Powering Next Gen Innovation
Maureen Carlson
Originally published: 2012 (PDMA Visions Magazine • Issue 3, 2012 • Vol 36 • No 3)
Read time: 10 minutes
The 3rd Product Portfolio Management Benchmark Study reveals product companies’ biggest pains and risks in driving innovation.
The pace of industry is quickening: New technologies and breakthroughs are begetting innovations at a rapid clip. Is a chain reaction about to usher in a new era of technology synchronization, efficiency and communication?
Perhaps it is already underway and we are so close to it that we take it for granted—the spring of our new sports shoe, the deep-cleaning nature of a vacuum cleaner, the ease of downloading and sharing photos, and the transformation of phones into powerful computing devices.
Standing at a manual printing press, it would have been hard to imagine that within 100 years, information would have no physical tethers and would become readily and instantly available to billions. Could we be at the precipice of a similar, unimaginable turning point now?
Industries of all kinds have made incredible advancements within a matter of years. Innovation moves, it seems, in tandem with the resources and tools of the day— from the mechanics and labor of the Industrial The pace of industry is quickening: New technologies and breakthroughs are begetting innovations at a rapid clip. Is a chain reaction about to usher in a new era of technology synchronization, efficiency and communication? Revolution through to the connected world of the Internet.
The processes that move the development of new products are intrinsic to the innovation itself. Henry Ford needed the modern assembly line to bring automobiles to every household, just as Twitter needed the Internet.
While reviewing today’s trends in innovation, it is clear that corporations want to continue to expand their investment in their product pipelines coming out of the steep dip of recent years. Nearly threequarters of those surveyed in Gartner Inc.’s CEO Survey 2012: CEOs’ Views on Innovation Management plan on maintaining or increasing their investments in innovation (Fenn & Raskino, 2012).1
The findings of the 3rd Product Portfolio Management Benchmark Study, which gathered input from 320 product development leaders from around the world and across multiple industries, provides ample evidence to also suggest—while innovation is a priority—that resources are being stretched and overutilized.
After a time where many industries felt the sting of recession, companies want to innovate and improve on their product portfolios as efficiently as possible. How can these companies work smarter and harder to bring forth the next generation of products within a constrained set of resources?
The Pains
Resource management, and the lack of transparency into it, is impacting the product development process and making innovation more difficult. For the third time and by a greater percentage than ever before, the top pain point for product portfolio managers are too many projects for resources, cited by 68 percent, according to the study (see Figure 1)2 .
What’s more, not only do product managers feel resources are squeezed, 74 percent also state their organization is not good at forecasting resource capacity. The report reveals effective resource capacity planning is plaguing the clear majority of companies.
The next most significant pain points, tied for second with 53 percent of responses, are as follows: not being able to drive innovation fast enough and decisions that go back and forth and get made late or ineffectively. The majority of product companies are very concerned about moving the right products from conception to the marketplace.
Ultimately, companies seek to beat the competition, take advantage of a trend or meet an important launch opportunity. The fear of not innovating fast enough is further compounded by a lack of clarity on how much it costs to delay a product launch, as the survey finds that 55 percent of companies are not able to measure it.
Connected to this is the pain point related to decision making. With compressed resources, deciphering where to focus priorities is of paramount importance. Unfortunately, more than half of the product executives surveyed face an arduous process in making critical project and pipeline decisions.
Taken together, the pain points reveal product companies struggling to attain and have visibility into accurate data and consistent metrics needed to prioritize projects, execute based on current resources and allocate resources to get winning products to market at the right time.
These pains reveal a breakdown in the system of product development. With complex and multifaceted product pursuits, companies are challenged to have ready insight into the pipeline performance and resource utilization using status quo product portfolio management tools and processes. With increasing numbers of companies reporting the same pain, the breakdown is growing, as efficient and strategic innovation remains a top priority coming out of the economic doldrums of previous years.
The Technology
Is there a way to more fully automate and manage the product innovation and development process? Fifty-six percent of respondents report they are looking to invest in a Product Portfolio Management (PPM) solution—a staggering 100 percent increase from 2010 (see Figure 2).3
Why are companies turning to PPM and other tools for intelligent innovation? The pain points describe the challenge of managing their resources, investment and decision making in a climate where advancement of products and innovation has become an increasingly competitive differentiator for leading companies. For decades, product companies predominantly have leveraged cumbersome spreadsheets and basic desktop tools to manage key facets of their product pipeline. The study findings indicate that companies now recognize that the information and data gathered through these mistake-prone, single-dimension formats are far from adequate to garner the insights they need.
The survey respondents indicated that the top three processes under evaluation for purpose-built technology solutions in the next six months are:
- 42 percent of companies are evaluating automated PPM Systems;
- 39 percent of companies are evaluating ideation or innovation management; and
- 39 percent of companies are evaluating Stage-Gate® or gated processes. PPM and other technology solutions for managing innovation have gained momentum and significant adoption in recent years, as leading companies seek to implement processes that can keep pace with the growing complexity of their product portfolios.
PPM and other technology solutions for managing innovation have gained momentum and significant adoption in recent years, as leading companies seek to implement processes that can keep pace with the growing complexity of their product portfolios. PPM has risen in popularity for its ability to provide product executives a holistic approach to managing product portfolios—from ideation through commercialization and ongoing product management.
Ideation and innovation management tools have increased in popularity because they allow leading companies to capture innovative ideas coming from a variety of sources in a formal process, helping product developers cultivate a list of ideas and concepts to evaluate. These tools also help capture and integrate the ever-critical voice of the customer for new products and enhancements. Adopting the Stage-Gate® and other gated processes is increasing as well, to further advance meeting time-to-market goals and balance resources in a dynamic environment.
Based on current usage of these solutions and plans to implement them in coming months, a majority of product development companies are on track to invest in PPM, ideation management and process automation solutions soon. If projections hold true, this represents a seismic shift in the processes and information that shape the product development landscape. The business of innovation is rapidly adopting a new generation of tools to accomplish its mission.
" While reviewing today’s trends in innovation, it is clear that corporations want to continue to expand their investment in their product pipelines coming out of the steep dip of recent years."
Next Generation Innovation
Jumping ahead to coming years, one can envision how companies will capture and analyze all potentials and ideas for products—seamlessly integrating customer preferences and adapting rapidly. Companies will have the ability to see all their resources in great detail and decipher priorities based on accurate data. Decisions will be made and debated based on metrics and information. Forecasts and missed launch dates will have more tangible figures. And strategic innovation and a competitive must-have may become the new mantra as adoption increases.
The very process of product pipeline decision making is poised to be more structured as meaningful insights help guide companies in determining what they need in terms of resources to bring products across the finish line. The pain points of the past, the result of increasingly complex and disconnected information, can now be significantly addressed through technologies designed to streamline the process.
Conclusion
For the past several years, product developers have recognized that their key pain points are inhibitors to innovation. Product leaders are recognizing that the way they manage key facets of their product pipeline is no longer acceptable. Effective innovation requires companies to leverage present-day technologies that enable visibility into projects and products to make better, more informed decisions to open the door to next generation innovation.
About the Author
Maureen Carlson is a partner at Appleseed Partners, a strategic consulting and market research firm. Maureen has worked in product marketing, enterprise software and research for nearly 20 years and has conducted market research on product portfolio management since 2009
Reference
1Fenn, Jackie, and Mark Raskino. “CEO Study 2012: CEO’s Views on Innovation Management.” Gartner. (2012)
2Carlson, M (Author), and Planview (Publisher). (2012). Figure 1. The Pain
3Carlson, M (Author), and Planview (Publisher). (2012). Figure 192. Automated PPM System