How IPMT Achieves Maximization of Resource Utilization

Original

In 1992, faced with intense market competition and severe financial difficulties leading to a sharp decline in profits, IBM took a pioneering step to regain its competitive edge. The company implemented the Integrated Product Development (IPD) system, focusing on streamlining processes and restructuring products to reduce time to market.

In this process, IPMT played a crucial role. So, what is IPMT? what are its responsibilities, and is it essential for every company to have an IPMT?

I. What is IPMT

IPMT, or Integrated Portfolio Management Team, serves as the product investment decision and review body within the IPD system. IPMT is not an actual department but a cross-functional virtual organization whose members are drawn from senior positions across various functional departments.

The term "Portfolio" originates from naval warfare, referring to the strategic combination of forces to secure victory and survival in adverse conditions. Applied to investments, Portfolio involves configuring sub-products to retain and increase value under extreme circumstances.

This narrative resembles the story of "Gerrymandering," where the IPMT effectively utilizes its resources to navigate the dynamic market, thereby gaining benefits.

II. Responsibilities of IPMT

IPMT aims to coordinate and integrate resources, progress, and risks of different projects to maximize the goals and benefits of the entire project portfolio. IPMT's role extends beyond initial product planning, encompassing the entire product development process, including project initiation, planning, implementation, development validation, and market launch. The core aspects of IPMT lie in the words "integration" and "portfolio."

1. Integration

• Integration of strategy and goals: IPMT closely aligns its work with the company's strategy and goals. Collaborating with top management, IPMT ensures the project portfolio aligns with the company's strategic direction, supporting the realization of company goals. IPMT considers strategic goals in project selection, priority management, and resource allocation to maximize contributions to the company's strategy.
  
  
• Cross-departmental collaboration and integration: IPMT facilitates collaboration and integration between different departments and stakeholders. As a cross-departmental team, they cooperate with business units and functional departments to ensure the smooth implementation of the project portfolio. Through effective communication and coordination, IPMT manages resource conflicts, decision-making, and risk management, promoting organizational synergy.

2. Portfolio

• From the customer's perspective: IPMT's strategy in product planning and investment portfolio is diverse, expanding market share by meeting the needs of different market segments. Taking the smartphone industry as an example, Huawei is a prime example, succeeding by developing and innovating in multiple market segments. The P series and Mate series focus on innovative technology and high-performance hardware to attract consumers seeking high-quality smartphones, while the Nova series and Honor series balance performance and design competitively in terms of price, appealing to a broader consumer base.
  
  
• From the product perspective: IPMT manages not only individual products but also various products from the past, present, and future, involving the entire process from product planning to product lifecycle management. For example, in the digital camera industry, Canon's leading position is closely related to its early and far-reaching product planning, while companies like Konica and Minolta missed opportunities. Konica and Minolta, after merging into Konica Minolta, were later acquired by Sony, and these once-giants completely disappeared from their once-glorious field.
  
  
• From the resource perspective: Resources include human resources, market information resources, production resources, financial resources, and more. The normal operation of the IPD system requires the coordination of various resources, not just research and development resources. After IPMT makes decisions, members from each department ensure the implementation of decisions from their departmental perspective, ensuring resource alignment and coordinated efforts. Mismatched resources can lead to waste and missed market opportunities.

For large companies with diverse industries and multiple product lines, in addition to the company-level IPMT, product-line-specific IPMTs may also be established to set goals for a specific product line based on the company's overall strategy, making product investment decisions and reviews.

In conclusion, the role of IPMT is more akin to an agency with financial leverage, ensuring that the money invested yields abundant returns.

III. Is IPMT Necessary for Every Company?

Every company has its version of "IPMT." In smaller companies, the IPMT director may be the owner, the sales committee may be led by the Sales VP, and the R&D committee may be led by the R&D VP, transforming individual decision-making into collective decision-making, establishing a clear rule process.

Once this process is established, when new businesses emerge as the company expands, the process can be directly copied and used. As the team gradually grows, the owner can delegate this work to others, allowing more time to focus on the company's strategy.

This is the significance of IPMT for every company. While IPMT may not exist in every company, a clear and standardized process needs to be established in each company.

IV. In Conclusion

Regardless of the project, proper control and oversight are needed. IPMT scrutinizes projects based on company strategy and product line requirements. For projects that fail to meet basic approval requirements, we should be willing to make cuts to free up resources for projects with the highest value, ensuring maximal resource utilization.

As a cross-functional department, IPMT goes beyond merely gathering departmental leaders for decision-making; it maximizes the coordination and integration of resources across different projects. This is the fundamental purpose of IPMT's existence.