Industry Trends Customer Survey Results and Recommendations from Vector Consulting Services V
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1 Industry Trends 2016 Customer Survey Results and Recommendations from Vector Consulting Services V
2 Industry Trends 2016 Highlights Summary: Industry Challenges % 50% 40% 30% Mid-term challenges Big Data Connectivity Safety and Security Innovative Products Complexity Efficiency and Cost 1 20% Distributed Development 10% 0% Governance Others Current challenges 0% 10% 20% 30% 40% 50% 60% 70% Vector Client Survey Details: Sum > 100% because 3 answers per question were allowed. Results from all industries overlap and are thus compiled in this report. Validity big with >4% response rate of 1700 recipients. Cost and complexity remain biggest challenges across all industries. Safety and security evolved since 2015 to a major challenge. 2/10
3 Industry Trends 2016 Highlights Summary: Trends 2016 and Vector Recommendations Society and Business Trends Globalization Demographics and urbanization Value and Service Individualization Green and Security Recommendations Efficiency and Cost: Emphasize Value Complexity Management: Reduce Accidents, Control Essence Safety and Security: Systematically Manage Product Risks Innovative Products: Push Digitalization and Services Technology Trends Collaboration, i.e. crowdsourcing, computer-assisted collaboration Comprehension, i.e. big data handling, data analytics, smart data Connectivity, i.e. industry 4.0, ubiquitous mobile computing, mobile services Cloud, i.e. applications and services in the cloud, sustainability, energy efficiency Convergence, i.e. autonomous systems, mobile enterprise, pervasive sensing 3/10
4 Industry Trends 2016 Recommendations Efficiency and Cost: Emphasize Value Make value tangible. Deliver Wow! instead of me-too feature lists Boost efficiency where it matters most: Reduced rework, more verification and simulation rather than expensive validation, DevOps delivery models, collaborative engineering, team motivation. Reduce test effort, as it has biggest cost in most projects. Make verification and test an integral part of each development team. Make your suppliers become part of your value creation, such as revenue based bonus systems, and distributed innovation. Stimulus from our consulting projects: Efficiency improvement often fails due to setting fuzzy targets and not following through until sustainable results are implemented. Recommendations from our efficiency improvement projects: Set specific targets for tangible improvements on a quarterly basis, and measure teams on delivered improvements. Let teams set up their own improvement targets, which are clearly connected and traceable to your business goals. Have them establish a cost coach in each team. Use proven techniques like earned value, value stream mapping, scrum, etc. and focus on their customized implementation. Do not reinvent the wheel. 4/10
5 Industry Trends 2016 Recommendations Complexity Management: Reduce Accidents, Control Essence Challenge all new features. Typically half of the new features will not create value. Reduce life-cycle cost in different dimensions, e.g. product variants, delivery process, cost of non-quality, technical debt, and collaboration overheads. Use fewer tools in a better way. Deploy ALM/PLM platforms with best possible integration along the entire life-cycle. Stop your home-made tools. Ask your suppliers and customers where they face complexity in working with you. They know it much better and will articulate deficiencies. Stimulus from our consulting projects: Complexity like cancer grows. Clients are often not aware how to control complexity. They trap themselves saying we are too expensive, rather than implementing change. Our Vector RACE method effectively reduces complexity: Reduce Accidents (i.e., less defects and rework), Control Essence (i.e., focus on value and customer delight). Recommendations from our projects in managing complexity: Challenge complexity in each single project. RACE means culture change. Have a close look on organization structures and interfaces, be it in projects or in line organization, be it in centralized or distributed development. Unclear responsibilities and organically grown silos primarily drive complexity. 5/10
6 Industry Trends 2016 Recommendations Safety and Security: Systematically Manage Product Risks Treat product safety and cyber-security as system properties; analyze risks in terms of hazards and threats comprehensively and not just for specific functions and components. Never ever consider a product secure; out there are people who know better Collaborate closely with your customers and suppliers in order to address robustness comprehensively at its source. Use modularization, reuse concepts and early defect detection and removal techniques in order to build robustness. Establish a culture for cyber-security and safety; create responsibility. Stimulus from our consulting projects: Robustness such as functional safety or security is often perceived as creating overhead due to formalism and stubborn interpretation of standards. Recommendations from our projects related to safety and security: Utilize external expertise how to efficiently implement safety and cyber-security standards for your own specific products and services. Use consequent front loading such as requirements engineering and architecture reviews as key for robustness. 6/10
7 Industry Trends 2016 Recommendations Innovative Products: Push Digitalization and Services Service matters. Replace products with services that retain your customers. Grow IT decentral. Make digitalization part of each business process. Stimulate IT-driven innovations. Evolve centralized IT towards distributed IT competences, with non-critical operations from the cloud. Think innovative. Challenge operations and engineering to reinvent your business. What would a new competitor without legacy would do different? Where would he put his energy? What would he stop right away? Stimulus from our consulting projects: Many companies are saturated and slow. Our benchmarks show that a vast majority of the overall R&D budget intended to innovate was wasted on incremental changes. Recommendations from our innovation projects: Hire and feed creative intelligence. Stimulate employees, customers, and suppliers with creativity methods to develop and deliver Wow! Treat innovations as projects with leadership and clear responsibility, resources, budget. Get the proposals fast to your regular portfolio management process. Document and commit product targets on the basis of agreed roadmaps. Leave your labs to open innovation. Allow thinking out of the box as basis for an innovation culture. 7/10
8 Industry Trends 2016 Survey Details Survey Scope Two survey questions: 1) What are today your biggest challenges? 2) Which industry trends do you see in the near future as biggest challenges? Target audience: industry managers and decision makers Industries: Automotive, Transport, Aerospace and Defense, Energy and Environment, IT, Medical and Health Timeframe: December 2015 Method: Max. 3 answers per question including optional free field entry Confidentiality: Reply to survey was feasible without any personal identification and traceability. 8/10
9 Industry Trends 2016 Survey Details Survey Validity High response rate: 4% of all invitees participated Representative opinions: Functions which replied to the survey represent decision makers up to the CEO-Level Strong validity: 3 answers were provided in average per question Broad industry range: All industries are represented (see figure below) 9/10
10 For more information about Vector and our products please visit Vector Consulting Services Your Partner in Achieving Engineering Excellence Phone Fax
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