“Portfolio management” has many meanings depending upon the situation. In R&D and New Product Development, there is often confusion between strategic and operational portfolio management. In SmartOrg’s view, strategic portfolio management is about the future, where there are few or no facts, and operational portfolio management is fundamentally about activities in the present, where there is an abundance of data and information.
SmartOrg solutions support decisions about investments in projects and portfolios that are future-focused with emphasis on the impact of risk and uncertainty on achieving forecast value. SmartOrg software has proved its value in the pharmaceutical industry, where development cycles are long and risks are high.
Strategic portfolio management helps organizations prioritize their resources to focus on projects that have the highest likelihood of success. No company, no matter how large, profitable, or innovative, has the resources to pursue every idea that its employees dream up.
Nowhere is this truer than in the pharmaceutical industry. Developing drug therapies is a numbers game. Only one in 5,000 drugs developed in a laboratory will ever make it to market, and it often takes more than a decade for a therapy to go through all of the testing, evaluation, and research before it is approved for sale. It is an extreme pyramid, and the industry is littered with the remains of companies that didn’t focus their energy and effort on the things that were most likely to create value. In many cases proper portfolio management can mean the difference between massive success and having to close the doors.
Pharma companies that thrive and survive do so because they have learned to eliminate projects, regardless of size, as soon as they realize that a successful outcome may be elusive. This allows them not only to avoid dumping resources into work that will never see the light of day, but it also allows them to reallocate their teams to focus on drugs that have a better chance of making it through the gauntlet. However, it’s a lot harder than it sounds because individuals and teams can often get entrenched in certain projects and develop an attachment to something that may ultimately not create positive outcomes.
A leading pharmaceutical company’s Director of Portfolio Management described why the company decided to make SmartOrg its sole technology platform to help manage this critical aspect of its business. “In this industry we need to focus our efforts on projects that we think are going to work and divert resources away from those that don’t have a lot of promise. Everyone looks at spreadsheets all the time, but we need a focused, organized, disciplined approach to figuring out what to keep and what to put on the back burner. SmartOrg gives us an easy way to look at all of our information in a format that makes it crystal clear so that we can make the decisions that we need to make. It’s a great resource for us, and it is really helping us excel in this aspect of our business.”
Companies are made up of people who have deep expertise and knowledge that drives innovation. At the same time, however, decision-makers are guided by factors other than cold, hard data. SmartOrg’s role is to help leaders make educated and informed decisions that are driven by real information rather than “soft” factors that often influence how companies allocate their resources. Our approach and platform are driving the development of new drugs and allowing our clients to focus on their core strengths.
Business model development Workshops
Support faster decisions at all levels
Avoid spreadsheet drudgery and rework
Evaluate “what -ifs” in real time
Balance risk vs. return
Develop and manage multiple P&Ls
Identify and kill losing projects early