Product Portfolio Management: How to Optimize Product Strategies

If you offer more than a single product, you have everything you need to start managing your product portfolio.

Product portfolio management (PPM) is used to create a more detailed and specific plan for the product mix as a whole. The management of these products makes space for prioritizing market leads, demand planning, and allocating resources wisely.

While some companies may choose to focus their attention on each product and where it fits in the market, a company that leverages product portfolio management may want to find market opportunities for its entire portfolio. By analyzing and assessing all aspects of a product portfolio, companies can ensure that essential budgets are invested with product success in mind. 

A product portfolio management strategy works in two areas: new product development (NPD) and existing products as they move through the product life cycle. These items make up a product portfolio, and managing them along the way can create the foundation for a smooth developmental process. 

What is a product portfolio?

If you’re wondering where to start when it comes to managing your portfolio, the first step is to identify what is included in your company’s portfolio of products. 

A product portfolio is a range of all the products and services that a company provides. This includes the products currently being sold, products in rotation, or products about to be launched. This collection of products can help a company identify growth potential, new opportunities, investment possibilities, and assess risks.

The priceless insights from portfolio management allow a company to look at its business structure from a well-rounded financial perspective, distinguish what parts of a product portfolio are most beneficial or least valuable, and adjust offerings accordingly. Companies can then create product portfolio roadmaps to ensure that every step of the product evolution process is streamlined. 

A product portfolio roadmap is a comprehensive route that a product follows throughout its life cycle and development. Several products can live on the same roadmap as they move through the development process from ideation to production to conclusion.

With the help of product lifecycle management, the roadmap is created to set realistic expectations regarding the timeline of product production. This timeline is essential when managing the product portfolio because it helps visualize how each product fits into overall company strategies and goals. 

Why is product portfolio management important? 

Product portfolio management offers various benefits for optimizing a company’s product offering and increasing market growth opportunities. These benefits strengthen the overall strategy of a business structure by creating a solid set of products in the portfolio and managing them effectively.  

Streamline investments

Managing your product portfolio will help you identify room for growth and monetary needs that may have never been discovered otherwise. Company budgets are fragile and require extensive metrics and research to be allocated successfully and increase return on investment potential.

When products are analyzed and organized into effective product portfolios, money can be distributed fairly, with every investment being used for significant purposes. 

Decrease time-to-market

With a better outlook on market trends and where your product lines fit into current market needs, getting items efficiently into customers’ hands becomes more attainable. Product portfolio management optimizes the entire product development process and helps get products out the door faster. 

Respond to market changes 

Having a greater understanding of your production processes allows you to quickly identify how market changes may affect your current product portfolio. That understanding will reveal what external factors will affect your product and company as a whole, and responding to them efficiently will be more instantaneous. 

Create competitive leverage

After decreasing time-to-market and responding to changes with ease, more opportunities open for leveraging market supply and demand. The ability to recognize your product’s current role in the marketplace and where your product may have an advantage over other competitors in the future is priceless. 

Improve collaboration

Collaboration in product teams thrives in an environment that prioritizes preparation and communication. When you’re constantly managing and organizing different business processes and relaying that information to all company personnel, there are fewer questions and mistakes that usually arise from miscommunications. 

Increase product productivity

The better the organization within a company, the better the visibility into growth opportunities and potential solutions to existing issues. A successful product portfolio management plan will leave you with the keys to increasing productivity and efficiency. 

How to manage your product portfolio 

Managing your product portfolio starts with taking literal and figurative inventory on the different aspects of your company that affect every step of the product development process.

Follow the steps below to optimize the way you coordinate product portfolio management:

1. Conduct a product analysis

A product portfolio analysis involves examining every aspect of the product and its performance within the portfolio. It starts with taking that product performance analysis and determining strengths and weaknesses for each product in the portfolio. This includes identifying where each product lies in its life cycle, from introduction to maturity or decline. 

2. Analyze your product lifecycle

Once you have identified all of your significant products and where they currently stand in the life cycle, analyze the product lifecycle itself. Recognize what stages of the life cycle may be a weakness and how long your product lives in the life cycle.

Do you find that your product gets stuck in the introduction phase and rarely takes off? Does your product seem to speed through and decline faster than others? Make judgments based on this information and make sure you’re left with products that have the potential to be cash cows for your business.

3. Assemble your product portfolio

After creating a comprehensive product analysis and analyzing your life cycle, you’re ready to assemble your product portfolio. Creating your portfolio may call for some difficult decision-making regarding a product’s role in your business structure. Before finalizing the portfolio, ensure that you have eliminated any items that aren’t successful anymore and no longer contribute to overall company profitability. 

4. Distribute resources

Allocating the necessary resources for product production is detrimental and can play a huge role in whether the product will fail or succeed. 

Knowing exactly what’s included in your product portfolio makes it so much easier to understand what’s needed to carry out those products in production. By effectively allocating resources, a company can expect to waste less money on excess materials, improve time management by having clear expectations, create efficient inventory management strategies, and increase internal transparency as communication regarding resources is defined. 

5. Organize product portfolio roadmap

Creating a product roadmap is essential when attempting to time manage the product portfolio. The roadmap also serves as an overview for internal decision-makers and external investors who need insight into the timeline of a product and its development. The roadmap will show the key product initiatives for each step of production and how those initiatives and business goals will be met.

To create a roadmap, arrange all products in order of priority, followed by the critical business objectives that need to be met for each. Acknowledge how many stages are involved in the development process, what needs to be done, and when. 

6. Optimize product development 

After all the previous steps are completed, you now have all the necessary knowledge to make significant product development decisions. Remove products that hinder company success, ensure budgets are being utilized effectively, analyze and assemble your all-star final product portfolio, allocate the necessary resources, and create your unique product roadmap.

Once all that is done, you’re left with a well-rounded product portfolio management strategy that meets all your company product needs and wants. 

What is the difference between a product portfolio manager and a product manager?

Product portfolio management and product management work hand in hand to ensure that a product enters the market efficiently and comes out as a success at the end of the life cycle. However, a product portfolio manager and product manager have slightly different purposes for their roles in the production process.

A product portfolio manager’s responsibility lies in the company’s product portfolio and how the offerings fit into the current market. Their main goals are to ensure products are effectively prioritized, make portfolio decisions regarding product cuts, and conduct strategic planning for the portfolio as it moves through the life cycle.

Product portfolio managers need to be well-versed in prioritizing the necessary products and making real-time changes at the request of a product manager. 

A product manager, sometimes referred to as a product owner, is primarily responsible for a specific product within the portfolio, what the product’s roadmap looks like, and how the product business strategy plays out. The product manager is expected to be an expert in everything surrounding their product.

The product manager will have more detailed information regarding a product, such as specific timelines, target audience, stakeholders, and what makes that product a cash cow. For example, a product manager may utilize demand planning software to predict customer demand and organize the development of their particular product accordingly. 

Product management software

Although product management and product portfolio management differ, they’re both needed to ensure a successful product and ideal market performance. 

Product management software allows companies to ensure transparency and open communication in the development process of a product. The software includes timeline creation, system optimization, collaboration spaces, and many other product innovations needed for efficient production from ideation to completion. 

Product management software also offers tools for product portfolio management, roadmap development, resource allocation, and agile workflows. 

To be included in this category, the software product must be able to:

• Offer tools for product creation and development
• Provide roadmap capabilities for tracking product progress
• Allocate resources for company project progress
• Boost productivity with agile strategies
• Increase organization and prioritization by backlogging product ideas

*Below are the top 5 leading product management software solutions from G2’s Summer 2021 Grid® Report. Some reviews may be edited for clarity. 

1. Asana 

Hit important product development deadlines with Asana. Asana allows you to organize projects into comprehensive portfolios and utilize automation for organizing workflows.

What users like:

“Over the last two years, Asana has been instrumental in our organization’s transition from a reactive and chaotic workplace to a collaborative and organized workplace. It is highly useful for collaboration on projects, especially with new features such as Messages. It provides a transparent process for any project, allowing team members to be aware of the project process and next steps.

Asana has a very clean and friendly interface, making it easy to use for any team member. We have expanded our use of Asana from product development to workflow management, collaborative information tracking, and marketing campaign development.”

- Asana Review, Alicia J.

What users dislike: 

“There are ways to control email notifications within each project (or turn off completely), but in spite of training, I still struggle with that as I set up new projects and getting enough, but not too many, reminders.

Subtasks are great to hide granular-level items or break down a single task to multiple users, but they're not automatically assigned to the parent project of the task they're created under. Notifications don't include the parent project name, and the task isn't always clear when taken out of context.”

- Asana Review, Mark A. 

2. Jira

Jira is your hub for team planning and product building. Prioritize and discuss workload, streamline your product roadmap, and do it all with a tailor-made security solution. 

What users like:

“I'm a big fan of Jira for product management. When working with our engineers, we like to have a fair amount of visibility into what stories we have on the road map, individual tasks that need to be accomplished, and who is responsible for each.

Jira makes it easy to organize all the above. I also love how easy it is to arrange and update sprint planning. Automatically moving incomplete tasks to the new sprint is a nice feature.”

- Jira Review, Nicole W.

What users dislike: 

“The highly customizable nature of JIRA means you can get into some headaches if you don't think through options. The UI for JIRA continues to improve and change, but some changes can be a little dramatic, and overall, the UI seems to shift each release towards more simplicity. At times this can remove a feature you’re reliant on and will make you go searching for it again. The complex UI for JIRA also means that you might encounter some slowness when running it in your browser. Our team was able to create our own UI to help speed up certain views and make sure we only saw what we needed without slowdown.”

- Jira Review, John L. 

3. monday.com

Choose from over 200 workflow templates and customize them to fit your needs with monday.com. Monday.com allows you to keep track of all the moving pieces in product development by sharing files and communicating on any device. 

What users like:

“Monday.com is the most versatile project/product management software I've used (and working across several teams in many organizations, I've seen them all). Monday.com has continued to improve the product through integrations, automation, and templates that just work. It's also a tool that works for many different types of employees.

Our team is composed of creative free-thinkers, rule-and-systems-based thinkers, and everywhere in between. Monday works for each type of employee because it becomes what you make it.”

- monday.com Review, Jared M.

What users dislike: 

“While it is extremely flexible, my team went through 5 board layouts before we settled on one that was fitting for our teams. The templates offered are great for product management, but at our agency, they didn't help very much. There also needs to be a better dashboard. Just a simple inbox doesn't seem like enough after looking at other tools.”

- monday.com Review, Josh J. 

4. ClickUp

ClickUp gives you the tools for creating detailed and precise workflows. With ClickUp, companies can control their production process from beginning to end while managing each task along the way. 

What users like:

“The flexibility is top-notch. The multiple 'layers' available to better organize your content are just perfect. The different views available, the multiple integrations cover almost everything. This has become my hub for project management, product management, client management, brain dump, and personal organization. The ability to collect data, filter, and organize it, however, fits your needs, allows you to add a LOT of content without feeling overwhelmed. The dashboards are also super useful to display a lot of information in one glance.”

- ClickUp Review, Stéven R.

What users dislike: 

“ClickUp can be extremely powerful, but you do have to 'make it work for you.' Be prepared to spend some time in the initial building of your project templates, statuses, views, and workflows. The support documentation is fantastic, but this is not a "canned" product that's necessarily ready-to-use out of the box. While you can use it as it comes, its true power is through customizing it to work for you.”

- ClickUp Review, Mike H. 

5. Wrike

Create a unique team collaboration management platform with Wrike. Wrike can be configured for any team while unifying all projects throughout an organization. 

What users like:

“Wrike is the perfect project management tool, and it is ideal for me to use it in companies where there are more than 20 people. This tool gives us the business security and stability that we have wanted so much. Its characteristics are ideal for project managers, product managers, and administrators of Gantt diagrams.

Wrike includes a workload view for resource management, custom panels, structuring through folders, projects, and tasks, and automatic assignment based on the status of the task. It is an online tool that we can use on our computer since its installation is simple.”

- Wrike Review, Blanca S.

What users dislike: 

“The disadvantage about this software is that its reporting functionality is not the best, and it also has very limited functions. Using this software, we have not been able to import databases with the information of our contacts since the platform does not allow the importation of many formats, so our work becomes a bit limited. It also does not allow to manage timesheets, and its integration with Dropbox and other platforms is very slow.”

- Wrike Review, Mark H. 

Drop the dead weight

It’s time to tell that product, “it’s not me, it’s you.”

The hardest part of optimizing your product portfolio is that everything is trial and error. You may need to start all over and run through the product lifecycle a couple of times before identifying that a product is doing more harm than good. But from there, you have all the tools you need to optimize your product portfolio in the future. 

Jumping headfirst into product portfolio management starts when you have products you want to sell. By managing those products, you unlock the ability to save time, money, resources, and valuable space for products that will bring you more success. You will be able to predict how a product will move through its lifecycle and roadmap before it is even in production. 

That kind of preparation isn’t easy, but it sure is worth it. 

Ready to implement product portfolio management into your company’s life cycle? Check out how IT organizations use portfolio management to strategize and save money.