Executives focused on driving business performance through innovation recognize the need to focus not just on the speed and quality of project delivery BUT also on the quality of projects which enter the innovation funnel and the overall effectiveness of the system.
The use of a Stage Gate ® process to manage the pipeline of development opportunities has long been recognized as an essential tool for best practice new product development. Its is now estimated that 75% of fortune 500 companies in the US are using a gate based process for managing NPD. While Australia may lag the US in the adoption of best practice processes for effective innovation and product development management it is clear that having a Stage Gate ® process is no longer a differentiator but rather a “Must Have” tool.
Leading companies have identified a suite of product development best practices which assist in achieving their innovation goals. These practices include:
- Stage Gate ® processes: Structured, systematic processes with clearly defined project acceptance and kill criteria
- Cross-functional teams: Multi-skilled teams representing marketing, development, production, supply chain, legal and financial stakeholders.
- Platform Development: Long range technology projects which deliver multiple products from a single technology platform.
- Voice of the Customer: Utilizing qualitative interview methods to engage with a broad range of product stakeholders to identify un-met customer needs as the basis for product differentiation.
- Product Portfolio Planning: Using a strategic buckets approach to allocate the planned investment in R+D spending across alternate opportunities represented by incremental changes to existing products, new to company products and new to world products.
Increasing the overall effectiveness of the innovation process requires a front-loaded process which emphasizes the importance of bringing highly focused innovative ideas into the funnel and then applies sound discipline to their evaluation. To quote from Dr. Robert Cooper, “You don’t want late kills”.
Shifting the emphasis on product development to the front end of the funnel requires information to be structured in a way which is easily accessible to management. Automating a Product Portfolio Management system requires key data on individual development projects to be captured at the project level and feed through to the portfolio view. Data such as the investment required, the probability of commercial success, the probability of technical success, the comparative gate score and other key project attributes need to all be accessible via a dashboard view which allows management to effectively manage the comparative benefits of the alternate resource investments available to them.
“for management this means that decisions are based upon real time data with the impact on the existing portfolio of projects being clearly visible”
Automated Idea and Stage Gate ® management enables automated Portfolio Management. For management, this means that daily decisions are based upon real-time data with the impact of any proposed project on the existing portfolio of projects being clearly visible and understood.
Automated NPD management is where the rubber meets the road, The information embedded in development projects which is usually the domain of operational executives becomes accessible to the strategic managers of the business. These best practice tools empower senior executive teams with accurate, up to date information to make effective real-time decisions on business opportunities.