Studies show that around 60 to 80% of new products fail. I know hey, a pretty broad estimate, but then again who’s going to talk openly about their innovation failures?
But the question has to be asked, why do so many new product innovations fail?
Of course, defining failure is a subjective matter; if you’re moving at speed, getting through more failures in a short period of time means you’ll reach success quicker than your competition. But equally, couldn’t you have caught that failure before a whole lot of manufacturing, marketing and sales expenses? And, as a result it’s about getting to the failure as quick as you can, before you waste too much time on it.
Why do so many ideas, innovation projects and new products fail?
Knowing the reasons for this is extremely valuable. After all, if you know the causes of innovation failure, you can set the right measures and methods in innovation management in order to considerably increase the chances of success.
A new product can fail in so many ways, but the bottom-line in the end is it doesn’t initially find the customer and over time add sufficient value to their lives. It’s the journey prior to this that’s so crucial to ensure the right product is going into the market.
As a result, it is clear, whether an idea succeeds or fails depends largely on the company.
Around the world, the C-Suites are feeling the pressure to innovate and create business models that can keep up with disruptive technology and advance customer experience thinking. However, what’s most telling is less than 10% of CEOs are satisfied with their organization’s innovation capabilities.
Today, it’s about innovation and it’s the primary factor in driving growth. The CFOs, CIOs & CTOs have budgets and I have to say right now, if I had to spend money on anything it would be on applications that enable and deliver innovation, above that of any other enterprise application. According to a recent study, almost 100% of companies are already running ERP applications and this is not surprising given it was the first application to establish it self as an essential business tool.
However, without PLM the ERP system will not establish a forward looking and collaborative innovation platform, nor will it manage and consume accurate data from design, engineering, manufacturing and maintenance, especially when you start to include Industry 4.0 Technologies such as IoT and “Big Data”. It can ultimately lead to minimal or no improvements to the business, innovation and products.
It was the other day, in Stockholm, with one of the leading vendors and their head of delivery and we were chatting. We were saying to each other: “Why is it, when large enterprises know they have to innovate that they more easily “pull the trigger” on an enterprise management system (ERP) for millions than they do for a product innovation platform or PLM system that could save their company from disaster over the years ahead?”
Perhaps it’s because the CFO & CIO align themselves more with ERP, while the head of manufacturing/engineering aligns with PLM?
We concluded, today’s priority is in the installation of Product Innovation Platforms, Product Lifecycle and Manufacturing Operations application layers, because to survive in the 4IR, nothing is more important today than delivering better, smarter, more personalized and faster delivered products.
So what is it that’s holding companies back from fully launching their end-to-end PLM strategy?
Surely, everyone regardless of their role, shares the same goal? the success of the business?
or maybe they don’t?
The people who recognize the initial value from PLM are relatively senior, technology or manufacturing personnel. They understand the importance of improving seamless material traceability that makes the investment in seamless, end-to-end, data technology and collaborative processes the much simpler.
Meanwhile the C-Suite has been conditioned to focus primarily on the wider operations, measurable quality assurance, sales, accounts payable and purchasing, never mind overall business strategy, budget and CapEx.
As a result, while they are interested in change, especially technological, they are compelled to look at everything from an ROI perspective. In other words to turn skeptics into fans, you must first focus on the ROI.
Talking Their Language
PLM has to and does connect to generating revenue, developing customer loyalty, and reducing processing costs throughout the supply chain. The customer expectation / experience economy means a very different customer who now looks beyond just price and buying convenience.
Consumers now demand a more immersive experience and one that allows them to self-learn across multiple touch-points prior to physical engagement.
Personalization and maybe one day even “batches of one” mean if manufacturers don’t follow changes along the supply chain, they will miss correct labeling, design and delivery. This can lead to regulatory issues and potentially even consumer danger. Storing all these increasing product variables in an end-to-end PLM system makes it easy to reflect these ongoing changes.
In addition, producing that all important ROI, PLM can bring increasing revenue through faster design and manufacturing combined with earlier product introduction can lead to the revenue increase. PLM allows the company not to waste time and effort while the product is going through its lifecycle.
This can be further extended to Product Cost Reduction, the Reuse of Parts, and of course the removal of costly mistakes.
But really, is that what we’re looking for in order to survive and thrive in the 4IR? a Return on Investment of PLM versus other applications?
or, today isn’t it about innovation success, where we first started this article?
A product and innovation survey of manufacturers conducted by IDC found that for over half, the ’big vision’ for product life-cycle management is to be ’best in class in product innovation.’
Today, I’m seeing the main way is through the introduction of the Product Innovation Platform (PIP) — a unified, global product design system that’s designed to bring in all cross-functional and ecosystem innovation, be that mechanical, electrical, structural and software together with data and realtime global collaboration.
Now to talk the language of the C-Suite, we need to start talking ROII!!
Yes, Return on Innovation Investment and that’s an entirely new world.
It’s an amazing new world and always exhilerating to be part of it — new product innovation, design collaboration enablement through platforms, efficient and productive product lifecycles and smart manufacturing is where the enterprise attention is going.
See you in there
Best wishes, Andrew