Despite increasing cost pressure, MedTech is a most attractive segment of the medical device industry.
Whether a large multinational organization or a smaller emerging entity, medical device portfolio analysis is extremely important for all medical device companies. Many companies have a significant number of small lifecycle projects within their R&D pipelines. These products are designed to reach short-term sales targets. Such competing technologies can make portfolio modeling a complex task as these projects can be interdependent, especially when it comes to resource allocation. When “the urgent” dominates “the important“, breakthrough innovation with longer timelines, higher levels of risks and open-ended functionality often suffer from lack of staffing and resources. Some companies attempt to push forward both breakthrough and incremental innovations however can find they cannot invest sufficient time, money and other resources in each project. This leads to time pressure, delays and complexity costs. This happens due to the failure of the portfolio management function.
Medical device portfolio analysis supports decision-making for priority setting and resource allocation. Portfolio management is an administrative function that assembles and formats information from project teams. This fails in two crucial dimensions including creating transparency and supporting prioritization.
Project teams fill in templates to describe key characteristics of their projects. However, their assumptions regarding benefits, timeline, risks and potential ROI are insignificantly challenged. There is a lack of market research leading to forecasts manipulation. Senior management sets priorities based on gut feeling and personal preferences. The immediate needs influence company R&D management. The long-term projects with much larger value contribution suffer due to expanded focus on short-lived lifecycle extensions.
A medical device company requires a rigorous portfolio analysis approach to reduce delays, increasing cost and inefficient resource allocation for potential breakthrough innovation. Medical device portfolio management becomes complex due to different regulations, various standards of care, confusing patent, reimbursement mechanism and so on. This is where medical device portfolio analysis services by top medical device consulting firms support companies.
Portfolio management has both organizational and analytical dimensions. Both are equally important. Evaluating projects with stringent logic establishes realistic project claims and risks. This also establishes value potential. When there are many innovations in different development stages, a medical device portfolio analysis delivers quantitative comparison revealing the most promising technologies.
A medical device company requires a strong and independent portfolio management function to provide the authority and capability to challenge project teams on the proposed project strategies and underlying assumptions. Independent means submitting analytically-driven proposals challenging the senior management to make prioritization and resource allocation decisions based on facts versus personal preferences and expediency. Portfolio analysis helps in effectively dealing with the complexities regarding the timeliness, conflicting priorities and escalating cost. It also provides essential input for the company’s strategy development by providing a clear picture of its strengths and capabilities in the current and future competitive landscape.
Medical device portfolio analysis provides objective direction for prioritizing the most promising technologies that can deliver the greatest ROI.
