Costs and revenues can be significantly impacted by information technology investments in product development. In fact, according to Accenture, research and analysis businesses are spending more on product development than ever. For the 2,000 largest global public companies, research and development spending exceeds $680 billion.
This holds true for a range of industries such as aerospace and defence, apparel, automotive, consumer electronics, consumer packaged goods, consumer durable goods, industrial products, oil and gas, semiconductors, and software.
But while spending is robust, returns on those investments are not nearly as strong as they should be. To improve investment returns, companies need leverage IT to overcome three challenges:
- siloed groups and linear development processes spanning numerous point solutions;
- lack of access to, and governance of, development data; and
- minimal integration spanning software and hardware development.
These challenges to overcome silos and limited linear processes can be overcome through greater investment in Digital Product Lifecycle Management (Digital PLM), elevating product development processes to higher levels of efficiency, productivity and intelligence. Compared with the linear model, Digital PLM enables more direct and interactive information flow between functional teams and processes during development, resulting in smarter decisions based on sharper insights. For example, companies can develop innovative ways to manufacture products to reduce vulnerabilities and errors, accelerate products to market at lower costs, and improve product quality.
Leading CIOs and product development groups understand that digital technologies – social media, mobile, analytics, big data, and cloud – can generate more rapid, scalable, intelligent and connected development by aligning all functions and constituents efficiently. Capitalising on social networks, for example, companies can solicit their customers’ ideas and feedback about how to improve products.
Supporting the development of products that contain software and hardware can also be a challenge, but supported by the Digital PLM underlying architecture, companies can implement Unified Application Lifecycle Management + Product Lifecycle Management (Unified ALM+PLM) into their development processes. Unified ALM+PLM combines strengths of ALM tools including managing requirements and features, as well as managing test cases, test results, defects and code. This architecture integrates them with the strengths of PLM tools that manage engineering changes, product configurations, parts compliance, design files, and bills of material.
This approach takes the best from existing software (ALM) and hardware (PLM) management and blends them into a single set of processes, one data model and synthesized tools. The goal is to maximize R&D efficiency and effectiveness. Unified ALM-PLM can improve time to market for new products, support better communications across the product team, and improve product development efficiency.
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.
Kevin Prendeville is a Managing Director in Accenture’s Product Lifecycle Services business. He can be reached at [email protected].