Doing more with less
project management for product development in a healthcare setting
“Time is the scarcest resource and unless it is managed nothing else can be managed” (Peter F Drucker). Ideas are in abundance, what is scarce is a swifter, less disruptive, and economical way to bring it to fruition. This paper will provide a high level overview of the product development cycle as practiced by one of America's most reputable healthcare companies with project management deliverables interspersed within the product life cycle. The goal is a simpler, easily executable, and outcome driven process that is lean, manageable, and expeditiously delivers on the needs of the customer. This paper will also address how sponsors/decision makers become an integral part of product development process. Knowledge sharing, quality control, and risk mitigation are built into the product cycle. One of the key guiding principles is leveraging work done on other initiatives and applying the lessons learned. The objective is for this cross functional and end to end process to be used repeatedly and successfully in bringing products to market. The collaborative effort will envisage sponsor engagement, develop strategic partnerships, assign roles and responsibilities, and develop capabilities to make seamless transition from concept to implementation.
In the next decade, healthcare in the United States will be characterized by customized, fully integrated, seamless, and secure continuum of care at an affordable cost. Customization will occur at different levels starting from choosing healthcare plans, designing how care will be delivered and creating the communication tools between the provider and the patient. Fully integrated systems will provide the necessary support and tools while seamless and secure care will be made possible through streamlined operational processes facilitated by integrated systems. The end result is a consumer centric model to deliver healthcare.
The rising cost of health care is one of the greatest financial challenges facing health care industry in the United States. Consumers as well as employers are actively seeking additional options to keep their healthcare costs affordable and manageable. This means new and innovative products for consumers tailored to meet their demands – a practice vividly lacking in an industry constrained by privacy laws and government regulations. These new products should not only be flexible in their offering but be strongly supported by cost effective systems infrastructure that can enable the product to be seamless and scalable. Healthcare, as a result, will transition into a consumer friendly industry.
So what does this mean for operations managers and executives? Product implementation will be governed by principles of “speed to market” and “doing it right the first time”. Competition will be intense and healthcare companies will be bargaining margins for market share. Employers will have a bigger stake and role in the design of healthcare plans for their employees translating to building “state of the art” reporting needs and integrated systems that talk to one another. Healthcare leaders are realizing the value of project management in building the discipline and framework to introduce these new products on time at a market competitive rate within the constraints imposed by regulatory agencies.
The product development cycle came into existence through months of collaboration between cross functional areas impacted by the product development process. The purpose was to work together as an organization to conceptualize, develop, test, and manage products with the goal of consistently improving upon the speed with which products are introduced in the market. As with any major initiative especially involving cross functional teams it was imperative to develop a set of guiding principles that would govern the development of this product development process. Enumerated below are guiding principles governing this work:
- The process needs to incorporate customer inspired design so that as the product is implemented developed and launched, it remains focussed on customer needs.
- The process needs to accommodate the ability to leverage work done on other initiatives thereby reducing cycle time
- The process should have the ability to integrate with existing systems and methodologies
- The process should be measurable and reportable so that its value can be fully realized
- Incorporate sponsor engagement at every stage of the product development process
The Product Development & Management Process
There are five building blocks that must be deployed together to create “project excellence”. Project Excellence occurs when functional areas are aligned for effective cross-functional project execution from concept to market. The five building blocks are:
- A structured development process across each phase of the product development and management process
- Small, core product development teams with cross-functional representation for an entire project
- Effective sponsorship and clearly designed decision makers as well as Product Steering Committees that will oversee phase-gate reviews and ensure that one phase is completed before the next one begins
- Standardized criteria that are used to prepare for phase-gate reviews that move the project from one phase to the next.
- Products designed to meet the needs of customers
Exhibit 1, shown below, illustrates the critical elements of this process
Exhibit 1: Building Blocks of the Product Development & Management Process (PRTM)
Integrated Project Management Principles & Processes
The Product Development & Management Process integrates core project management principles and processes. According the Project Management Institute (PMI®), project management processes can be organized into five groups of one or more processes, initiating, planning, executing, controlling, and closing processes (PMI, 2000, p.30). The product development and management process incorporates principles similar to generally accepted project management values as shown in Exhibit 2. This facilitates the integration and indoctrination of project management within the framework of the product development processes. As a result, it virtually eliminates the need for an overarching project management process. However, there may be a need for more robust list of deliverables mapped to each phase which can be easily incorporated.
Exhibit 2: Comparing the Product Development Process to Generally Accepted Project Management Principles (PMI, 2000, p 30)
As a result of a single business solution, optimization of the product development process becomes easier. Product development process can now be used to generate detailed project plans facilitating alignment between process and project management tools, tasks, knowledge sharing, and data so that projects can be managed efficiently across several functional areas.
In US healthcare, the product development cycle can often get murky when dealing with requirements surrounding state and federal regulations, patient privacy laws, and administration policies. It is easy to get caught up in regulations and policies that critical deliverables surrounding the business viability of new products are often ignored. As a result, it is very important that the product development cycle is structured with periodic assessment of deliverables. The Product Development Management process is outcome oriented with key deliverables due in every phase of work. The deliverables are assessed by sponsors as part of the stage gate criteria. This includes deliverables that evolve over time with % of error reducing as the process moves ahead. It also permits continuous evaluation of key metrics and drivers. Product strategy decisions become more transparent as they are seen in light of prevailing business conditions compared to looking at it independently. Rationalization of the product portfolio can now be done as part of the product development cycle as opposed to an independent exercise. Exhibit 3 below illustrates a sample list of deliverables for each phase of the product development cycle.
Exhibit 3: Key deliverables by each stage of the Product Development Cycle
Leveraging what exists
Efforts related to product enhancements can often leverage on the work done during introduction of the original product or similar products. This significantly reduces cycle time while continuing to build in customer inspired design. Within healthcare, it is common to see the same cross functional team(s) involved in much of the upstream work across different product lines. This product development cycle provides the opportunity to standardize processes within the functional area to enable quicker transition through each phase. This also reduces redundancy in deliverables within each process group. For example, there could be one business case as compared to one developed by IT and another by the business side. Product requirement documentation can incorporate the technical as well as business parameters. This is only possible since this model was designed by cross functional teams. There is opportunity to have one PMO (Project Management Office) having oversight on the project compared to two or more. Common vocabulary, terms, and jargons breed familiarity potentially translating into quicker throughput.
Resource optimization is also a potentially lucrative outcome of implementing this product development cycle. Due to its streamlined model, it tries to eliminate redundant activities and directs resources towards the most beneficial opportunities. As a result, teams tend to be smaller in number, leaner, agile, and more empowered to make critical decisions. This could positively influence the cost factor of introducing products in the market.
Integrating Sponsor Engagement
Sponsor time and engagement is one of the most significant areas of concern in successfully executing projects. Too little or too much involvement can prove to be counter-productive for the project. Decision makers need to be involved at the crucial stages of the work. The goal is to have the sponsors group provide clear decision making authority that results in specific direction to portfolio management activities and product development projects. By having this engagement in every phase of the cycle, sponsors get to evaluate the work against the go/no go phase gate criteria. In the event of inconsistencies, the sponsors have the option to redirect resources, invoke contingencies or all together suspend further work. With this evaluation in every process group, the product cycle does not proceed further than it needs to. Rationale for product decisions is in alignment with business strategy which facilitates consistent communication through the organization and re-enforces trust in leadership. From the sponsor's end, they are assured of resources being directed towards the most value generating projects identified by product portfolio prioritization process.
Client Inspired Design
What should matter is what really matters to the customers. Difference between a great product and an ordinary one is to put it simply and perhaps bluntly – customer reaction. Regardless of effort, benefits, complexity, options, and sometimes even price, the biggest indicator of a product's success is market acceptability. It is well served to have a product development process build in customer feedback through the product design process. Being consistently successful comes from value generating advancement stimulated by disciplined incorporation of customer feedback. The voice of the customer needs to be heard and disseminated through the organization in the form of customer inspired design of systems and processes. This includes one of the organization's most important clients, internal customers- employees. Listening to customers leads to learning which sets the stage for innovation. Breeding creativity starts with building effective listening systems wherein the organization is not hesitant to try new and innovative ways to meet the needs of the customer.
Exhibit 4: Customer Engagement within the Product Development Cycle
The upstream process involves understanding and then developing the concept to meet customer requirements. A critical step in this work is validating those requirements prior to engaging in the design process. This facilitates somewhat of a finalized solution prior to the design process. Minor modifications in design (often called refinement of the solution) are incorporated as part of the design phase. Thereafter it is the dissemination of product design to brokers, consultants and customers. Indicated above is Exhibit 4 that illustrates the level of customer involvement as part of the product development cycle.
Roadmap to Product Evolution
Today's competitive healthcare market demands products that are consistently high performing. Implicit in this exigency are certain features that can only be termed non-negotiable for an organization to remain competitive:
- Processes that are controlled, standardized, and devoid of variability (in cost, quality and timing)
- Scalable and limitless in performance
- Availability of “real time” data
- Seamless and transparent
- Zero downtime
As part of an industry fundamentally shifting at its core, the framework for high performance can only be achieved by a process that is systematic, sustaining, and self –evolving. Disciplined application of this process will yield products that are consistently outstanding.
The scope of this paper limits the opportunity to take a deeper dive into the product evolution value stream. Illustrated in Exhibit 5 below are some key elements of the product evolution roadmap.
Exhibit 5: Roadmap of Product Evolution Cycle
With limited resources dedicated to new product development efforts, organizations with systematic product development processes have a heads up over competitors that use a random and disorganized process. The distribution and acuity of new product ideas within the portfolio is constantly changing aided and abetted mainly by the demand for affordability and partially by the introduction of new technology. As a result it is important to have an organized structure to monitor the funnelling of products in the market. Phase gate criteria within each stage of the product development cycle helps provide the governance and the necessary checks and balances towards a successful product introduction.
Inevitably, most new product development efforts within healthcare involve cross functional teams as several aspects of a product's performance are influenced by multiple functional areas. It is also important to empower members of the cross functional team to take critical decisions. The most optimal solution can only emerge when involving the right mix of functional areas organized into a value added role. The cross functional team participates in the solution development process initiated by the design of the technical and administrative operating model, defining detailed business requirements and articulating inherent system capabilities. The process of business stabilization involves the optimization and refinement of the solution based on customer input, facilitates the transformation of manual to automated solution if needed and finalizes the business value proposition of engaging in the new product development exercise. Thereafter the team engages in business process improvement efforts in the transition from the “as is” to the “to be” solution. Performance reporting in the form of balanced scorecards and executive dashboards become part of the continued administration of the product.
The roadmap so far merely provides a structural framework and a disciplined approach towards introducing the product in the market. However what truly facilitates the timely launch of the product is effective partnership. While customers and suppliers are an integral part of this process, in healthcare the role of physicians and labor management (if applicable) are equally important. Policies, procedures and communication should be powerful, directed and engaging. Through effective partnership between the stakeholders built in from the early stages through launch, timely execution of the project can be ensured. Partnerships provide stake in an organization's success and compels each constituent – customer, supplier, employees, and physicians - to consider and continuously evaluate how they can better fit into the larger business process. What may work today may not be good enough for tomorrow and it helps when several constituents are engaged in a collaborative process to stay ahead of the competition.
Maximizing performance of a product is a tricky proposition. In today's competitive healthcare market it is important to strike a balance between business strategy alignment (as it relates to product development) and level of autonomy in product design. Design creativity dispersed in the continuum of a structured framework will likely bring us closer to optimal performance. Business conditions over the years have demanded the need for standardization of optimal performance characteristics. Making success repeatable and consistent is what businesses have been striving for over decades. However, business situations are dynamic and so should be the value chain as part of product transformation efforts.
The active ingredient in a product development process should be its flexibility and ability to expeditiously bring the product to market. Implicit in the design should also be the ability to re-define product scope, design features, and redirecting resources if needed. The transformation from value limiting opportunities to engaging in value generating propositions should be seamless, accelerated, and dynamic.
Regardless of industry, an average client today has more product choices. Along with price and quality, the timing of product introduction influences the customer's choice. Delays in bringing a product to market often result in the organization having to offer richer benefits and/or lower price usually at a significant cost to the organization. “Doing more with less” is about maximizing performance and opportunities in an era of controlled and directed resource utilization thereby creating value and eliminating waste.
Drucker, P.F Thinkexist.com, Retrieved on December 2, 2005 from http://en.thinkexist.com/quotation/time_is_the_scarcest_resource_and_unless_it_is/218404.html
Kaiser Permanente National Product Development & Management Process Retrieved on December 2, 2005 from Kaiser Permanente National intranet sources: HPI.org
Project Management Institute. (2000) A guide to the project management body of knowledge (PMBOK®Guide) (2000 ed.). Newtown Square, PA: Project Management Institute
PRTM Management Consultants http://www.prtm.com/pace/stages_of_progress.asp
© 2005, Arindam Basu
Originally published as part of 2006 PMI Asia Pacific Global Congress Proceedings, Bangkok, Thailand