Whether you have a small or large business, you're making investments to develop new products or services to accomplish your goals and objectives. Learning to use the Strategy Scoring Matrix can help you determine where you should allocate your limited resources of time and money while generating the greatest return on your investments.
Overview of the Strategy Scoring Matrix
The Strategy Scoring Matrix is an easy-to-use tool for small or large businesses to score their projects and determine the value of investing limited resources. The process helps to manage those limited resources. The matrix discussed here focuses on six items and can be adapted to fit your business.
Strategic Fit
This item has to do with how aligned the project is to the overall goals of your small or large business. If what you are investing is only going to impact one goal, give yourself a score of 1. Two goals impacted receive a score of 5, and three or more impacted goals receive a score of 10.
Market Attractiveness
How attractive is the project or service you are getting ready to implement or roll out to the market? How many people are asking for it? It is subjective to fit your business. If it is a small number, the score is 1. If it is a very attractive offering or service that you have for your market, the score is 10.
Competitive Advantage
How do you know if your offering has a competitive advantage? How many products and services like yours are already out there? If there are four or more products or services that are already on the market, give yourself a score of 1. If only one or two are in competition, the score is 10. Very few companies or people are doing what you are getting ready to do, giving you a competitive advantage.
Technical Feasibility
Technical feasibility means having the resources in house or within the company that can deliver on the service. Is it necessary to outsource to deliver the product or service? If your company has no resources or obtaining them is not currently feasible, give yourself a score of 1. If you have some of the skills, your score is 5. If you have all the skills, the score is 10.
Financials
From a financial standpoint, the service or product you are getting ready to roll out or invest in is going to return an amount of money. If the return is small, the score is 1, a medium return scores 5, and a large return is given 10.
Risk
Any time a new product or service is rolled out, you are taking a risk. Even if it scores high on strategic fit, market attractiveness, technical feasibility and a large return, you still need to manage the risk. How risky is the product or service you are getting ready to invest in? High risk earns a low score of 1. For low risk, the highest score of 10 is earned.
Using the matrix takes all your projects through the process and allows you to see which projects are scoring the highest for your organization. In that way, you have a tool to access the viability and profitability of your projects. These are the things to look at when investing for growth to move your company forward.
