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9 IT Technologies that Drive Product Development

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If you’re in the IT department of a manufacturing company, this is your lucky day.

A new survey by Harvard Business Review Analytic Services has documented proof that nine IT technologies are pre-requisites for organizations that want to produce more and better new products. These technologies also drive more profitable new products as well.

Essentially, organizations were twice as likely to be highly satisfied with new product development if the IT department was a true partner in the process.

While only 23% of the survey population (1,200+ respondents from around the world) said their new product development process was good, 45% of the respondents with solid IT support said that their processes were good. And good processes lead to more and better products, and more and better value from R&D, according to the respondents to the poll, which was conducted in November 2010.

It turns out that 9 technologies were viewed as proven tools that boost new product development success:

• Design and analysis tools – your typical Cad/CAM/CAE

• Supplier management

• Product requirements management—typically in a product lifecycle management (PLM) package

• Strategic R&D portfolio management—this isn’t just a spreadsheet. Link your PLM to ERP and analytics tools and watch the business value of R&D soar

• Change and workflow management

• Regulatory compliance

• Product traceability

• Integrated bill of materials (BoM) and ERP

• Request for proposal preparation

Future App Plans

The vast majority of the respondents who are already using IT to monitor new product development say these nine technologies will be extremely or very important within two years.

IT technologies that drive product development

Source: Harvard Business Review Research Services, 2011

Note that the importance of these tools didn’t vary that much by the respondents’ size of company, geographic region or their role. The big differentiator was type of industry. Companies that manufacture high tech devices, automobiles, trucks, engines, chemicals, medical devices and other manufactured goods consider these tools even more important.

And those that weren’t already using IT to monitor new product development had a much lower opinion on the importance of these technologies. Essentially, they’re clueless about the benefits and ultimate value. This ignorance is a great opportunity for IT departments to deliver top line benefits.

Enhancing Collaboration – And Resisting It

Another area of IT that is considered crucial for successful new product development is the ability to enhance collaboration. While only a minority of companies have been relying on partners for new product development ideas and support in the past, the majority expect to be at least partially dependent on third parties in the future.

And given the increasing role of third parties, as well as the increasing role of other internal departments in new product development, it comes as no surprise that the use of IT to enhance collaboration was the most commonly cited change in R&D activities since the recession.

The rising dependence on third parties for R&D support has led to a tough dilemma for most large companies: the amount of external access to internal data and systems. Respondents showed a remarkable degree of schizophrenia about providing data to even their most important partners.

The study report notes that fewer than “four out of ten companies provide their most important partners with full access to their systems and data at least sometimes. What’s worse, only half provide read-only access to their most important partners at least sometimes.”

The conundrum presents a huge challenge and opportunity to IT practitioners and vendors. Developing the level of digital rights management to protect intellectual property while allowing unfettered access to authorized users is clearly a huge, and unfulfilled need. Ironically the DRM tools are out there, but they do not appear to be tightly integrated with the other systems.

Interested in more information about the report? The editorial director of Harvard Business Review Research Services, Angelia Herrin, gave a presentation on the survey results a few weeks ago. Here’s a video summary of her presentation on managed innovation. .

About the Survey Respondents:

Note that not only was this survey base huge, but it also represented a significant number of large companies. The average number of employees was 3,810. The average annual sales in 2009 were $1.8 billion. Note also that 36% of the respondents’ organizations had annual sales in excess of $1 billion, while 44% had less than $150 million.

Almost a third of organizations were in the manufacturing sector (30%); other industry sectors cited by respondents included professional services (17%); financial (10%); and healthcare (7%).

Around half of the respondents’ organizations were based in North America; 32% were in EMEA; 12% were based in Asia.

More than half of all respondents were in executive/senior management positions. Just over a third (36%) had other management positions. More than a quarter were in general management. Just under one fifth (19%) worked in R&D or product/operational roles. And 16% of respondents had marketing or sales roles.

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