Towards data-driven decision-making in product portfolio management – from company-level to product-level analysis

Thesis event information

Date and time of the thesis defence

Place of the thesis defence

Linnanmaa, auditorium L6

Topic of the dissertation

Towards data-driven decision-making in product portfolio management – from company-level to product-level analysis

Doctoral candidate

Master of Science Hannu Hannila

Faculty and unit

University of Oulu Graduate School, Faculty of Technology, Industrial Engineering and Management

Subject of study

Industrial Engineering and Management

Opponent

Professor Tomi Dahlberg, University of Turku

Custos

Professor Harri Haapasalo, University of Oulu

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Towards data-driven decision-making in product portfolio management – from company-level to product-level analysis

Successful products and services lay the foundation for the company's success. The product decisions made today will be realized within a few years, and wrong decisions can have very serious financial consequences.

Twenty per cent of company products typically account for some eighty per cent of the company’s sales volume. Nevertheless, the product portfolio decisions – how to strategically renew the company's product offering – tend to involve emotions and intuitions while facts, numbers, and quantitative analyses are missing.

Profitability is currently measured and reported at a company level, and firms seem unable to measure product-level profitability in a constant way. This prevents companies from maintaining and renewing their product portfolio in a strategically and commercially balanced manner. Shortcomings in the way businesses operate are significant and can affect their competitiveness if no action is taken.

This study explores how to transform from emotion-based decision-making to data-driven decision-making based on business-critical data across different information systems. The main result of the study is a data-driven product portfolio management concept that identifies and visualizes in real-time and fact-based which products of a company are concurrently strategic and profitable and what is the share of them in the product portfolio.

The dissertation is a qualitative study that combines a literature review and interviews in eight international companies in a different size, from a few million to a few billion in terms of company turnover.

This study indicates the need to combine and govern data embedded in a company's various information systems across the business IT systems to unlock its full potential. Data is not an IT asset; it must be governed separately from the corporate IT technology and a level beyond it. The role of IT technology is to be an enabler in the background. Beyond data and technology, companies need to adopt a data-driven enterprise culture that relies on data as a raw material for decision-making.
Last updated: 28.11.2019