In 2019, 41 percent of product companies wanted a next-gen portfolio of more than 50 percent by 2022. However, our recent research found that many companies are struggling to build successful businesses with next-generation products. Issues with ways of working, product development, product design and governance are hindering their efforts. By analyzing these challenges, we identified four operational course corrections to deliver the product experiences customers now expect: revise, rethink, refocus and retool.

By Phil Vann, Raghav Narsalay and Morgan Mullooly 

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In 2019, 41 percent of product companies were already eager to have smart products account for more than 50 percent of their portfolio by 2022.

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The unfortunate truth for most product companies is their smart connected product strategies are failing. Too many see their new connected products as simply an extension of their current portfolio. Our research found two-thirds of product companies are working within the constraints of existing operating models rather than evolving them. Therein lies the problem.


Putting experience first

This lack of progression in portfolios impacts the entire organization across the workforce, product development, product design and post-launch governance. In turn, these issues affect companies’ ability to keep customers satisfied through innovative smart products and services. And unsatisfied customers can result in low adoption, negative reviews and brand damage.

The trick is to take an experience-first mindset—the experiences customers have when using products determine if they will embrace those products. And their experiences provide the data needed to fuel feature development, future product iterations and more personalized customer experiences.


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The four operational course corrections that product companies must make to become experience-led businesses.

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Our research found that poor product experiences are an effect of poor product operations. For companies to exceed customer expectations, they must revise, rethink, refocus and retool operations.


1. Revise your ways of working

It’s time to move away from existing organizational cultures to a workforce with vision-led modern engineering behaviors. Product companies must empower their people to use new technologies in support of experience-led business. They must think big, and everybody in the organization should rally around the goal of building connected products customers will love.

A culture reboot is needed too. This is achieved by adopting an agile approach to physical hardware development. An important part of this is to first benchmark the maturity and productivity of the current product innovation organization. This will help quantify R&D effectiveness against the competition.

To support new customer experiences, multiple business functions must be in constant contact with one another to exchange information and ideas—getting more of the organization involved will increase the value of the return. Finally, product companies should start small and establish next-gen product hubs. This is to create a segment of the organization that can develop smart connect products with lower risk and cost, at a higher value.


2. Rethink your old product management doctrines

Holistic product development principles focus on who the product is for and the experiences it can provide. This is vital to keeping customers engaged and satisfied over the course of the product’s lifetime. Product companies should balance the trade-off between time-to-market for a better understanding of their customers’ needs. They must aim to augment one-off hardware margins with repeatable experience-driven service revenue. And they need to understand that accelerating time-to-market will only lead to failure.

The focus shift from time-to-market to time-to-value is essential. Putting human-centric design principles at the center of next-gen product development process is key to ensuring products exceed customer expectations. Syncing the tech, data and human agenda will equip product companies with everything they need to persuade customers to embark on a journey with their smart connected products. Product companies should also deprioritize bill-of-materials and hardware margins by harnessing experience-led recurring revenue from new service-, platform- and ecosystem-based business models.


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3. Refocus on experiences rather than core technology

Smart connected products develop over time and the first iteration of the product will be distinct from its third. This is why it’s not a good idea to focus investment on technical differentiation.

Product companies should instead focus on experience differentiation rather than technology differentiation by building a digital chassis—precooked and ready to plug in libraries and reference architecture. Product companies that use a digital chassis can avoid wasteful reinvention. They’re positioned to quickly scale smart connected product engineering and enjoy improved productivity, reduced total lifetime costs and reduce time-to-launch. And they’re able to focus solely on differentiating their core product attributes. Avoiding wasteful reinvention also helps embed environmental sustainability.

This is the next wave of transformation for product companies and calls for product design methods that achieve sustainability. End-to-end action is needed, with a new level of focus on the design phase—the right design choices result in less resource consumption during product development.


4. Retool to sustain and maintain living products 

Proper budgeting, planning, and investments in experience engines are central to maintaining and enhancing product experiences. In addition, so is proactively servicing the experience. Product companies should maintain the experience with post-launch testing and analyze CX and product performance data. Analytics identifies what needs improvement—product companies can monitor product usage and performance and leverage feedback for future iterations.

But feedback must be considered by engineering teams during the R&D phase. Over-the-air firmware updates are also an important part of servicing the experience. Outside of the mobile devices sector, firmware updates for smart connected products aren’t common. Firmware updates enable feature and function releases post-launch, which keeps users satisfied with the product service and can provide new opportunities for engagement. Adopting product-retirement systems and processes is a necessary step in meeting the sustainability expectations of customers.

Product companies must put systems and processes in place to ensure the sustainability agenda is adhered to at all stages. Product retirement systems enable product, retrieval, inspection and sorting for disposal, recycling, repair or remanufacture.


A smarter shift

Too many product companies are failing to meet their goal of building a next generation portfolio. They’re constrained by unsuitable and outdated operating models, and their efforts to meet customer expectations with experiences that delight are unlikely to succeed. To overcome these challenges, product companies should adopt an experience-first mindset. They should revise their ways of working, rethink their old product management doctrines, refocus on experiences rather than core technology and retool to sustain and maintain their living products. Customers today expect so much more from product companies. It’s time to exceed their expectations and make the shift to an experience-led organization.


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About the authors

Phil Vann, Raghav Narsalay and Morgan Mullooly 

Phil is a Managing Director in Industry X at Accenture and leads the Smart Connected Product Design & Development offering in Europe. Get in contact with him on LinkedIn

Raghav is a Managing Director at Accenture and the Global Research Lead for Industry X. Start a conversation with him on LinkedIn.

Morgan is a Research Manager within Accenture’s Industry X practice. Meet him on LinkedIn

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