What is Opportunity Management

What is Opportunity Management

Opportunity Management

Opportunity Management is a part of Customer Relationship Management, which enables to control sales process. It is a collaborative approach for economic and business development. It also provides the basis for an analysis and optimization of an enterprise. It is the process that converts the chance to decisiveness and is increasingly becoming embedded in the culture of organisations as they mature and broaden their understanding of the value that managing uncertainty can bring.

Opportunity Management is a collaborative approach for economic and business development. The process focuses on tangible outcomes. Opportunity management may result in a more interesting, more motivating project that can increase teamwork and provide development opportunities valued by contributors. Its three components are

  • generating ideas,
  • recognizing opportunities, and
  • driving opportunities.

Risk

Risk management can be described as the process of proactively working with stakeholders to minimise the risks and maximise the opportunity associated with project decisions. In some circles the word risk has a pejorative connotation making people think negatively about threats from potential uncertain events. When people say that they must make a decision involving risk, they often mean that the decision involves the possibility of an adverse consequence. Good risk management does not have to be expensive or time consuming.

However, it is imperative that a firm has the ability to adapt to change. Risk is a pertinent event for which there is a textual description. Risk management ensures that an organization identifies and understands the risks to which it is exposed. Organisations continuously face environments in which uncertainty is constantly challenging the existing ways of doing business and the way that risk needs to be managed. However, the upside to risk, that is often overlooked, is that the feared uncertain event could have a desired outcome. TAP University’s blog notes that this is a positive risk or opportunity and needs to be managed to ensure a good result. Having a clear understanding of all risks allows an organization to measure and prioritize them and take the appropriate actions to reduce losses.

Where risk management seeks to understand what might go badly in a project, opportunity management looks for what might go better.

Opportunity Management is the process that converts the chance to decisiveness and is increasingly becoming embedded in the culture of organisations as they mature and broaden their understanding of the value that managing uncertainty can bring. For positive risk or opportunity management to be effective in creating or protecting value it must be an integral part of the management processes, be embedded in the culture and practices of the organisation, be tailored to the business process of the organisation, and comply with the risk management principles outlined in ISO 31000. An opportunity management process has required elements that need to be evaluated before advancing and allocating scarce resources to any project. All organisations have limited resources and it is important that they are used sensibly.

The first step that an organisation should take in order to improve decision making and reduce risk is identifying potential opportunities. It is advised that a business takes the necessary time and considers numerous ways of identifying opportunities for initiatives. Organisations could implement processes like “organizational catch ball” which would help them to develop plans and strategies for economic growth in the community. As Conti notes, “the interactive catch ball process from management level to the next is necessary for correct planning and alignment of goals”. They could also implement brainstorming activities, hold stakeholder meetings, hold focus group interviews and hold jurisdictional reviews. This would help the organisation generate ideas to include in the initiative funnel. The firm should proceed to evaluate and prioritize initiatives to enable more effective courses of action to be taken in the future. This would involve ranking criteria in order of importance to ensure the correct alignment of targets for the projects. It is vital that the firm includes many opportunities in the decision making funnel to be effective. This will allow for a more comprehensive scope of ideas to be included in the decision making funnel.

Funnel

An opportunity management funnel is a framework that allows management to evaluate and select opportunities. An opportunity management funnel is a process whereby many opportunities are put in up front and fewer investment decisions coming out at the end of the funnel. The goal of the opportunity management funnel is to eliminate weak ideas before they consume excessive resources while allowing strong ideas to filter through the process. The challenges for the business and project management team is to make choices and decisions that move toward the desired objectives – a task that is made difficult by change.

The funnel approach raises questions pertaining to:

Who will work to move the idea forward?

What assessment criteria should be set?

Who will decide whether the idea should be pursued or dropped?

How will the decision be made?

The funnel filters the broadest range of opportunities and ensures that all priority sectors are represented. The process must be unbiased and lead to a choice of resources that maximizes return. When selecting which opportunities to filter through the process, users should be aware that initially, there are no bad ideas or limits. The unviable alternatives will be filtered out using the phase–gate model. Rigorous screening must be applied to focus on the initiative. The business can examine the merit of each initiative before deciding to dedicate resources to the project. The business will have the option to implement three decisions at a gate such as advance, rework and kill the project. Perhaps the greatest challenge that users of stage and gate processes face is making the gates work well: as go the gate, so goes the process. This will help prevent the firm from wasting valuable resources and time on ineffective initiatives.

Stage-gate/phase–gate decision making

The stage-gate process was created because the traditional organisational structure is primarily for top-down, centralized control and communications, all of which are not practical for organizations that use project management and horizontal workflow. The stage-gate process evolved into life-cycle phases. Stages are phases of the decision-making process where development work is completed. Phase–gate systems divide the innovation process into a predetermined set of stages composed of a group of “prescribed, related, and often parallel activities.” Most Phase–gate systems involve four to seven stages. Since each proceeding stage is more expensive than the previous, it is imperative that a high degree of research-backed discrimination is involved in passing stages. The body of research collected for proposed initiatives should be frequently consulted to adequately support the decision-making processes.

A firm could use certain assessment criteria to help identify opportunities and will ensure resources are not wasted on low value opportunities. There are three types of criteria that a firm could use. These include criteria of inclusion, criteria of exclusion and portfolio level criteria. Using assessment criteria would provide a transparent process that will highlight what initiatives to abandon and which initiatives to pursue. Exclusion criteria could be used by the firm, as it saves time and money. It is a simple method of reducing the number of initiatives to evaluate. “A firm must maintain records to support why a portfolio was assigned to a specific composite, or was excluded from all composites.” The firm could also look at inclusive criteria to help to prioritize initiatives. This could include ensuring that it has key stakeholder support, or making the initiative economically feasible. Portfolio level criteria may also be used to ensure the right mixes of initiatives are used. Ensuring that the initiatives stimulate job creation and have the support of the community are some of the criteria that the firm could include while planning an initiative.

It is imperative that evaluation of each gate should be objective, open-minded, clear on the businesses’ strategic goals and done by experienced people. People that are evaluating the project at each gate must have the courage to terminate the project if necessary. This is important as it will prevent any bias from occurring throughout the decision making phase.

However, the system that the firm puts in place should not be so rigorous that it omits viable projects or too laid-back that resources are spread finely across multiple projects. “The lack of tough Go/Kill decision points means too many product failures, resources wasted on the wrong projects, and a lack of focus.” A level of uncertainty can be positive for evaluating criteria by the firm as too many kills of ideas may discourage stakeholders from forming ideas.

Project management

Project management is the planning, organizing and controlling of a firm’s resources to achieve reasonably short-term goals that have been established to complete specific targets and objectives. It is usually management driven and focuses on setting targets, problem solving and obtaining results. The purpose of project management is to act as a change agent, delivering a change to the status quo of a project, and achieving this in a controlled and managed way. In the initiation stage of project management, opportunity management may aid in the determination of the nature and scope of the project. Much like the initiation stage of project management, opportunity management aids in determining the nature and scope of projects. Since the initiation stage is crucial to the overall performance of the project management cycle, opportunity management may be used by project managers to determine which projects are worth pursuing. Project management is an attempt to manage uncertainty, since it is seen as a structured approach to produce managed change in a changing environment.

Most notably, opportunity management may aid in defining the business needs/requirements of the organization through the filtration of various alternatives and budgeting requirements. In the process of planning, projects should be properly defined and divided into logical, progressive steps. The screening and assessment criteria offered by opportunity management allow project managers to establish the business case for the project. Opportunity management determines which projects are worth pursuing before dedicating excessive resources. As the project progresses from the initiation stage to the planning and design phase, the screening and assessment criteria will act as a continuous gauge to determine the viability of the project. This ongoing determination of the viability of the project also aids in portfolio management since project managers employ opportunity management to determine which projects are worth pursuing and the prioritization of projects. Furthermore, project managers should be able to identify and engage the appropriate stakeholders throughout the entire project life cycle and determine who must be involved in each phase and who merely needs to be kept informed of the progress made.

Opportunity management determines the payback of the project within the initiation stage. Although the payback period is defined by Kerzner as the least precise of all capital budgeting methods because the calculations are in dollars and cannot adjusted for the time value of money. By establishing the payback period within the opportunity management process, project managers may continually assess the project expenditures and re-evaluate the payback period on an ongoing basis.

Project management is the planning, delegating, monitoring and controlling of all aspects of the project, and the motivation of those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope benefits and risks. The monitoring and control phase of project management mirrors fairly closely stage gate decision making, although stage gate decision making addresses potential problems earlier in the project management cycle. Like the monitoring and control phase, the logic model employed in opportunity management observes and monitors the project performance on an ongoing basis. The logic model helps a firm to outline the sequence of events related to the project. In a nutshell, a logic model is a valuable tool that produces a basic program “picture” that shows how the organisation’s program is intended to do work. If the project is determined to be unable to meet the criteria outlined in the opportunity management process, the project or opportunity managers will take measures to correct the problems and put the project back on track.

Community capacity building

Capacity building is designed to promote change. Capacity building may be defined as anything that increases the ability and/or desire of groups, businesses, municipalities, not-for-profit organizations to effectively engage in community economic development. Stakeholders such as Governments can contribute to environmental community capacity building not only through the provision of practical support in terms of resource provision and throughout the opening up of information and communication channels for communities, but also ensuring that there is meaningful collaboration with communities.

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