20 April 2010

High tech and electronics companies compete in the fastest-moving industry in the world, where the ability to innovate is central to success. However, with new ideas coming in thick and fast, choosing the right products to go to market with can be a difficult process. Jasmine Yalds finds a solution.

Since the invention of the light bulb, through to the more recent creation of the MP3 player, innovation has been and will continue to be the lifeblood of high tech and electronics (HTE) companies. However, in a world where customers are fickle and competition is rife, thinking up and executing new ideas that are right for an ever evolving marketplace can be extremely difficult.

Simon Floyd, global industry technology strategist for product lifecycle management (PLM) at Microsoft, claims that customers have never been more demanding. “Customers have a lot of envy, and if there’s something on the market that is fashionable, then they will want it,” he says. “Manufacturers therefore need to fulfil customer demand while at the same time coming up with ideas that aren’t just a carbon copy of other products on the market.”

But working out what customers want is a challenge in itself. Don Richardson, Microsoft’s senior director for global innovation and PLM industry strategy, acknowledges that customers have many different platforms to voice their opinions. “This is especially true when you consider the rise of social networking, blogging, and other social media that have emerged as a result of Web 2.0,” he says. “Manufacturers are increasingly trying to find ways to capture these opinions.”

It’s not just customers that want their opinions heard. Many employees throughout the manufacturing operation, which may span several countries, have ideas and suggestions about how to take a product forward. Manufacturers need to find a way to not only capture these ideas, but quickly decide which ones have the most value, which align with corporate goals, which should be funded and whether rebalancing is needed.

Without a doubt the management of the innovation process across a network of suppliers in a highly secure and collaborative way is critical for success.

Sanjay Ravi, Microsoft Hans van Eck-Casteels, vice president at portfolio, programme and enterprise project management solutions provider P-cubed, says that the constant evaluation of ideas is especially important in HTE companies, where conditions can rapidly change and yesterday’s can’t-miss product is obsolete before its introduction. “The ideation to market cycle time has gone from years to months, and now to just weeks,” he explains.

Laurent Cherprenet, general manager for the high tech industry at Dassault Systèmes, says that with this in mind companies have to catch the wave and ride it or else lose the window of opportunity and end up in financial trouble. “HTE manufacturers are under relentless pressure to provide a mass volume of innovative and complex products in very short time cycles, at a reduced cost, and with the highest quality possible,” he says. “As time goes on, this process is only going to get more complex due to fast evolving processing power, product miniaturisation, digital convergence, connectivity, user interaction and autonomy requirements.”

Thomas Lantermann, technical consultant at Mitsubishi Electric Group, shares Cherprenet’s opinion, adding that as technologies get more complex, more people will be needed to work on each innovation. This calls for even more collaboration. “Take a typical mobile phone for example,” he says. “The complete product is made of many parts that cover a wide variety of disciplines from software and circuit board design to radio frequency expertise and mechanical casing. Managing the input of all these different elements and coordinating them to get the product finalised and manufactured to high standards will get more complicated as more subcontractors from different countries, time zones and with different languages get involved.”

Whether synchronous or asynchronous, collaboration is the key. Without it, companies cannot properly vet innovations, and only by bringing the best minds together can innovation be properly managed. However, Tom Shoemaker, vice president of product marketing at PTC, says that today most manufacturers have disparate, often incumbent systems. “There’s a great deal of fragmentation of IT across manufacturing operations,” he says. “And this is a real obstacle when it comes to collaboration and efficiency.”

The culmination of all these challenges is products that aren’t brought to market quickly enough, and so no longer meet the needs and wants of customers. Tom Maurer, senior marketing director at Siemens PLM, cites recent research from AMR, which highlights that the average success rate in 2008 was merely 51 per cent for new product launches and 59 per cent for modified or improved products. “New product launch success remains low across the high tech industry, indicating plenty of opportunity for improvement,” he says. “Manufacturers used to be able to start as many projects as they wanted, and to be successful on just a few of those would be ok, but in today’s market they have to be much more picky about which products they invest their resources in.”

Understanding innovation as a defined process that can be aided by technology can help companies rethink and improve how they manage their commitment to the search for the next great thing. Hence there is increased need to focus on the management of the innovation process itself.

Van Eck-Casteels explains that organisations need to “formulate to innovate” by blending the right combination of essential innovation ingredients that fit their current culture and lay the foundation for the desired culture. “Some people in large companies view innovation as another new ‘flavour of the month’ initiative that will be replaced by a new flavour focus next month,” he says. “However, the leading HTE manufacturers recognise that innovation is the most important flavour – one that will enhance the success of all aspects of their business.

“There are many common excuses for not implementing innovation management solutions, but really the only viable reason is that many innovation initiatives are not integrated with activities throughout the entire organisation,” Van Eck-Casteels continues. “In short, HTE manufacturers need to integrate to innovate.”

Sanjay Ravi, Microsoft’s worldwide managing director for the HTE industry, says that Microsoft technologies are helping manufacturers to achieve this integration. “The Microsoft platform provides capabilities to capture ideas efficiently and help prioritise and manage ‘go’ and ‘no go’ decisions,” he says. “Implementing innovation management (IM) requires companies to create collaborative teams that go well beyond design engineers. Microsoft provides underlying technology tools that speed innovation, integration and collaboration. The IM solution delivers electronic information through every stage of the product development and launch process – from research and development to engineering, through manufacturing, marketing, sales and out to the consumer. The product development teams join marketing, sales, finance, manufacturing, customers, partners and suppliers in a rapid deployment mode in order to bring the product to market before competitors do.”

Microsoft’s IM initiative is focused on helping its customers apply IT to address the challenges of innovation by delivering solutions that enable corporations to manage the end-to-end innovation process with greater transparency, coordination and discipline. Microsoft Portfolio Server is an analytics and optimisation tool that helps HTE manufacturers to select the best possible ideas to move through the process. “It’s a highly objective decision maker that highlights the ideas that best fit the business goals,” explains Floyd. “It also allows for subjective input, allowing employees to work out the risk involved in an idea that they have a lot of passion for.”

To ensure that collaborative innovation is effectively managed, Microsoft Project Server gives control and flexibility to keep management informed about project work, schedules, financial decisions, and the fast-paced changes that can occur during the innovation process.

“Furthermore, collaborative solutions based on the 2007 Office system incorporate blog and wiki communications alongside dynamic workgroup computing, which can dramatically streamline multi-company product development efforts,” says Floyd. “In addition, Microsoft Office SharePoint Server 2007 portals monitor progress against KPIs, so high tech innovators can see red flags, make fact-based decisions, and take action quickly – aligning resources to deliver products that prove to be most strategically important.”

What’s more, with the imminent release of SharePoint 2010, HTE manufacturers will be able to realise further benefits. “Social computing is intrinsic to the 2010 release,” says Floyd. “This will change the way that people think about the review process for an idea, and allow HTE companies to have a much better handle on trend. People can rate an idea as well as tag it so that they can see if it will grow or change. They can also ‘like’ an idea and make it traceable so that they can follow its maturity. The second thing that is different is that Project Server and Portfolio Server are better integrated and more simplified, with easier to use features. The new release offers more opportunities for analysis and decision making than we’ve ever seen before.”

Microsoft partners are building on these solutions, and other Microsoft technologies, to provide measurable benefits for HTE manufacturers. “Using SharePoint and Dynamics, combined with a decision-making solution like the Microsoft BI Framework, is allowing for the effective processing of innovation,” says Bjorn Kuijt, vice president of product management at To-Increase. “Having an enterprise-wide process to support the collection of ideas will drive success and improve short- and long-term bottom line results for HTE companies.”

Dassault Systèmes’ Cherprenet says that the Microsoft platform is perfectly suited to address the advanced content management and business process collaboration needs of the HTE manufacturer. “We work closely with Microsoft to deliver key collaborative platform architecture based on Enovia, leveraging state-of-the-art Microsoft technologies including Office and SQL Server,” he says.

It seems apparent that as time goes on and innovation management gets even more complex, the need for these collaborative solutions is going to be greater than ever. “As the pace of change continues to increase, innovation cannot happen purely within the four walls of an organisation,” concludes Ravi. “Without a doubt the management of the innovation process across a network of suppliers in a highly secure and collaborative way is critical for success.”

This article first appeared in the Spring 2010 edition of Prime magazine.
 

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