The design process and the

'crisis' in the UK information

technology industry Margaret Bruce

Design Discipline, Faculty of Technology, The Open University, Milton Keynes, UK

The competitive position of UK information technology (IT) manufacturers in the expanding markets for IT equipment is declining. A recent report published by the National Economic Development Council

(NEDC) 1 describes the situation facing the UK IT industry as one of 'crisis'. This paper reports some of the findings of an investigation, conducted by the Design Innovation Group

at the Open University, into the role of design in the competitiveness of manufacturers o f i T equipment. The approach to design and development o f four UK companies is examined in detail. It is argued that the supplier' s lack of attention to design for user needs contributes to the "crisis' situation expressed by the

NEDC.

Keywords: information technology, user needs

The world market for information technology (IT) is growing at the rate of ten per cent per annum. The potential growth of the world IT market is expected to be enormous. Indeed, forecasts made by PACTEL 2 predict a total world market of £150 billion by 1990.

However, the general optimism and confidence in IT as a means of helping economic revival in Britain is tempered by a Report recently published by the National Economic Development Council (NEDC) 1. The NEDC report points to the very small (4%) share that the UK IT industry has in global IT markets and the increasing penetration of imports into UK IT markets. Imported IT products now account for over half of the UK market. At the same time, Britain's overseas competitors are per- forming better than the indigenous IT supply industry. This situation is shown in Figure 1. The NEDC Report raises questions about the strategies and programmes to be adopted to build a strong UK IT industry capable of exploiting the potential market growth.

One programme is currently being implemented, namely, the Programme for Advanced Information Technology (PAIT) outlined in the Alvey Report 3. PAIT entails allocating large resources, in a national collabora- tive effort, for basic invention of 'fifth generation' IT 4. The Alvey Committee identifies four areas of 'fifth generation' IT: software engineering, very large scale integration (VLSI); man machine interface (MMI) and intelligent knowledge based systems (IKBS). However, even if good ideas come out of the PAIT, is there a sufficiently strong UK IT industry to manufacture and commercially exploit these and to take advantage of the opportunities offered by a rapidly expanding market?

This paper argues that a strategy which emphasises not just basic research and invention but one which takes account of the effort required to design for the user and for the market (i.e. design for innovation) is necessary to improve the competitiveness of the UK IT industry. Evidence in support of this argument comes from case

34 0142-694X/85/010034-07 $03.00 O 1985 Butterworth & Co (Publishers) Ltd DESIGN S T U D I E S

studies of the product design and development activities of four independent UK IT companies. The case studies arise from a survey of the design and innovation process of UK IT companies, conducted by the Design Innova- tion Group of the Open University. The role of industrial design in influencing the commercial position of the companies is assessed.

designers; and the attitude of companies to design. The investigation compares design and development activities of UK-based IT firms with those of leading overseas competitors and with companies from other manufactur- ing industries, notably, office furniture and heating equipment.

In this paper, the approaches to product design and innovation taken by four of the twelve UK IT suppliers

APPROACH A N D M E T H O D O L O G Y

For the past two years, the Design Innovation Group based at The Open University has been surveying, among other industries, the electronic business equip- ment sector and has compared the product design, development and innovation activities of companies displaying varying degrees of commercial success and failure. The data has been collected by means of in-depth interviews with designers, engineers, product planners and marketing staff in a sample of firms. The study has focused on the employment of designers, engineers and design consultants; the briefing of design and develop- ment staff; collaboration between designers and manage- ment, production and marketing staff; the work of

._o

E ~4

4000

3500

3000

2500

2000

1500

Output

Exports

I000

500

0 ~ I I I

1970 t975 1980 1985

These figures probably understate the performance of the industry, but they are a consistent set of data end give a realistic indicator of trends.

Sources: Business Monitor. PQ 3502 and PQ 5441. SDQ9 on output and exports.1985 fourth quarter figures are NEO0 estimates.

a

Share of world IT market (percentage) 1981

uf~ 4 France Japan

6 West 19 Germany 7

Average annual growth rate 1970-82 (percentage)

UK France West ,Japan USA 12 19 Germany 23 18

15 ................................

Balance of trade in IT products £ millions

Software is excluded to maintain rough comparability of figures Based on exchange rates at time of shipment.

The Japanese average growth rate figure is for 1970- 81.

Sources, various, including Business Monitor, MackintOsh, US Current Industrial Report and dapan Electronics Almanac.

b Employment in the UK IT industry

° 3 - ~ . _ _ -200 -

-400 -

-600 -

-800 -

I I I I I I C 1970

'O00s 160

- 150 140 130 120

Balance of t r ade~

I I I I I I I I I I I I I I I I I I I

1975 1980 1983

Figure 1. Performance of UK I T industry. (a) The UK I T industry's output and exports have both grown fast; (b) Our main overseas competitors have been doing better than us; (c) 1reports are taking a larger share of the UK I T market and I T industry jobs are down (Source: NEDC- 19841)

Vol 6 No 1 January 1985 35

surveyed (companies A-D) are briefly examined. The companies are medium-sized (employing between 80 to 300 people) and produce office automation products. They differ in their commercial performance. Companies A and B are expanding and successful with a high export trade. Both companies have the image of producing well-designed, high quality products. The products of company A have won awards for technical design. Whereas, company C, after a period of initial and rapid expansion is in a situation of survival. Company D is a relatively new company and is surviving in a competitive market place. Neither of companies C or D has won an award for the design of their products. The approaches to design and innovation taken by the four companies are described separately below.

APPROACHES TO DESIGN AND INNOVA- TION AT THE FIRM LEVEL

Company A

Company A was established in 1979 to 'design, develop, manufacture and market wordprocessing systems'. It employs about 300 staff, is expanding rapidly and is in a strong market position, exporting about 40 per cent of total sales to the competitive markets of Europe. This is mainly achieved through forward planning combined with good marketing and design management. The company has formal plans which consider future trends and the company's position with regard to these in five years' time. Central to the 'strategic plan' is the idea that the company will expand in terms of revenue growth. Company A plans to maintain a 'leading edge' position, to have large volume markets through selling directly to

customers, selling to 'OEMs' (Original Equipment Manufacturers) and through distributors. Effort will be increasingly expended on developing 'user-friendly' pro- ducts in close collaboration with users. Second, formal market research is conducted to establish future trends in the marketplace and to help identify gaps in existing markets. However, the main marketing effort in relation to both hardware and software design and development is in establishing close contact with users 'to try out ideas on them and to listen to them'. Board members have direct contacts with the staff of large customers enabling the company to test new products on selected users before launch.

Design for company A means 'the process of turning a concept into a product which can be manufactured'. Design for manufacture is the focus of the design effort. The Research and Development Manager oversees the software and hardware design and development activities.

A committee is responsible for new product develop- ment and reports to the Board. This committee has representatives from marketing, development and pro- duction. It meets regularly to generate and evaluate ideas for new products and to assess the progress of products at various stages of their development. A product manager is responsible for co-ordinating inputs from marketing, development, production, etc. and draws up the produc- tion specification. This sets out the market needs, market price, cost of production, product functions, dimensions of the product and usually includes sketches and sometimes a model, of the proposed product.

The main stages of product design and development, as described by company A, are shown in Table 1. These are concept approval, product planning, prototype de- velopment, initial production and 'beta tests', that is,

Table 1. Design and development process for company A

Design stage Departments Form of representation involved of product/activities

Concept approval

Outline product plan and evaluation

Detailed product plan

Prototype development and preparation of documentation

Pilot manufacture

Launch

Batch production

Product management group and individual(s) making the concept proposal

Product management group and industrial designer plus development and management staff from throughout the company

Product Manager appointed to co-ordinate development. Industrial designer and product management group plus inputs from the company

Project team and purchasing

Product Manager. Production and marketing and sales

Written outline and sketch

Sketches, artists impressions. Written material. Discussion

Refinements of drawings and ideas. Three-dimensional polystyrene model

Software development, artwork for printed circuit boards, hand-wired proto- types, availability and costings for components

Check the manufacturing procedures, develop field testing procedures, do environmental tests, try out on inhouse users. Validate software and eliminate 'bugs'. 'Beta' trials and discussions with OEMs

36 DESIGN STUDIES

user tests of the first batch of products. Company A employs a consultant industrial designer who contributes to the conceptual design and liaises with the product manager. The industrial design consultant is responsible for the physical design and external appearance of the product. The industrial designer also has an appreciation of the internal layout of the electronics, and the company relies on the industrial designer to provide an ergonomi- cally designed product so that the equipment has a good human interface.

Most effort in the design and development process is given to prototype development, including software design and development, and initial production. Manu- facturing staff are heavily involved in this phase and they work out how to make the product economically and efficiently. It takes about twelve to fifteen months to move from concept design to production.

Design management for this company also means encouraging the creativity of its staff. Regular meetings are held to foster good communication and to stimulate ideas through thinking about alternative solutions to problems. All staff are expected to develop an awareness of the market and then to try and make suggestions for new products, and improvements to existing products, in accordance with market needs.

Company B

This firm was founded in 1975 to distribute computer peripherals--terminals, keyboards, printers, etc.--three years later it began to manufacture terminals. The company employs 128 staff and exports 32 per cent of its products to the competitive markets of Europe. It is growing steadily, and, recently, major investment has been made in new product development. The company attributes its commercial success to its 'high quality product design, being British and maintaining inhouse control of product development'.

The main factors contributing to the commercial success of the company are its approaches to marketing and to design philosophy and organisation.

Marketing information is collected mainly through sales staff establishing close contacts with and talking to users; analysing the feedback from service technicians, who are in direct contact with users, and listening to the reports of the company's overseas agents. Marketing staff also visit trade exhibitions to look at and evaluate the competition. This helps the company identify trends in product development and to make their peripheral designs compatible with other products in the market.

Design is defmed as 'covering everything from the look of the final product, colour, shape, form and technicalities to whether the product is 'classier' than that of the competitors' designs'. If competitors' pro- ducts are considered 'classier' then the company tries to work out how the competitor has made the product for that price. This may entail acquiring competitors' products and evaluating these inhouse. In some inst- ances, the competitor's design rffay be imitated. The definition of design is broad and treats design as

co-ordinating product visualisation, user needs and technical requirements. The products are designed in a modular way so that the user can purchase the basic parts of the product and upgrade or change the product in a 'building block' way. This modular design philosophy allows the company to respond quickly to changing technologies and user needs.

The process of product design and development is managed by a development committee which has repre- sentatives from marketing, sales, technical development and production. The committee is directly responsible to the Board and oversees new product developments. The specification for new products includes sketches, details of the functions of the product, its dimensions, etc.; outlines the potential markets, the cost of the product for the end-user and describes the 'state of the art', that is, the competition in the marketplace.

Table 2 sets out the typical stages involved in product design and development, as outlined by company B. These include conceptual development, evaluation and selection of ideas, production of models, testing, proto- type development and production.

As indicated in Table 2, a considerable amount of time and effort is spent on design and development and on getting the product right from the marketing and technical point of view before moving onto the next phase. The main effort is put into conceptual develop- ment in terms of styling, image and technical feasibility. The whole process takes about eighteen months to two years. A consultant industrial designer contributes to- wards the styling and image of the product and making the human interface appropriate for the user-skills which are not available within the company.

Company C

This company was founded in 1973 to design and manufacture computer systems and peripherals. It went through a period of rapid expansion, which has been followed by retraction, as evidenced by a number of redundancies which cut the staff employed from 470 to 350. Currently, the company is not expanding, it is surviving. There is no export trade. The company has an image of itself as being 'technically competent' and having a 'competitive edge' through the price and quality of its products. The market is still bouyant, so the main reasons for the demise in trading position can be looked for within the company.

The company has no formal planning procedures. The Engineering Manager participating in the survey believes that the future direction for product design and develop- ment lies in technology-led market expansion. The company does not sponsor market research surveys, although the data that is publicly available is used to identify trends. Additional market information is ac- quired from company staff attending conferences and exhibitions. The salesforce is in direct contact with users and the salesforce provide the main source of user feedback. Products are not tested by users before they are launched on the market because the company is

Vol 6 No 1 January 1985 37

Table 2. Design and development process for company B

Design stage Departments involved

Form of representation of product/activities

Conceptual development and selection

Feasibility study

Selection of concepts

Model development and evaluation

User tests by inhouse staff

Prototype development

Prototype testing

Pre-production models

'Beta' Tests

Launch

Volume production

Product development committee

Consultant industrial designer, marketing and technical managers, plus inputs from hardware and software staff

Product development committee and industrial designer

Product team and industrial designer

Product development committee and industrial designer

Marketing

Software, technical director and production staff and drawing office

Marketing, hardware and software

Hardware, software marketing and production

Marketing and large purchasers

Discussion, sketches

Artists' impressions and written reports. Evaluate marketing and technical feasibility of going ahead

Drawings, sketches and discussions

Cardboard models and mock-ups

Working plastic model

User reaction

Purchase components, begin develop- ment work

User tests with inhouse staff, and life- testing of prototype

Handmade models. Test for manufacture and life-testing

User reaction

convinced that the 'idea will sell'. The company treats design as 'everything from plan-

ning through to marketing'. Design is regarded as the process of co-ordinating the different activities involved in product design and development. This is mainly achieved by regular Divisional meetings where the Heads of Divisions discuss company progress and evaluate product ideas.

For new product development, a project group is set up. This typically has representatives from marketing, design and production. The marketing and production managers are responsible for development of the pro- duct. Ideas for new products usually originate from development staff and marketing and technical specifica- tions are drawn up.

The stages of product design and development, described by company C, are shown in Table 3.

A consultant industrial designer was recently em- ployed to design a terminal. He worked on the casing design because the skills were not available inhouse. At the time of the survey, company C was in the middle of a major company reorganisation after financial losses. These had occurred partly because the company had not employed tight budgetary controls for product design and development. A more rigorous procedure for pro- duct design and development was in the process of being introduced. The consultant industrial designer had been recruited to the company staff as manager of the hardware and engineering design section. He is responsi- ble for co-ordinating the marketing and technical inputs for product development and implementing a design

process which is more cost-conscious in its evaluation of new ideas.

Company D

Company D is a relatively new company, established in 1981 as a computer manufacturer and employing 80 people. The company plans to grow by designing products which are compatible with products already on the market, so that users can upgrade these by acquiring products made by company D. The system is a modular design so that users can, over a period of time, build up a system by purchasing parts of the system separately.

Company D gets a 'feel' for the market through staff attending exhibitions and because the company's desig- ners use the products themselves, they believe they 'know' the needs and preferences of users. Fault reports and comments from dealers are another source of market information. Market research surveys are too expensive for the compay to commission.

Product development is the responsibility of the Development Director and Managing Director. The Development Director defines design as 'technical de- sign, as everything entailed in making the product and achieving visual harmony of products within a range'. A member of the technical staff usually initiates develop- ment and produces a written specification with no visual representations of the design. Most design and develop- ment activities are carried out inhouse, although a consultant industrial designer was employed to work on casing design, as these skills were not available inhouse.

38 DESIGN STUDIES

Table 3. Design and development process for company C

Design stage Departments involved Form of representation of product/activities

Idea

Feasibility study

Cost budgets

Evaluation

First prototype

Second prototype

Pre-production

Production

Divisional meeting

Project group with technical and marketing inputs

Technical director and divisional meeting

Product design and marketing

Product design and marketing managers

Product design group and production

As above

Discussion. 'Rough' written material

Evaluate costings and consider marketing and technical possibilities

Written material. Activity description and project network plans

Is it feasible to produce? Written report, drawings

Full-scale layout of circuitry for printed circuit boards

Test manufacturing process

The stages involved in the design and development process are set out in Table 4, as outlined by the Technical Director for company D.

The most important stage of product development, and where the main effort is expended, is that of establishing whether the proposed idea meets the com- pany's objectives. New product development takes between one to eighteen months.

DESIGN FOR THE MARKETwTHE COM- PANIES COMPARED

All the companies have a basically similar procedure for the design and development of new products. However, there are important differences in the perception and understanding of design and its role in product develop- ment.

Company A focuses on design for manufacture and the Research and Development Manager is responsible for both styling and hardware and software design. Com- pany B regards design as the resolution of various demands of production, style and marketing. The design is not frozen until fairly late in the development process. Companies A and B regard industrial design skills as contributing to concept design and improving the human interface of the product. Whereas, for company C, design is a process which co-ordinates marketing and technical inputs in the product development activity. Company D defmes design as akin to styling, providing visual harmony between the individual products within a system range.

Companies A and B develop close contacts with users to get reliable market information; they have good internal management and communication; and they engage in long-term planning and see themselves as being

Table 4. Design and development process for company D

Design stage Departments involved Form of representation of product/activities

Needs

Evaluation

Design

Development

Review of working prototypes

Pre-production models

Production

Managing director, production, sales and development directors. The Board

As above

Development director, consultant industrial designer and inputs from other staff, if required

Directors of sales, production and develop- ment, managing director and inputs from development staff. Product managers appointed, mainly to liaise with external people (e.g. suppliers)

Sales and support staff

Sales

Discussion to identify company needs and resource allocation

Discussion

Three-dimensional models. Mock-ups of boards for layout. Engineering drawings.

Computer aided design of circuitry. Soft- ware development. Working prototypes

Consider prototypes and comment on these

'Beta' tests with selected users

Vol 6 No 1 January 1985 39

in a better market position in the future. The companies have a clear line management responsibility for product design and development with direct contact with the Board. These two companies give the impression of being good at all aspects of business activity and their attitudes towards industrial design fits into this context. A similar conclusion was reached by Walsh and Roy s and Walsh 6 in their study of design in the plastics industry. In contrast, companies C and D are not as aware of future trends or the need to plan for these as they are concerned with survival rather than expansion. In companies C and D the main source of marketing information is their own designers' knowledge of the company's products and those designers' interpretations of user needs. This can lead to a situation where designers design for themselves and do not take the requirements of other types of user fully into account.

Indeed, the approach to product design and develop- ment taken by companies A and B has led to their consistently higher commercial performance than that of companies C and D.

KEY FACTORS IN DESIGN

Bruce 7, in an earlier paper, identified some key factors for the successful design of IT products. How do companies A, B, C and D score in terms of these factors? Table 5 sets out the key factors and evaluates the four companies' approaches to design in terms of these factors.

All the companies recognised the importance of design and the need to integrate design activities with those of marketing and production. However, companies A and B were better at establishing outside collaboration with users and suppliers. As RothweU and Gardiner s have shown (in another article in this special issue), this provides invaluable information for product design-- both hardware and software in the case of electronic office equipment.

The four companies all employed consultant industrial designers, primarily to style the external casing of the companies' products. Although companies A and B recognised the wider role of the industrial designer of dealing with 'human interface' problems, none of the companies subscribed to design magazines and they did not expend much inhouse effort to solve the human interface design problems posed by this aspect of the product. Further, the companies' literature claims that their products are 'ergonomically designed', yet none of the four companies employed an ergonomist. The industrial designer was expected to have ergonomics expertise, even though industrial designers may not be formally trained in ergonomics.

In general, all the companies placed greater emphasis on the electronics design and software design than on designing the hardware for ease of use and for require- ments such as colour and visually appealing style. This emphasis on technical design and the lack of attention to design for the user and for the market is a significant

Table 5. Key factors for successful design of IT products

Company Factors A B ( ~ l )

Close collaboration with users and ~/ / X X distributors at early design stage

Good contacts with suppliers to take , / , / X X advantage of 'leading edge' technology

Integration of design activities with , / , / X X marketing and production

Commitment to design activities at , / , / , / ¢" high level in the company

Products commensurate with user needs O O X X for visually appealing and ergonomically suitable products

Key , / Yes X No O Partially

factor contributing to the 'crisis' in the UK IT industry expressed by NEDC m. Improving the design of UK IT products would help to increase the market share of UK suppliers, which is essential if the basic research effort being supported by the Programme for Advanced Information Technology 3 is to be commercially viable.

ACKNOWLEDGEMENTS

The author thanks Robin Roy, Co-ordinator of the Design Innovation Group (DIG) for his helpful sugges- tions and comments on the preparation of this paper. Thanks too to the other members of DIG: Georgy Leslie, John Towriss and Viv Walsh, and to Olive Ainger who typed the article. The Joint ESRC - SERC Committee and the Open University have funded DIG's study.

REFERENCES

1 'Crisis facing UK information technology', NEDC In]orma- tion Technology EDC Report, NEDC, London (1984)

2 'A strategy for information technology', a report to NEB by Pactel, National Enterprise Board, London (1981)

3 'A programme for advanced information technology', The Report of the Alvey Committee, Department of Industry, HMSO, London (1982)

4 Feigenbaum, E A and MeCorduek, P The fifth generation, Pan Books, London (1983)

5 Walsh, V and Roy, R 'Plastics products: good design, innovation and business success', Report DIG-O1, Design Innovation Group, The Open University, Milton Keynes, UK (1983)

6 Walsh, V 'Plastics products: successful firms, innovation and good design' Design Studies, Vot 4 No 1, (January 1983) pp 3-12

7 Bruce, M 'Approaches to the successful design and innova- tion of information technology: focus on the UK industry' Dataprocessing (September 1984) pp 17-19

8 Rothwell, R and Gardiner, J P 'Tough customers: good designs' Design Studies Vol 6 No 1 (January 1985) pp 7-17

40 DESIGN STUDIES