Cooper, Edgett, Kleinschmidt 1999 introduced the top 4 reasons of why PPT is important. These are:
- Competitive position, because portfolio management and project selection are crucial for mantaining business’s competitive position. New product and technology choices that management makes today determine what the business will look like in the future. An estimated 32% of firms’ sales today come from new products introduced within the last 5 years .
- Efficient resource allocation, because resources such as people, time, and money arescarce, and is crucial for the business to manage them properly and on the right projects. The allocation of scarce and vital R&D, engineering, marketing, and operations resources is of vital importance for the success of both the rpoject and the company..
- Strategic, because project selection is closely linked to the business’s strategy. It is one route by which senior management operationalizes their business’s strategy—the types of products, markets, and technologies management has chosen to attack, and the relative emphasis on each.
- Focus, because the business wants to be focused not do too many projects because of the scarcity of resources. An error here for example is that companies are trying to do too many projects for the limited resources available and this results in longer cycle times, poor quality of execution, and underperforming new products.
