Tech-Clarity Insight: Top 5 Misconceptions about Innovation Management Software

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1 Tech-Clarity Insight: Top 5 Misconceptions about Innovation Management Software Busting Myths to Improve Innovation, Time to Market, and Profitability Tech-Clarity, Inc

2 Table of Contents Executive Overview... 3 Why Innovate?... 4 Why Enable Innovation?... 4 The Five Myths about Innovation Management Software... 5 Myth 1 Process and Software Will Stifle Innovation... 5 Myth 2 Innovation Begins and Ends with an Idea... 6 Myth 3 PPM is Only for New Products... 7 Myth 4 Innovation Management Software Will Slow Us Down... 8 Myth 5 We Don t Have Time and Resources to Implement... 9 Getting Started, Practical First Steps Conclusion Recommendations About the Author Tech-Clarity, Inc. 2013

3 Executive Overview Product innovation is critical to differentiate and remain competitive in today s fastpaced, global markets. Bolstering innovation to a core competency helps manufacturers drive higher revenue, lower cost, and mitigate risk. So why is it so hard for companies to improve innovation performance and drive meaningful business value? Enabling technology helps companies improve agility, productivity, and time to market by improving decision-making, visibility, and commercialization efficiency. Innovation management software helps drive this new business value. Enabling technology helps companies improve agility, productivity, and time to market by improving decision-making, visibility, and commercialization efficiency across the product lifecycle. I am a huge proponent of tools that help innovation, explains Erik Greenfield, Senior Director of Program Management at Immucor. They are cost effective and help improve time to market. The benefits available are compelling. As Tech-Clarity s The ROI of Product Portfolio Management explains, the financial value comes from a combination of increased revenue from higher sales volume and margin lift alongside reduced costs from better resource utilization, avoiding spending on lowvalue projects, and improved efficiency. Despite the proven value of innovation management software, companies are often held back due to misconceptions. Despite the proven value of innovation management software, companies are often held back due to misconceptions. Tech-Clarity has identified five common myths that prevent or slow companies from using software technology to improve innovation performance: Process and software will stifle innovation Innovation begins and ends with an idea Product portfolio management (PPM) is only for new products Innovation management software will slow us down We don t have the time and resources to implement a system Clearing up these misconceptions allows manufacturers to put their innovation strategy into action. This paper offers insight to debunk these myths and offers practical advice on how to start improving innovation through enabling technology. 3 Tech-Clarity, Inc. 2013

4 Why Innovate? Annual reports from today s leading manufacturers clearly reflect the importance of innovation to the corporate agenda. For product-oriented companies, innovation comes in many forms. It may be new products, enhanced packaging, or creative marketing in the form of pricing and bundling. Manufacturers also benefit from innovation in production, sourcing, and supply chain processes. Companies know they need to innovate and do it quickly. You have to innovate outside of your comfort zone and be fast, everything is gauged on time to market in this fast-paced world, says Erik Greenfield of Immucor, a company with a rich history of bringing innovative products to our customers that sells automated instrument-reagents systems. Why Enable Innovation? Innovation management software is the infrastructure that helps companies generate compelling ideas, nurture them, optimize their investments, manage projects, develop products, launch them commercially, and analyze their market performance. PPM is a key component of the innovation management software suite and provides benefits including alignment with strategy, improved resource utilization, increased competitiveness, better success rate of initiatives, and improved time to market. PPM and related software technology provides the insight and visibility needed for manufacturers to make better decisions about their products and portfolios and streamline execution. Innovation management software helps companies move away from spreadsheets and ad-hoc, fragmented processes and tools. Innovation management software helps companies move away from spreadsheets and adhoc, fragmented processes and tools. We don t have an automated resource management tool so we are constantly updating spreadsheets, offers the director of business planning for a global medical device provider. It s a challenge because we spend hours and hours on it and when something changes it all has to be changed. Innovation management software allows companies to eliminate spreadsheets, automate processes, measure performance, and provide accountability. Implementing enterprise-class innovation tools helps companies grow revenue by selecting higher value products and increasing margins, reduce cost by improving efficiency, and mitigate risk. Implementing enterprise-class innovation tools helps companies grow revenue by selecting higher value products and increasing margins, reduce cost by improving efficiency, and mitigate risk. It also provides softer benefits such as improving time to market, managing relationships between projects, and ensuring alignment with company 4 Tech-Clarity, Inc. 2013

5 strategy. The software technology leads to strategic benefits and significant ROI. As the director of business planning describes, For larger NPI projects we expect to improve value through better resource utilization, and for smaller projects we can get a big benefit just be reducing meeting and reporting time. The result is the ability to make better, faster, more confident decisions that lead to higher profitability. The Five Myths about Innovation Management Software Despite the focus on innovation in today s business strategy, many companies see it as a black box. Research shows, however, that innovation can be managed and improved by implementing best practices and tools. Confusion remains, however, because of the mystique of innovation and because the explosion of social media has enabled new approaches to innovation such as open innovation and broader inclusion of internal resources, customers, suppliers, and the market. It s time to clear up the misconceptions, or debunk the myths about innovation management software. Unfortunately, many companies fear change. The majority of product-oriented companies have gotten by for years forgoing structured analysis for instinct and gut decisions. But the marketplace is changing too rapidly to continue this way and companies are expected to deliver game-changing innovations to market. It s time to clear up the misconceptions, or debunk the myths about innovation management software to set the record straight so manufacturers can move forward and take advantage of the compelling benefits available. Myth 1 Process and Software Will Stifle Innovation Some think that innovation is based on individual inspiration. They believe it demands creativity and a total lack of boundaries. While it s true that people need to be free to explore ideas, successful innovation is typically not the work of a single individual. Visibility and collaboration allow companies to generate and develop ideas and leverage knowledge from across the business and the supply chain. Innovation is a team effort and spans from the innovation strategy through commercialization and beyond. Innovation is a team effort and spans from the innovation strategy through commercialization and beyond. Innovation efforts can (and should) be directed. Ideation campaigns can align innovation with business and product strategy. This encourages people to create ideas on topics that result in products that make sense for the company to invest in. Directing creativity is not stifling it is a good use of resources. 5 Tech-Clarity, Inc. 2013

6 It is true that companies need to be careful not to add to much overhead and administration. For our new ideas we don t have a lot of structure. The side of process that could stifle creativity is fill out these 14 documents and a complete business plan, jokes the medical device business planner. Instead, technology can help get input from others, collaborate, and evolve ideas. The best ideas come from collaboration. In the same way, technology should improve visibility to information and improve analysis, not try to create algorithms to replace sound management decision-making. The goal is to enhance management experience and insight with trusted, consistent information and analytics to make better business decisions and accelerate innovation. The side of process that could stifle creativity is fill out these 14 documents and a complete business plan. Director of Business Planning, Global Medical Device Provider Myth 2 Innovation Begins and Ends with an Idea Many companies look to new software investments for ideation or open innovation without looking at the whole process. The simple truth is that great ideas alone don t make money well-developed products make money. History is full of stories of great ideas that failed to be properly developed and commercialized. Ideas need to be combined and evolved so they improve over time as ideas get additional input and feedback. Then, once they are mature, they are ready to be considered for a business case and potentially become a project with realizable business potential. Innovation software helps the organization focus and work on the right things. Erik Greenfield, Senior Director of Program Management, Immucor At that point, projects need to be prioritized for investment to take them further. Innovation software helps the organization focus and work on the right things, says Immucor s Erik Greenfield. People will work on lower-value, pet projects unless you have a tool that harmonizes and compares projects apples to apples. Corporate strategies should targets a range of ideas from strategic breakthroughs to line extensions. They need to compare the relative value of different forms of innovation but also make sure the balance is correct between them. Innovation includes design and creative and then into development, that whole process needs to be supported. Director of Business Planning, Global Medical Device Provider Finally, ideas need input from across the business to become viable commercial offerings. Product development projects require a lot of coordinated execution to get 6 Tech-Clarity, Inc. 2013

7 products right and to get them to market quickly. Innovation includes design and creative and then into development, according to the director of business planning. That whole process needs to be supported. Selecting and developing innovative ideas or products can be improved with discipline and end-to-end visibility. As Tech-Clarity s Improved Portfolio Decision-Making concludes, Companies gain significant value from PPM by developing optimal portfolios, ensuring they are enabled with the right resources, and improving project execution. They are also extending to a more fully integrated innovation process including idea management, gaining higher levels of value. Myth 3 PPM is Only for New Products Most companies recognize that selecting the right products is key to making smart investment decisions. Portfolio management helps balance and align limited resources and budget with the right projects. But many companies choose to focus PPM efforts solely on determining new product portfolios. Manufacturers should evaluate existing products as well, determining which are due to be updated, when to extend a product line, and when it is time to sunset offerings. A broader view of PPM helps balance investment and resources between maintaining existing products and line extensions with dedicated capacity for more significant innovation. A broader view of PPM helps balance investment and resources between maintaining existing products and line extensions with dedicated capacity for more significant innovation. PPM can also help manage in flight product development projects. Evaluating products that are new to the portfolio and those in development gives companies the ultimate power to ensure that their resources are working on the highest priority products, and to be agile when prioritizing so they can adjust quickly as market opportunities change. We get to places in our projects where the market changes or some assumptions in our business model have changed and it s no longer valid, offers the director of business planning. You have to measure and evaluate along the way so you know when to kill things. PPM can help companies develop an ROI for a product at any point of development, updating the business case and replacing assumptions with facts as the project unfolds and they learn more. PPM can help companies develop an ROI for a product at any point of development. PPM can also manage the complex relationships between projects. This is critical for coordinating launch schedules of related offerings. It s also important to manage 7 Tech-Clarity, Inc. 2013

8 technical, platform, and R&D investments in addition to new and existing products to balance investments and monitor project contingencies. Myth 4 Innovation Management Software Will Slow Us Down Some fear that overhead will bog down resources that are already busy. Actually, the opposite happens because of better focus and improved resource management. Inevitably software will speed up innovation, you gain back efficiencies ten-fold by automating, explains Erik Greenfield of Immucor. Effective innovation management software keeps people on track, helps manage risk, and identifies issues sooner so they can be resolved. It also allows companies to tap a broader knowledge base to find answers fast to keep projects moving. Inevitably software will speed up innovation, you gain back efficiencies ten-fold by automating. Erik Greenfield, Senior Director of Program Management, Immucor Innovation management software also helps level out resource allocations and ensure that people aren t thrashing by spending insignificantly small amounts of time on too many projects. As the business planner says, PPM allows you to do more with the people you have by better utilizing resources. Part of this is from having the confidence and data to stop projects that aren t producing but continue to consume resources. According to The ROI of Product Portfolio Management, this results in higher levels of profitability, by making better and more timely decisions to correct or cancel product development projects with limited return. You have to be able to analyze programs for what they are, says Immucor s Erik Greenfield. You can very quickly realize projects aren t going to pan out and reallocate resources to focus on ones that will deliver and result in a better product. It used to take us a really long time to get to the information we need. Now we have faith in the data, and we can get it in a matter of minutes. Process Engineer, Large Insurance Provider Innovation management technology also improves decision-making by streamlining the flow of information and getting people away from error-prone spreadsheets that don t scale. Too often portfolios take too long to update so people work off of old information. Lack of timely data delays decision-making and erodes the credibility of the information. Automation improves data-gathering efficiency and reporting to allow timely decisionmaking while reducing administrative burden. Our epiphany moment came when we could make an adjustment to an entire portfolio and actually get to the data quickly, explains a Process Engineer in a large insurance provider responding to a recent industry 8 Tech-Clarity, Inc. 2013

9 survey It used to take us a really long time to get to the information we need. Now we have faith in the data, and we can get it in a matter of minutes and that means datadriven success for us. Myth 5 We Don t Have Time and Resources to Implement Many companies feel they are too busy to improve their performance by implementing innovation management software. Executives need to be proactive in order to be a steward of product innovation and company resources. Otherwise they are simply wasting precious time and investors money. You have to get the right organization and processes in place, but one of the most overlooked parts of innovation is the software, says Erik Greenfield of Immucor. One of the most overlooked parts of innovation is the software. Erik Greenfield, Senior Director of Program Management, Immucor So why do companies wait? Some are concerned that they don t have an effective process and it will take a long time to create one. But innovation management technology, particularly PPM, is a mature discipline and software market. Manufacturers can readily leverage existing best practices and templates embedded in innovation software tools. Today s systems include a lot of best practices, says the director of business planning. Improving Portfolio Decision-Making supports this, Today, companies can quickly adopt best practice processes and tools to gain rapid value from PPM. As they learn more, they can fine tune criteria and metrics to gain higher levels of value to improve over time as long as they have the right, integrated infrastructure in place. Be realistic and don t boil the ocean, start small and be successful. Project Management Director, Large Consumer Products Company Many product development leaders also assume that they need to take on the entire innovation process at once. This isn t realistic. While companies should take a holistic look at their processes and select solutions that can scale to their needs, they should start small. Our pearls of wisdom for someone just starting out is to be realistic and don t boil the ocean, shares Monica Alderson, Project Management Director for Hallmark, Inc. If you can find a few people doing it well on spreadsheets, get them involved in your proof of concept for implementing enterprise software to help champion it, start small and be successful. There are more options available such as software-as-a-service (SaaS) or cloud offerings that require far fewer resources. 9 Tech-Clarity, Inc. 2013

10 Another reason some delay improving their performance with innovation management software is lack of technical IT resources. Fortunately, the market has evolved and there are more options available such as software-as-a-service (SaaS) or cloud offerings that require far fewer resources. Cloud solutions can help companies take advantage of business opportunities quickly without waiting for availability from IT finds Tech- Clarity s Assessing the Cloud PLM Opportunity. Some even offer managed services to help maintain and support the system without the need for internal resources. These solutions can also result in faster, lower risk, and higher ROI implementations. The Tech- Clarity report concludes, Cloud solutions are easier to embark on and offer lower business risk because they require no capital expenditures, no depreciation, and lower sunk costs. Getting Started, Practical First Steps With these misconceptions cleared up, manufacturers can take advantage of mature software with best practices. They can learn a lot from others that have implemented innovation management software in the past. Again, it s important to start small. I have learned from experience you have to take baby steps, advises the director of business planning, You can look at the core value of PPM resources, scheduling, and financial reporting then roll out portfolio planning and ideas. It s important to start small, but it s also important to have a technology roadmap that supports the big picture. It s important to start small, but it s also important to have a technology roadmap that supports the big picture. Manufacturers can use proven solutions that can support their full vision, and those that can be readily configured to meet company needs without customization. We don t want to develop tools, we want to adapt tools that are already out there, says Erik Greenfield of Immucor. We want something modular that can grow with our organization. As Improving Portfolio Decision-Making suggests, Companies can quickly adopt best practice processes and tools to gain rapid value from PPM. As they learn more, they can fine tune criteria and metrics to gain higher levels of value to improve over time as long as they have the right, integrated infrastructure in place. In addition to leveraging industry software, it s important to target the right initial project. Find a real problem or opportunity to improve. For example, identify what part of the innovation process or pipeline would offer the highest value if it was improved. Also, find something with a strong champion to ensure executive support. It s important to set reasonable goals for improvement and measure them. The initiative should provide measurable improvements within days. 10 Tech-Clarity, Inc. 2013

11 Conclusion Innovation drives important business value and is critical to survival for today s manufacturer. Innovation management software provides the tools necessary to significantly improve innovation. The technology improves visibility, leads to better decision-making, and accelerates time to market. Clearing up misconceptions about innovation management technology allows companies to adopt PPM best practices to achieve higher revenue, lower cost, and reduced risk. Recommendations Based on industry experience and research for this report, Tech-Clarity offers the following recommendations: Recognize and clear up the misconceptions surrounding innovation management software in your business Pick a reasonably sized problem or opportunity to address and set practical goals Take advantage of the body of knowledge available and don t reinvent the wheel, use best practices and templates available in today s software applications Improve innovation performance with software by starting small, but choose a technology partner that can scale to your broader needs so you can get more value over time About the Author Jim Brown is the President of Tech-Clarity, an independent research and consulting firm that specializes in analyzing the business value of software technology and services. Jim has over 20 years of experience in software for the manufacturing industries. He has a broad background including roles in industry, management consulting, the software industry, and research. His experience spans enterprise applications including PLM, ERP, PPM, quality management, service lifecycle management, manufacturing, supply chain management, and more. Jim is passionate about improving product innovation, product development, and engineering performance through the use of software technology. Jim is an experienced researcher, author, and public speaker and enjoys the opportunity to speak at conferences or anywhere he can engage with people with a passion to improve business performance through software technology. Jim can be reached at You can read additional research, watch Tech-Clarity TV, or join Jim s Clarity on PLM blog at You can also follow Jim on Twitter watch him as a dueling analyst in the Tech4PD web show on Engineering.com, or find Tech-Clarity on Facebook as TechClarity.inc. 11 Tech-Clarity, Inc. 2013

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