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Should a CIO invest in product development? - PLM

R&D spending can be 20 percent or more of overall revenues.

Overview

The biggest reason to invest in product development is the amount of money at stake—costs and revenues—that can be significantly impacted by information technology investments in this arena.

This holds true for a range of industries such as aerospace and defense, apparel, automotive, consumer electronics, consumer packaged goods, consumer durable goods, industrial products, oil and gas, semiconductors, and software.

In these industries plenty is already being invested in product development. In fact, according to Accenture research and analysis, businesses are spending more on product development than ever before. For the 2,000 largest global public companies, research and development spending exceeds $680 billion. For some industries such as high tech and biotechnology, R&D spending can be 20 percent or more of overall revenues. The percentage of a company’s employees working in this area can reach 25 percent or more.

DOWNLOAD THE REPORT TO LEARN MORE. [PDF, 141KB]

Background

Too many companies still use a linear, sequential product development process spanning numerous silos of systems, departments and data. This process inhibits internal and external information flow needed to optimize product development. Engineers often become disconnected from the new product introduction process.

Product launch teams don’t hear about critical, last-minute design changes as often nor as soon as they should. Customer insights may be out of sync with functional and technical product requirements as well as test results. Products emerging from this fragmented system are unlikely to deliver on customer expectations.

Key Findings

As CIOs examine their potential corporate investment portfolio, it is important that they recognize the positive impact they can have in the product development arena and the corresponding improvement on their company’s revenues and profits. While driving change and enabling product development processes can be complex, progressive concepts such as Digital PLM, role-based product data hubs, and Unified ALM+PLM have proven to be worth the investment.



Author

Kevin Prendeville
Managing Director
Accenture’s Product Lifecycle Services business
Mail to Kevin Prendeville. This opens a new window.

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