Creating An Innovation Strategy That Scales With Product Intelligence
69% of executives are relying on sales growth first to measure how successful their organization’s innovation efforts are according to the PwC Innovation Benchmark
72% of enterprise leaders say they’re not out-innovating their competitors, specifically in the area of new product development.
Computing & Electronics, Healthcare, and Automotive are the top three industry sectors and represented 61.3% of global R&D spending in 2017.
Relying On Product Intelligence To Out-Innovate Competitors
Finding new high-growth markets to compete and win customers in happens when new product development teams capitalize on the intersection of their most valuable product strengths and best-known customer needs. As intuitive as this sounds, it’s a challenge for nearly every manufacturer to make this a core aspect of their new product development process. Any company’s most valuable product strengths fluctuate over time. And customer needs and preferences change even faster. Staying at the intersection of product strength and customer needs has never been more challenging.
What separates the manufacturers who use product intelligence to out-innovate competitors?
The following are a few of the many ways manufacturers turning product intelligence into a competitive strength:
Having a well-defined business case for turning product intelligence into revenue on a per product-line and per-roadmap basis is a must have. 69% of enterprise executives who responded to the PwC Innovation Benchmark 2017 Report say sales growth is by far the most important metric to measure innovation. Customer satisfaction was a distant second, 26% below sales growth. Indexing innovation to sales growth will get any organization out of the rut of just competing on price alone. The world’s most innovative products often are the most profitable too as the PwC study shows.
Replacing siloed, partially-integrated Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems with a unified platform drive greater innovation. When PLM, CRM, and ERP systems are unified into a single platform the accuracy, speed, and quality of data immediately increase. Manufacturers get beyond relying on CRM alone as their system of record. Customer requirements isolated in CRM and PLM systems become actionable. Product intelligence turns into revenue. It all starts by creating a new platform that transforms the most valuable data from PLM, CRM, and ERP systems into a new, more valuable system of record. The following graphic from the PwC Innovation Benchmark 2017 Report reflects how more collaborative operating models are far outpacing siloed, traditional approaches to Research & Development (R&D).
Configuration Lifecycle Management (CLM) platforms flourish and grow innovative new product ideas when there’s a solid process to turn customer feedback and recommendations into revenue. 54% of enterprises are relying on customer engagements to improve customer-facing processes and fuel new product and service ideas. One in three (35%) say customers are their most important innovation partners. Customer insights are the fuel platforms need to deliver revenue growth.
Prioritizing process innovation first, starting at the product level and scaling out across the enterprise delivers a 4% increase in productivity. Process-based innovation based on customer feedback, internal audits to increase performance and greater clarity of goals to streamline operations pays. These findings are according to the Boston Consulting Group (BCG) in the study, An Innovation-Led Boost for US Manufacturing. Their study of North American manufacturing found that when manufacturers accomplish more product and process innovation, productivity jumps by $116B nationally.One of the key takeaways from the BCG study is that process, and product innovation is among the most powerful factors stabilizing and growing global manufacturing. The following graphic from the BCG study An Innovation-Led Boost for US Manufacturing show how significant product and process information are to improving productivity.
Create scorecards and dashboards to track how effective innovation strategies are at driving new revenue as part of your broader product configuration, CPQ, and mass customization strategies. Setting revenue targets or goals by innovation initiative brings immediate focus and intensity to each new product or service development effort. Jaguar Land Rover, Netstal Machinery, and Karl Storz-Endoskope are a few of the many manufacturers who are taking an analytics-centric approach to managing innovation in their product strategies. Karl Storz-Endoskope was able to reduce time-to-quote by 50%, increase quoting accuracy by 99% and reduce the cost-of-quality by 80%. Best of all they were able to accomplish these impressive results while accelerating innovation. The following graphic illustrates how analytics can be integrated into a CLM platform, providing insights into innovation’s growth contributions.
Taking a focused, deliberate approach to innovating needs to start with a business case that shows the growth potential of every potential product and service idea. Platforms that combine PLM, ERP, and CRM systems are invaluable in keeping innovative projects on track to their goals. All three enterprise systems combined contribute to a customer- and product-based system of record that makes scaling products faster and more accurate than any other approach. The combining of these systems into a Configuration Lifecycle Management (CLM) platform, fueled by customer insights, creates an innovation engine that delivers new product and service concepts with the highest growth potential.