Best Practices for High Tech NPDI: Improving the Business by Mitigating Risk

BEST PRACTICES FOR HIGH TECH

NPDI:

IMPROVING THE BUSINESS BY

MITIGATING RISK

Research Analyst, Manufacturing, Product Innovation * Engineering

Aberdeen Group

Reid Paquin

Follow the conversation on twitter with the

hashtag #NPDI

BEST PRACTICES FOR HIGH TECH

NPDI:IMPROVING THE BUSINESS BY MITIGATING

RISKOctober, 2014

Reid Paquin, Research Analyst,

Manufacturing, Product Innovation & Engineering

3

TODAY’S AGENDA

Introduction

Building the Right Portfolio

Eliminating Risk in the NPDI Process

Key Takeaways

Questions?

4

REID PAQUIN

Research

Analyst –

Aberdeen

Group

Prior Work:

• Industrial Engineer—Textile Manufacturer

Coverage Areas:

• Product Development

• Portfolio Management

• New Product Introduction

Education and Certifications:

• MS in Statistics from University of New Hampshire

• Graduate Certificate in Industrial Statistics

• BS in Mathematics from the University of New Hampshire

5

BACKGROUND INFORMATION

• Majority of the data comes from a recent

Aberdeen study on New Product Development &

Introduction (NPDI) risk.

– Conducted October 2013 to January 2014

– Over 160 responses from various industries

– Webinar will focus on “High Tech” companies

• Includes computers and components, automation and control

components, semiconductor, consumer electronics, etc.

6

ABERDEEN’S RESEARCH METHODOLOGY

PACE: END-USER INVESTIGATION

!

PRESSURES ACTIONS CAPABILITIES ENABLERS

External and internal

forces that impact an

organization’s market

position,

competitiveness, or

business operations.

The strategic

approaches that an

organization takes in

response to industry

pressures.

The business capabilities

(organizational, process,

knowledge management

etc.) required to execute

corporate strategy.

The key technology

solutions required to

support the

organization’s business

practices.

What is causing

organizations to think

differently?

What strategies are

they using to respond

to pressures?

Why are they achieving

greater success?

What technologies and

services are enabling

them to succeed?

7

ABERDEEN MATURITY CLASS FRAMEWORK

DEFINING THE BEST-IN-CLASS

Selected Performance

Criteria (KPI)

Organizational Goals

Employee Performance

Bench Strength

Total

Respondents

- Top 20%

- Middle 50%

- Bottom 30%Respondents are scored

individually across KPI

Best-in-Class

Industry

Average

Laggard

8

Definition of Maturity Class Mean Class Performance

Best-in-Class:

Top 20% of ALL aggregate

performance scorers

87% of product launch dates met

88% of product cost targets met

91% of product quality targets met

84% of product revenue targets met

High Tech Leaders:

Top 35% of High Tech

aggregate performance

scorers





High Tech Followers:

Bottom 65% of High Tech

aggregate performance

scorers





HOW DOES HIGH TECH STACK UP?

Source: Aberdeen Group 2014

BUILDING THE RIGHT PORTFOLIO

10

POLL QUESTION 1?

• What is your Top Challenge to Effectively

Manage Project Portfolios?

11

WHAT PRODUCTS SHOULD BE

SELECTED?Top Challenge for High Tech

Companies to Effectively

Manage Project Portfolios:

• Too many projects in pipeline -

28%

• Customer / market preferences

change too fast for length of

development cycle - 20%

• Inability to properly assess risk

in portfolio - 18%

19%

8%

0% 5% 10% 15% 20%

Need to improve portfoliomanagement / selecting the

right products for investment

Percentage of Respondents

Non High Tech

High Tech


12

5 AREAS TO FOCUS ON TO DEVELOP A

PROFITABLE PORTFOLIO

• Align the product to customer needs

• Select the right products for the portfolio

• Fully understand resource constraints

• Continuously manage and monitor the portfolio

• Make decisions of standardized measurements

13

ALIGNMENT WITH CUSTOMER NEEDS

• High Tech Leaders are 81% more likely than

Followers to solicit customer feedback


14

DETERMINING THE RIGHT PRODUCT

13%

47%

0% 10% 20% 30% 40% 50%

Ability to perform 'What-if'scenarios


High Tech Leader

High Tech Follower

Leaders have greater insight into the impact of portfolio decisionsSource: Aberdeen Group 2014

15

RESOURCE CONSTRAINTS

• High Tech Leaders are 75% more likely than their

peers to have centralized visibility into the

resource workload across their projects

• In addition, Leaders are 65% more likely to have

required skills mapped to project resources


16

CONTINUOUS MONITORING

45%

50%

67%

89%

0% 20% 40% 60% 80% 100%

Decisions are constantly made from a singleversion of the data

Defined owner assesses project health andhas authority to kill projects


High Tech Leader

High Tech Follower


17

UTILIZE STANDARD METRICS

• High Tech Leaders are 33% more likely than their competitors to use standard performance metrics to assess items like:– market potential

– competitive potential

– commercial risk

– technical risk


ELIMINATING RISK IN THE NPDI

PROCESS

19

POLL QUESTION 2?

• What is the top pressure driving your company

to make better decisions during product

development?

20

PRICE COMPETITION ON THE RISE


8%

17%

38%

21%

12%

20%

24%

27%

0% 10% 20% 30% 40%

Need to grow / protect market share

Time to market pressures / shrinking windows ofopportunity

Customer demand for lower cost products /price competition

Competitive pressures to differentiate productswith better quality / reliability


All Respondents High Tech

21

CAN YOU GET AT YOUR DATA?

29%

38%

33%

38%

24%

29%

31%

39%

0% 10% 20% 30% 40% 50%

Product information is too detailed and technical forexecutive decision making

Takes too long to collect required metrics fromproduct development team

No method for obtaining insight / visibility to neededinformation / data to support decisions

Too many manual processes (spreadsheets)


All Respondents High Tech


22

KEY NPDI RISK COMPONENTS

• Cost Management

• Compliance Management

• Supplier and Material Management

• Requirements Management

23

WHAT COSTS DO YOU HAVE

VISIBILITY INTO?Type of Cost Best-in-Class High Tech

Leaders

High Tech

Followers

A full view of costs is essential; compliance costs cannot be an

afterthought

Labor Costs 74% 93% 67%

Manufacturing Process Cost 74% 64% 52%

Compliance Associated Costs 39% 52% 38%


24

COMPLIANCE MANAGEMENT

• Compliance is the

most overlooked risk

in NPDI

• RoHS, REACH,

FMD, Dodd-Frank

Act, EU Battery

regulations all affect

High Tech companies

50%

39%

70%

20%

69%

20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Audit trail available to supportcompliance

Ability to identify the presence andconcentration of substances and

materials in products

Best-in-Class High Tech Leader High Tech Follower


25

POLL QUESTION 3?

• What is your top challenge when working with

suppliers?

26

SUPPLIERS CAN BE YOUR BEST

FRIEND OF WORST ENEMY

67%

47%46%

64%

33% 33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Real time visiblity into supplierprogress

A make vs. buy analysis isconducted on components

Perc

enta

ge o

f R

esp

on

den

ts

Best-in-Class High Tech Leader High Tech Follower Top Challenge for High Tech

Companies to work with

suppliers:

• Lack of visibility to supplier’s

manufacturing capabilities

- 38%

• Meeting project schedules

- 26%

• Lack of visibility to supplier’s

capacity - 25%


27

REQUIREMENTS MANAGEMENT

• Half of High Tech Leaders see requirements as

a problem that must be continuously monitored.

• Leaders already align their products to customer

needs from the beginning, setting themselves

up for success.

28

UTILIZE THE TOOLS YOU HAVE

• High Tech Leaders are more likely to use tools and enterprise systems to get information into the hands of decision makers at the right time.

• Best-in-Class/Leader tools include: – Enterprise innovation management (EIM)

– Decision modeling

– Business Intelligence (BI)

Information like:

• Cost

• Suppliers

• Requirement

s

• Compliance

KEY TAKEAWAYS

30

WHAT SHOULD YOU DO?

• High Tech Followers:– Focus on the 5 areas identified for effective PPM

• Customer needs, the right products, resource constraints, continuous monitoring, and standardized measurements

– Work towards mitigating risk in the NPDI process• Managing cost, compliance, supplier interactions, and

requirements are all areas that Followers need to improve.

– Turn to technology tools to bring the necessary data access and visibility to decision makers

31

WHAT SHOULD YOU DO?

• High Tech Leaders (and the industry as a whole):

– Move past the audit trail, stress real time visibility into

compliance.

– Extend that visibility into your supplier base, make these

strategic partnerships instead of necessary speed bumps

– Continue to invest in the needed tools to consolidate data

and manage these NPDI risks.

– Realize there is always room for improvement.

THANK YOU

For more information on this and other topics, please visit aberdeen.com

[email protected]

@ReidpaquinABG

Reid Paquin

mailto:[email protected]

https://twitter.com/ReidPaquinABG

http://www.linkedin.com/pub/reid-paquin/97/795/b3b/

ANY QUESTIONS?

What plans do we create to achieve business objectives?

Which strategies will we pursue?

Accolade Innovation PlannerAccolade Roadmapping

Which ideas/concepts support our strategic objectives?

Which ideas/concepts are viable initiatives?

Accolade Idea LabAccolade Idea Submission

Should this initiative move forward for launch?

Should this initiative move into development?

Accolade Process ManagerCollaborative Workflow

How do we get more from our portfolio?

Is our portfolio achieving our performance goals?

Accolade Portfolio CenterResource Planning

Learn More About Sopheon’s Accolade®Integrated Enterprise Innovation Management (EIM)

Enabling Cross-Functional Decision-Making to Define and Manage Innovation Investments

We would be delighted to share more with you about how your company can improve NPDI performance, manage risks, and achieve exceptional long-term

growth and profitability.

To learn more, visit www.Sopheon.com

http://www.sopheon.com/