3-1 Final Project Milestone One: Project Charter (SNHU QSO-680)

Module 1-2: Case Study Overview

Objectives

This case study supplies an overview of the objectives and intended outputs of portfolio management and the reasons many firms utilize this approach in order to achieve their intended initiatives.

Specifically, regarding research and development firms, they craft their strategic plans in order to align to the firm’s overall target operating model, as well as the company’s overall mission; they are typically broken down into projects which are compiled into the main portfolio. In pharmaceutical firms, these goals typically include:

· Lowering drug expenses for the targeted client base

· Identifying opportunities in a given market to fill “gaps” where there is demand, but not supply (i.e.: new products, services, etc.)

· Increasing production in terms of efficiency, process improvement and upgrade research approaches.

In this case study specifically, the main goal is the first: lower costs. Therefore, the portfolio will ultimately be set up to achieve this intended objective. The other objectives will fall underneath as a sort of “umbrella.” That being the case, only projects which support this effort will be included in the firm’s portfolio, (Bode-Greuel, 2008).

Target Stakeholder Group

In this particular instance, the stakeholders would include the company’s client base. As the R&D firm’s main intent is to perform effectual research to develop new drugs which would support efforts to lower the firm’s overall drug costs, it stands to reason those purchasing the products and benefiting from the updated pricing would be the primary stakeholder group, (Bode-Greuel, 2008).

However, alongside the primary stakeholders will typically be other, indirect stakeholders. In this case study, examples would include partner companies who sell these products on behalf of the main company, and perhaps any adjoining supplier chain entities, as these companies would be also paying their own business costs and in that same vein, health insurance firms who cover all or part of the customer’s drug expenses would have a vested interest in this cost-reduction effort.

Taking this back to portfolio management, it would prove beneficial to these varying stakeholder groups as it will initiate an effort (or series of efforts), which will drive the pharmaceutical company’s investment in developing more price-friendly drugs. This portfolio of projects will all drive this output, but they won’t be approved by the sponsors until they demonstrate alignment to the corporate group’s overarching strategic goals.

The process which governs portfolio management will cover comprehension of diseases which will have many sub-segments. These would address overall disease comprehension and research, patient medical needs regarding the said disease, as well as other factors (like short vs long-term care) which will empower the firm to make an informed choice to invest in this venture or not, (2008).

In order to efficiently oversee a portfolio, the PM must closely monitor it through all phases of the lifecycle: initiation and planning to execution. Portfolios managed in a proficient manner will help secure the desired outputs, stay within scope and budget, within timetables set by leaders and obtain the ROI (return on investment) that is sought after by both internal and external stakeholders, as well as indirect stakeholders too.

These goals can be attained via any number of venues. They may include refining the process to be more efficient when creating new drugs. Also, upping productivity with the overall drug development process; focusing effort into crafting more streamlined research methods for new drugs and potential areas of interest which would benefit the firm’s operating model in multiple spaces, then highlight the ones that appear most promising. Key decision-makers and sponsors can leverage this information to call out the projects which appear to hold the most promise in terms of value, (2008).

Project, Portfolio & Program Levels

When a firm is rolling out a strategic initiative, it is typically broken down into three levels: project management, which are compiled into a program. The Programs in question are aligned to a Portfolio. Managers maintain direction and oversight at each level: project, portfolio, and program.

Project management is the leadership governance of a time-limited effort which includes a designated start and end period, along with a defined deliverable, which is a new product/service/etc. Well-vetted projects include a clearly defined output, including adequate descriptive details; also, there will usually be cross-functional leveraging and interdisciplinary partnerships (subject-matter-experts/SME’s). The project will have a defined schedule/timetable with an assumed consistent unrolling, a financial budget with constraints and a “safe margin” for unexpected costs. Finally, there will be a designated team, reserved tools, resources, and other assets, as well as leadership governance and reporting/fiscal updating expectations. Each project will include the in proposal how it aligns to the firm’s corporate approach.

Projects are grouped into Programs. Like projects, there are managers, but as each project is aligned to a similar Program, the program manager will have an oversight of several complimentary projects in-flight at one time. Using this approach helps to optimize the beneficial outputs of each project that may not be so assured if each were executed alone.

Lastly, Programs are compiled into Portfolios.

Corporate Strategy Alignment

The drive acting as an undercurrent for these projects (and the full portfolio) is adding value. The corporate strategy the firm has adopted is to lower costs, increase efficiency and streamline the process to lower overall company expenses whilst increasing production processes. The methodology selected to choose which projects will be compiled into the portfolio will also be utilized by the project teams to ensure continued alignment with the firm’s strategy and intended goals, also while remaining aligned to the expectations set forth by internal and external stakeholders.

Project Manager’s Role

For the PM, their role is to facilitate the project selection process, to ensure value is present in each project chosen, and that it demonstrates corporate alignment. Also, the PM will drive the project(s) in their lifecycle, ensuring continued alignment, adherence to budgets, forecasts, and other obligatory components to ensure a successful execution and close. The PM will also, in that same vein, continue to select and monitor the prioritization of each project and calibrate with leaders on any change management issues which arise on a given project. The PM will ensure the deliverables are crafted and the project closed in a compliant manner; also, that the outputs are still aligned to the R&D plan and operationalized (as needed), to meet the firm’s other overarching goals.

References

Bode-Greuel, K. M., Nichisch, K. J. (2008). Value-Driven Project in Portfolio Management in the

Pharmaceutical Industry: Drug Discovery Vs. Drug Development- Commonalities and

Differences in Portfolio Management Practice. Journal Of Commercial

Biotechnology, 14 (4), pp. 307-325. Retrieved from: Value-driven project and portfolio management in the pharmaceutical industry: Drug discovery versus drug development - Commonalities and differences in portfolio management practice - ProQuest

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