Implement Strategy

The new model of PPM implies the following relationships:

• Funding more projects decreases the quality of project selection and thereby decreases portfolio ROI.
• As uncertainty increases, the quality of project selection suffers. To create value in these situations, you must fund projects more cautiously.

Star DS is developing new metrics that help you manage these relationships. If these metrics are successful, they will answer the following questions for you.

• Are our strategic & financial goals compatible?
  By estimating the impact of uncertainty and funding on portfolio NPV and ROI, you will see if your financial goals and strategic goals are compatible. Can you really fund all of those projects and still maintain a high ROI?
• How should we diversify our portfolio?
  If your company has enough data, Star DS can estimate the financial impact of uncertainty and funding on each business unit, therapeutic area (for pharmaceuticals) or other classification of your projects. You will know which business units can make money now and which require improvement.
• Can we achieve our plans?
  PPM plans that call for aggressive funding and low failure rates may be infeasible. They violate the physics of project selection and Phase-Gate systems. Star DS is developing new metrics that will prevent you from wasting capital and resources on infeasible plans.
• How can we increase support from c-level executives?
  By answering the above questions, Star DS's model and metrics give c-level executives greater confidence in PPM's ability to implement strategy and create value.

Optimization models can address these questions as well, but optimization models rely on expectations. The new model answers the above questions by analyzing PPM results -- your proven performance.