Why Knowledge-Enabled Product Development is Not a ‘Nice-to-Have’
By Mark E. Atkins, Chairman, President & CEO, Invention Machine
One of the top performance metrics for manufacturing organizations is the percentage of sales revenue derived from new products. This metric is used to measure innovation effectiveness and to benchmark performance against competition. It’s also used to approximate future growth and companies are increasingly reporting this metric to Wall Street and linking new product sales targets to executive compensation.
New Product Development is the Engine for Future Growth
According to the Product Development Institute, the average business attributes 27 percent of sales to three-year new products; but the top 20% of businesses on this metric see 38 percent of sales revenue from new products (with an even higher percentage of profits).
For innovation leaders, this number is even higher. Take, for example, Apple, which sees 60 percent of its sales coming from new products - products that did not exist three years ago.
Don’t Rest on Your Innovation Laurels
The growth of your organization hinges – not on cost-cutting measures - but on new and improved products.
Do you know what products you will be introducing in the three years’ time? Do you know where your competition is focusing their IP investments? Or what technologies are emerging today to impact the products of tomorrow? Do you know what consumers find lacking in your current products or those of your competition? Or what features or capabilities you might add to your existing products to bring them into new markets or extend their lifecycle in current markets?
To develop a continuous stream of winning products – ahead of competition – companies must continually:
- Generate innovative concepts for market-leading products
- Identify new markets and partners
- Get on-demand competitive and technology trends and analysis
- Connect to relevant internal and external content
- Extract solutions locked in internal files and systems
- Reuse past experience and apply best practices
- Identify and connect to experts inside and outside the organization
- Understand consumer sentiment as expressed in social media like Facebook and Twitter
- Glean insights from Big Data and other unstructured data
And, the pace of change in today’s global manufacturing environment is such that companies can no longer afford to approach product development – and the knowledge needed to inform product development decisions - in an ad-hoc, manual way.
To Gain or Sustain Competitive Advantage, Invest in Informed Decision-Making
Just as companies have automated other business processes such as Salesforce Automation (SFA), Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) in order to streamline processes and drive new efficiencies, companies must now look to inform and bring automation to product development decisions and innovation initiatives.
Beyond increasing productivity and reducing costs, companies that knowledge-enable innovation and knowledge workers – connecting them to the experts, insights, trends and know-how they need in order to bring about new and improved products – realize accelerated top-line growth and significant competitive advantage.
Hundreds of companies across the globe and across every industry are using Invention Machine’s Goldfire, the optimal decision engine, to bring intelligence, structure and automation to product development processes.
Your competition is using Goldfire to out-perform you. Learn how Goldfire can help you.