Top-Down vs. Bottom-Up Resource Planning: Which is Better?

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In an exclusive, Keith Duncan, Sopheon’s Director of Business Consulting, shares his well-seasoned perspective on the importance of resource planning as an integral part of the new product development process.

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Top-Down vs. Bottom-Up Resource Planning: Which is Better?

  1. 1. Top-Down vs. Bottom-Up Resource Planning: Which Is Better?In an exclusive, Keith Duncan, Sopheon’s Director of Business Consulting, shares his well-seasoned perspective on theimportance of resource planning as an integral part of the new product development process.In order to optimize the return on investment from new products, an organization must excel at managing its productportfolio(s). This requires good visibility into the value, risk, expense and resource requirements of individual projects.Unless resource planning is fully integrated into new product development processes, such visibility is limited and, byextension, the effective use of resources is negatively impacted. It’s almost like driving at night with your headlampsoff; you can’t see far enough ahead to know where you might run into serious problems.In the area of resource-planning best practices, there has been considerable debate about whether top-down or bottom-up planning is “better.” Support can be found for both approaches. However, Sopheon’s experience suggests that fororganizations aiming to align limited resources with the most lucrative new product opportunities, a top-down approachprovides the best balance of benefit to effort.The top-down approach to resource planning uses rough-order-of-magnitude sizing with very little detail to estimateresource needs. The bottom-up approach uses project planning techniques to create task-based estimates.Unlike bottom-up resource planning that requires a detailed project plan and supporting project-management software,top-down resource planning can be implemented early in the project cycle using simple tools. The visibility providedby the top-down approach is more than adequate to support the level of portfolio planning required to maximize returnsfrom the investment of R&D and other resources.Recently, I wrote a white paper which examines the differences between top-down and bottom-up planning, includingthe cost/benefit trade-offs. It also shows how - by integrating long-term resource planning with a standardized newproduct development process - you can do a better job of project prioritization and scheduling, improve product qualityand shorten time-to-market. I invite you to download the entire paper from Sopheon’s website.Author: Keith DuncanKeith Duncan is director of business consulting and leads Sopheon’s Advisory Consulting Services. Keith has over 20years of experience in the software and consulting fields. A Lean Six Sigma Black Belt and certified as a New ProductDevelopment Professional, Keith is an expert in developing stage and gate, ideation, portfolio management andresources planning processes.

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