In today's highly competitive market, companies need to constantly optimise their
planning, technologies, processes, products and services in order to create growth
and competitive advantage. Companies spend significant resources in maintaining
their competitive edge by investing in new offerings and improving existing products
to address changing market demands.
Strategic investment decisions cannot be left to chance. A disciplined approach from
initial concept through to final plans leads to greater efficiencies and gains in project
implementation and a shorter time to market. A full interpretation of the business
environment through the application of advanced modeling and analysis software tools
is critical to the success of a project (or programme of projects), from initial planning
to construction and final operations.
Increasing complexity and time pressure for the development of markets,
applications, technologies and organizations require enhanced support for
innovation activities, such as the recognition of the best idea, transformation
of a business idea to a business concept and plan, development of a business
(revenue) model and preparation of a business case. The business model is
vital in assessing which ideas will maximise returns and in defining required
resources and competencies.
Strategic investments need to be justified, prioritized and approved. A valuation
model should not just quantify an investment but should identify its real value.
It should also encourage departments to identify, monitor and manage the most
important value drivers during the investment process.
Traditional Static Net Present Value (NPV) methods provide only a partial answer
to valuation, because they neglect the value of managerial flexibility and assume
that management behaves passively. Flexibility captures upside potential and
limits downside losses. As a result all risks have a negative effect on value and
therefore may lead to inaccurate valuations and incorrect strategic decisions!
'No one can predict the future' is an often heard quote. Nevertheless some
companies consistently introduce exactly the right offerings at exactly the
right time. Sometimes it is a stroke of luck but often it is based on a clear
vision. The true value of an idea is determined by identifying trends and
business drivers, by drawing up multiple market scenarios, and by gauging
the value of the idea against the business's own strategy and environment.
Projects have different complexities and degrees of uncertainty. The business
case highlights business objectives, critical parameters, costs, risks and
uncertainties. During the project risks are dealt with and uncertainties
reduced on a step by step basis in order to achieve the objectives. It is there-
fore possible to draw up development, organization, communication and
This highlights the optimal manner to distribute resources among the various
options/projects, to ensure:
A maximum yield is realized against acceptable risks.
There is a good fit between the projects and the various strategic themes.
There is a good mix between the various types of projects (new platforms,
new generations, high and low risk projects, short-term and long-term
Exploration of new and existing markets and technologies.
A 'technology-business roadmap' is a need-driven planning process that helps
identify, select and develop technological alternatives to meet future product
and market needs. Roadmapping integrates market and technological strategies
by identifying critical (product-related) needs that determine technology
selection and investment needs, identifying and selecting technological
alternatives and managing the implementation process over time.