“If
you can explain success, then you can predict success” (Cooper et al., 2001, p. 47).
A number of criteria are widely used by
companies to forecast the profitability / revenues of a candidate project.
Net Present Value (NPV), discounted Payback
period, Internal Rate of Return (IRR), Expected Commercial Value (ECV) are most
popular.
Such metrics are useful in 2 distinct
processes:
- Product Go/Kill decisions or gate decisions (intermediary steps in the New Product Development process)
- Portfolio Reviews
