The ability to maximize the impact of product innovation has never been more important. And to accomplish this goal—getting desirable products to market faster and at the right price—businesses are spending more than ever on R&D. For some industries, like high tech and biotech, the outlay for R&D can top 20 percent of revenues, according to Accenture research.
Yet many companies still struggle to make the most of their R&D investments, which total a whopping $680 billion annually for the 2000 largest global public companies. We also found that only 30 percent of executives are “very satisfied” with their performance in converting ideas into market-ready products, services or business models. Just 21 percent believe they have an effective process for capturing ideas from outside their company. And 28 percent cite lateness to market as a key reason for product innovation failure.
That’s scarcely surprising when you consider that many companies are still leveraging a linear, sequential model for PLM.
Such models, where the multiple processes and systems live in silos, inhibit the flow of relevant information needed to optimize product development. Engineers, for example, are often disconnected from the new-product introduction process. As a consequence, new-product launch teams don’t always hear about critical last-minute design changes. And because vital insights are not shared, the solutions that eventually emerge from this fragmented system just aren’t meeting customer expectations for innovation and relevance. Moreover, because of this linear approach, product launch is often delayed.
But our experience indicates that a digital model could significantly increase the efficiency and effectiveness of PLM processes—and thus deliver substantially higher ROI on R&D.
Top performers are taking PLM to another level. They have started to recognize that a digital approach can boost the effectiveness of the PLM process dramatically. These leaders understand that digital technologies—social, mobile, analytics and big data, and cloud—can drive significantly more rapid, scalable, intelligent and connected PLM by helping to link all functions and constituents in an efficient network. (see chart)