Why your organisation should be applying innovation management to new product development

The pressure on businesses today is intense. To remain competitive, or even relevant, organisations must have the ability to innovate and to test, fail and succeed quicker in developing a new offering and new features. New product development can provide companies with fresh opportunities and has become increasingly crucial in the modern-day business battleground.

Not only has market competition increased, but more demanding consumer requirements are forcing companies to play a trump card time and time again. This involves being able to bring out new products at a faster pace to keep up with customers’ evolving needs and expectations.

Overall, the bar for standards of quality has been raised, along with that of price, performance and time-to-market. This reality doesn’t only apply to high tech companies, with their fast-changing business environments calling for shorter product life-cycles. It is today a keystone for any company, across sectors, to ensure survival.

A McKinsey survey shows that more than 25% of total revenue and profits across industries comes from the launch of new products. For this reason, organisations are constantly looking for ways to generate and execute new product ideas, while also mitigating risk and reducing costs.

 

What is NPD and how can it benefit from effective innovation?

New product development (NPD) is a structured process that involves bringing a new product or service to the market. It can be completely original or an existing product that has been adapted and improved.

However, of thousands of products, only a handful make it from conception to market: those that deliver superior value. This is why it is crucial to understand consumer preferences, markets and competitors to truly give them what they want or need.

A structured, customer-driven methodology to develop novel products – from the perception of a market need through to the production and sale of the product that meets that need – gives organisations vital competitive advantages. This complex process requires the involvement of several different areas, from management to research and development, but also marketing, production, purchasing, quality control, sales, consumers and suppliers.

Areas involved in New Product DevelopmentThe ultimate goal is to develop products more quickly, more efficiently and with less costs, tightening processes and cutting out extra steps. The application of innovation management in product development maximises companies’ dynamic abilities to become more competitive in the market.

It involves various fronts and actors, from initial market prospection through to product development. When it comes to the production and launch of new and competitive products, continuous, efficient innovation management enables companies to:

  • Quickly understand consumer trends
  • Cover stages of a product’s life-cycle over time, ensuring sustained success
  • Get equipped to be flexible if a crisis hits
  • Be faster than their competitors in entering new markets and exploring new opportunities.

But how exactly can we bring together NPD and Innovation Management? We will see that next.

Diana Neves de Carvalho, Exago’s CEO

 

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The surprising building block for innovating in the digital age

What if we could get our people and partners to work and innovate together as one global team towards digital transformation? And to do it seamlessly across functions, regions and job titles? The scene is set in the recent Arthur D. Little report on how digital technologies will transform the way companies innovate. The research found that one of the most fundamental pillars for digital transformation lies, perhaps unexpectedly, in people’s collective intelligence.

According to the study “Innovating in the digital age – a cross-industry exploration”, 93% of companies agree that digital innovation will transform their organisation and the way innovation gets done. Almost all the participants expect to fully digitalise their innovation engine or even their entire company, yet 89% feel that current strategies are insufficient and successful digital innovation will require a new approach to innovation management.

 

Remember the human factor in digital transformation

Given this reality, the firm identified 9 building blocks that can improve the way businesses innovate. They include Big data/advanced analytics, Connected things, Cognitive, self-learning systems, Augmented reality, Virtual modelling/simulation, Additive manufacturing, Virtual workplace and eLearning.

Beyond these more technological assets, Collective intelligence/crowd-sourcing stands out as one of the most fundamental pillars and sources of innovation management in the digital age. Innovation interactions must therefore be promoted, allowing people to work seamlessly and effortlessly with anyone, anywhere.

The message is clear: in the age of digital transformation, businesses mustn’t forget that one of their greatest assets isn’t just technology, but also the human side of their organisations.

Companies can and should make people more effective innovators through a clever design of their digital environment, to leverage all their expertise and collective knowledge.

 

How digital unleashes your untapped Human Resources potential

By uniting technology and the wisdom of the crowd, gaining insights from the collective intelligence of both internal and external individuals brings a distinct benefit to the way companies innovate. While the advantages of drawing on the collective intelligence of an organisation’s workforce are well-documented, broadening the reach to external individuals through technology has also proven results for businesses today.

Looking beyond corporate walls, businesses can increase customer satisfaction, improve quality, and reduce cost and risk by bringing in and connecting stakeholders, such as suppliers, universities, labs and entrepreneurs, throughout the development process. This open innovation approach, which is enabled by specifically designed idea management tools and platforms, allows organisations to tap into the knowledge, insights and viewpoints of important external actors, building further value in their innovation programmes.

Driven by the input of both internal and external individuals, the adoption of an end-to-end business platform leads to faster and more efficient development of novel solutions, and reduced production costs through improved production output. Platforms such as Exago innovation management software can help focus a company’s collective intelligence on key business challenges, aligned with digital transformation purposes – something that innovation leaders today are discovering to ensure continuous and sustained success.

For further reading into how businesses today can innovate, take a look at our Innovation Library.
 

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