Funding New Product Projects

When a portfolio of new products or new projects is generated using the analyses above, the candidate projects enter the resource and budgeting process. They are typically prioritized and available funds are allocated to each project based on a weighting scheme of some kind using the results of the weighted scoring model used to select them.

For instance, see the example below (see Figure 2-2) showing how three new product projects are funded. First, the company vision and mission are stated and broken down into goals, or program areas, such as Consumer Products, Business-to-Business Products, and Government Sales. Then five strategic objectives are stated (as in the weighted scoring model), numbered in the figure 01 through 05. Each objective is given a priority percentage (using the ones developed in the weighted scoring model or updated ones), shown in the fraction below the objective number. For instance, objectives 02 and 04 rank high at .3, while 01 and 05 are low at .1.

Total available

Available Funds 4,000,000 5,000,000 3,000,000 4,000,000 4,000,000 is 20,000,000

Total available

Available Funds 4,000,000 5,000,000 3,000,000 4,000,000 4,000,000 is 20,000,000

Projects in Priority

Total funding

#1 Supports what objective (%) 0.6 0.4 Cost : 2,000,000 Gets 1,200,000 (.6x2 m) 800,000 (.4x2m)

Total weight.140 (.6x.1+.4x.2) 2,000,000

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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