varied and spread portfolio actors and interests, and by settling the portfolio conflicts and disputes.

·       Developing the portfolio culture and capabilities, by creating and maintaining the portfolio awareness and dedication, and by improving and strengthening the portfolio skills and competencies.

Conclusion

This document has given a short summary of the top 10 stages of portfolio management in pharmaceuticals, based on the literature review and best practices.

The document has also explored the advantages and difficulties of portfolio management and has suggested some ways to enhance the process and its results. Portfolio management is a crucial and complicated process that demands a comprehensive and methodical approach, and a constant and repetitive cycle.

Pharmaceutical companies can use portfolio management to accomplish their vision and mission, and to generate and provide value for their partners.

References

·       Cooper, R. G., Edgett, S. J., & Kleinschmidt, E. J. (2001). Portfolio management for new product development: results of an industry practices study. R&D Management, 31(4), 361-380.

·       DiMasi, J. A., Grabowski, H. G., & Hansen, R. W. (2016). Innovation in the pharmaceutical industry: new estimates of R&D costs. Journal of health economics, 47, 20-33.

·       Kester, L., Hultink, E. J., & Griffin, A. (2014). An empirical investigation of portfolio decision‐making practices. Journal of Product Innovation Management, 31(6), 1209-1227.

·       Kock, A., Heising, W., & Gemünden, H. G. (2016). A contingency approach on the impact of front‐end success on project portfolio success. Project Management Journal, 47(2), 115-129.

·       Martinsuo, M., & Poskela, J. (2011). Use of evaluation criteria and innovation performance in the front end of innovation. Journal of Product Innovation Management, 28(6), 896-914.

·       Meskendahl, S. (2010). The influence of business strategy on project portfolio management and its success—a conceptual framework. International Journal of Project Management, 28(8), 807-817.

·       Müller, R., Martinsuo, M., & Blomquist, T. (2008). Project portfolio control and portfolio management performance in different contexts. Project Management Journal, 39(3), 28-42.

·       Ringel, M., Taylor, A., & Zabinski, Z. (2017). Launch excellence in the new normal of pharma. Boston Consulting Group.

·       Stummer, C., & Heidenberger, K. (2003). Interactive R&D portfolio analysis with project interdependencies and time profiles of multiple objectives. IEEE Transactions on Engineering Management, 50(2), 175-183.

·       Tavana, M., Keramatpour, M., Santos-Arteaga, F. J., & Ghorbaniane, E. (2015). A fuzzy hybrid project portfolio selection method using data envelopment analysis, TOPSIS and integer programming. Expert Systems with Applications, 42(22), 8431-8444.