Portfolio Planning Management PPM Description

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The overriding purpose of PPM is to improve productivity in R&D, obtaining more regulatory approvals in number, on a global basis, with better quality, at a faster rate, and at less cost, through better planning, decisions, and execution. Companies further desire to avoid failure in regulatory approvals. A formal and well-run PPM process can make for better communications, better decisions, better process indicators, more efficient work, better product candidate choices, better indications and safety with the products, better labeling, better global coordination, better relations with investigators, better transparency, and thus better relations with regulatory authorities, less cost, and better postapproval marketing, and, therefore, more effective drugs for patients and better business success. Even though the advantages of PPM are manifold and principal to success, it is quite hard to achieve because of the complexity and high costs of product development, pressures from corporate leaders and boards for rapid progress, personnel variables (biases, knowledge or experience deficits, territoriality), patient and disease variability, product performance questions, the unpredictability of research, evolving knowledge base, global company challenges, many types of markets, volume of customer and research data needed, and evolving regulatory hurdles. The industry and our PPM practices need to always realize that major breakthroughs occur when innovators challenge the current paradigm and investigate new options even when all the facts are not well established. PPM on a global scale has become a certain best practice for success in R&D to manage the above-noted problems and help create the blockbusters.

Essentially, PPM should sit in a company at the center of a crossroads where six roads come together representing pre-clinical research, clinical research, regulatory, manufacturing, marketing, and global operations, with oversight from the senior management team. However, effectiveness of PPM also is dependent on established cooperative and communicative relationships without controlling, intrusive (operations), or appearances of spying behavior. It is good to be reminded that PPM does not set the mission and strategy, does not lead the departments and divisions, does not make the decisions, and does not do all the work. PPM is a process and organization involving well-informed people (organizers, collaborators, communicators, and planners with vision) who assist the development and business leaders (executive management, departments heads, and team leaders) to make it all happen within a framework; that is, they know what we are doing and why, when and how it is being done, and they are getting there as intended. In short, PPM should be facilitating good quick decision-making [22, 39, 40].

A useful and practical list of pitfalls in filing of regulatory applications was published in 2003. We will list them here and will return to them after our PPM discussion to judge how well PPM, as we discuss it in this chapter, will help minimize these 15 pitfalls: (1) not communicating with the regulatory authorities, (2) avoiding the safety issue, (3) lack of planning, (4) omitting data or including unnecessary data, (5) not paying attention, (6) not documenting manufacturing process, (7) ignoring the investigators, (8) forgetting conflicts of interest, (9) hiding something, (10) being too eager to disclose to the public, (11) not thinking globally, (12) not thinking about electronic submissions, (13) rushing, (14) not choosing wisely, and (15) filing a drug that is not needed [43]. This section of the book will include why do it (PPM), the elements of it, the players to do it, manager concerns about it, and metrics to measure it. Later sections will cover the process elements of PPM and types of analyses.

What is the rationale to conduct portfolio project or product management (PPM) as a core process and skill set for senior management in a company's decisions and operations for product development? Six benefits of PPM are addressed in Figure 2.13. The executive committee of the company needs a process to assist in a structured way to implement their corporate strategy across the whole organization and to understand gaps in strategy, planning, operations, or resources. Please be reminded that the FIPCO includes at least eight divisions that all have their individual roles in executing the corporate strategy; the operational divisions of research, development, marketing and sales, manufacturing, and the support divisions of law and regulatory, information, human resources, and finance. Coordination, integration, progress tracking for execution, and goal achievement can be done with a PPM organization for product development across these eight varied organizations. Resource allocation of staff, systems, and budget needs to be done in a balanced and organized way for all the various projects for individual products and of overall portfolio levels, based on availability, need, capability, and priority. Again, PPM offers the company

PPM (Portfolio Project Management)

r Execute corporate strategy r Allocate resources r Determine hiring needs (resource needs) r Assess & limit risk management r Improve budget management r Underpin corporate planning Fig. 2.13. Portfolio Project Management - Why do it?

and management the process to do it. Another part of resource assessment is to determine strengths and gaps in staffing, based on the global product portfolio plans. Individual departments and divisions will perform this analysis, but PPM will guide the process to assure consistency and matching with the global plans. The end result would be that integrated needs are established for staffing for product development, and the best people with proper expertise and skill sets for work to be done can be hired at the company or employed through external consultantships.

Product development is a very risky and expensive business with only one in 5,000 products from research eventually being approved and marketed. Every decision will have pros and cons and carries a risk of success or failure, the later of which a company will try to reduce. Through PPM processes, risk assessment for plans and decisions can be done to give this added perspective to management in making more informed and better decisions; thereby risk of failure is lowered by factoring in risks in the outcomes of decisions. Does this study have a 25% or 75% chance of success? Does the manufacturing decision for a new plant lower risk of product outage postmarketing or add unnecessary cost? Budget decisions are always a primary focus of an organization. PPM offers methods to improve budget decisions across an organization, for example, through an integrated and executable strategy, more organized resource allocation, more useful progress reports, and especially better go-no go product decisions. Finally, PPM is the support (underpinning) organization and process for corporate, portfolio, and product planning and tracking of execution, as we have discussed previously. The Boston Consulting Group has done a variety of studies with medical technology companies to determine their set of best practices. In looking at the best high science r Corporate strategy & leadership r Planning, Planning, Planning:

O Project plans 0 Therapeutic area plans O Product plans r Teamwork AND Follow-through r Process and methods: C Global plans O Product profiles r Organizational participation O Mandate from the top O [email protected] levels C [email protected] levels

Fig. 2.14. What are the Elements of PPM?

companies versus all others, they found that PPM was defined by 89% of the best high science companies versus 66% of all others and actually followed by the companies in 83% of the cases versus 57%, respectively [8-10, 22, 41, 42, 44].

This description of PPM will involve seven topics; leadership, planning, teamwork, process and methods, organizational participation, portfolio data, and decision making (Fig. 2.14). The senior management group, the leadership, must create the vision, mission, and overall strategy for the corporation. This information is the critical framework for the whole organization, all staff, all plans, all operations, and all products. Basically, a company needs to know where it is going first for PPM to assist the company in executing on the strategy. PPM involves all levels of planning, starting from the top, the portfolio, through the products, and to the individual projects. All levels should not be just layered on top of each other, but integrated for a fully effective PPM. Another best practice within PPM, actually a requirement for success, is teamwork. PPM guides, coordinates, integrates, helps communicate, and measures across all the various operational groups who are needed for a project or product. The team of people performs all the work. The team also needs to follow through on the plans and work projects within the goals and plans, that is, operational excellence of teams is another best practice. PPM incorporates a specific set of processes and methods to assist the company to carry out the product and portfolio plans. Previously, we discussed a global product development plan and process that would be used by a PPM group to do portfolio planning and management. Product profiles are used to frame the targets for R&D in product development. Tracking resources is another key practice of PPM and includes what is available, what is being consumed, and what is needed. Practice-practice-practice for PPM is a final r Portfolio data:

C Availability O Types C Analysis r Decision-making:

O Decision points/gates C Decision criteria O Timing C Priority setting O Killing projects C Commitment of [email protected] levels rule of thumb to share, especially as the PPM system is first being put into place in a company. Continuous improvement requires a feedback loop for lessons learned.

A critical success factor for PPM is that organizational participation and commitment must be from top to bottom for all the processes. Senior management must be unequivocal in their support. Often, the PPM group reports into the senior management team to demonstrate this commitment. All levels (division heads, department heads, and staff) must buy-in to PPM, the benefits to the organization and to themselves, the processes, and the reports of progress, be they success or failure. An effective PPM group engages the whole organization in the processes, the decisions, and the planning from its inception through its conduct and in all its operations. Any methodology employed by PPM would need validation for credibility to the organization and insure outcomes are reasonable. Much data about the products, the science, and markets must be available for PPM to work. Key internal data would include each product profile (expected and ideal), all projects (e.g., studies in labs or clinics and at all stages, formulations, manufacturing, stability), timelines of all projects, status of all projects, budget available and being used, staffing (how many, who, when), costs for projects, equipment, and staffing, and systems available. External data also is highly important to assess the marketplace, such as competition (products, companies), target audiences, treatment opportunities, regulatory requirements, and sales projections. Data sources are extensive, need to be manifold, and are both internal and external to validate the information used in planning; for example, the company's study reports, the sales force, market research department and their studies and reports, medical affairs staff expertise, Internet, library and publications, trade journals, focus groups and advisory panels of customers, customer-based companies in key markets (group purchase organizations of institutions, or GPOs; managed care organizations, or MCOs), presentations at medical meetings, competitor materials, consulting organizations, financial companies, government reports (e.g., FDA, CMS, CDC, OIG, EMEA), trade associations, and individual industry experts. Timely access to targeted information when there is a need to know is vital to a successful operation. The analyses are extensively done for PPM, especially for projecting possible outcomes and assessing risks, two core components for PPM. This chapter will present the types and a variety of these analyses later.

Decision making is a core operational focus for the organization in implementing the strategy and the plans. Decision making gives us direction and outcomes for the company. PPM helps foster and improve (with corporate approval) the decision making process, guides the decision making, and measures success of the decisions. In making decisions, PPM assists with what are the decision points or gates at key milestones, use of consistent and appropriate decision criteria, the appropriate timing for work to be done and for decisions to be made, and the engagement from the organization to follow whatever the particular processes may be at their company. Priorities must be established for products within a portfolio and projects (including indications) within a product plan. The criteria, which we will discuss later, must be appropriate and complete for the decision at hand and consistently applied, in order to be credible, supportable, and useful. Go-no go decisions are always difficult because you must ultimately kill some projects (the hardest decision) that either are not successful at that point or that you do not have the resources to do it, or where the project is outside of the corporate strategy and plans. Some companies may let some projects linger consuming resources that could be utilized more effectively elsewhere. The decision-making process, the criteria, the players making decisions, and the decisions themselves must receive full support (buy-in) from all levels of the organization to be successful. The aforementioned BCG study of best practices also identified three performance categories (governance, organization, and process), and 15 specific practices within the three categories that are optimal PPM-type practices. Well developed PPM-related practices, as judged by the employees, were evident for 14 out of these 15 practices at best high science companies, much more often than the corporate averages in these medical technology businesses [8-10, 22, 41, 42, 44].

Participation in PPM involves the whole company at many levels for it to work properly and achieve corporate product development goals (Fig. 2.15). Sitting at the top of the pyramid for PPM players is senior management, either the whole executive committee, or a subset called the product development senior team, often composed of the chief operating officer (COO), chief financial officer (CFO), senior vice-president (VP) for R&D, senior VP sales and marketing (S&M), usually the head of development who often is the chief medical officer (CMO), senior VP manufacturing, sometimes the senior VP quality assurance and control, and even the chief executive officer (CEO) at some companies. Their role is twofold. They support PPM through the mandate given to coordinate and assess the product development process, and they make the decisions for product advancement or killing projects in a fair, consistent, and timely manner. The decisions are made at the decision points for milestone achievement, basically addressing the question, was the milestone achieved with sufficient scientific, marketing, and organizational information to proceed forward with least possible risk, and funded to complete the prospective work plans as presented by the teams? The portfolio planner oversees [monitors] the individual product and portfolio process leading to the decisions but also possesses evaluation roles; gauges progress versus timelines in the plans, coordinates assessments of risk, and estimates likelihood of success going forward. Risk assessment is a dynamic process especially with regard to optimizing resources (people and money). These evaluations become important additional decision criteria for teams and senior management. The product teams and team members are responsible to prepare the presentation of data, accomplishments, and outstanding issues to senior management.

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Project Management Made Easy

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