Definition
Increment revenue for future product road maps is calculated using the fifth year increment less the jump point (JOP) increment.
In detail
Incremental Pipeline Value (IPV) is a metric that measures the financial potential of the future product roadmap, calculated as the expected incremental revenue in year 5 minus the incremental revenue at the Jump-Off Point (JOP). It is used to evaluate the long-term growth contribution of the new product portfolio, helping management prioritize investment decisions. Unlike short-term financial metrics, IPV focuses on the incremental over the next five years and should be used in conjunction with strategic planning. The output is the IPV value for each product line, used for portfolio management.
Example in practice
When planning future product roadmaps, a company estimated the fifth-year incremental revenue for each project and compared it to the current baseline (JOP). By calculating IPV, they found that Project A's IPV was much higher than Project B's, even though Project B offered faster short-term returns. Management adjusted resource allocation to prioritize Project A to ensure long-term growth goals. IPV provided a quantitative basis for strategic decisions.