Clarity on PLM

I had the chance to talk with … SAP and their customer Colgate in June, and learned that they have been hard at work improving the way manufacturers innovate. I was attending an SAP customer event on PLM to get updated on the progress of SAP’s PLM efforts. SAP continued to showcase their new PLM interfaces (now including Recipe Management for the process industries). But the thing that caught my attention most was a presentation on a newly co-developed solution for product innovation codenamed “Edison.” While this isn’t a formal SAP product as of yet, it shows some real promise on how companies can use social computing to drive innovation.

Note: Hopefully this wasn’t the only thing I learned in June, but things have certainly busy and I am behind in sharing!

What they are Doing

The solution, presented jointly by SAP and Colgate, is labeled as an “idea management” solution. To me that description falls a bit short of what they have developed. The solution handles a broad range of the innovation process, including:

• Idea Solicitation – to help target innovation as opposed to an all purpose suggestion box
• Idea Submission – to capture ideas from participants, including any supporting media they choose to submit
• Review and Processing – to help companies find the ideas they want to focus on, including search, filtering, sorting, tagging, and commenting
• Evaluation – allowing companies to score innovation and promote the good ones
• Execution – although this was a little less clear to me, this is the idea that the promoted ideas would flow into SAP’s PPM solution to turn into product development projects

The first thing that stood out to me as evidence that this was based on practical experience was that they didn’t assume that getting more ideas was better. I run into vendors all the time who like to talk about helping their manufacturing customers get more ideas. All of my research and interviews end up with the same conclusion from manufacturers: “I don’t need more ideas, I need help sorting through all of the junk to find the good ones!” Manufacturers want better ideas, and they want a way to make sense of the volumes of input they get. Kudos to Colgate and SAP for getting this right, which I have to imagine came from Colgate’s real-world experience in innovation.

Another thing I was impressed with was the objectives of the project. They set out to build something “simple, usable, flexible, and extendable.” As well thought out as the solution seems, it doesn’t appear that they over-designed it. The solution does not look or feel like SAP, but instead is a light, web-based experience. While this might not be appropriate for the highly transactional world of traditional SAP solutions, it is ideal for this application where broad use by untrained participants is a key to success. After all, you don’t want all of your innovation coming from a few trained insiders!

One final point that Colgate made which I think is important to consider, is that the solution is not only valuable in the front end of innovation but throughout the new product development process. In fact, early use of the tool at Colgate has helped solve supply chain issues like cost reduction.

Implications for Manufacturers

The use of social computing techniques to drive innovation is beginning to take shape. SAP is clearly interested in providing this capability, as are standalone innovation management solutions such as Brightidea, Imaginatik, Ideajam, and others.  Some upcoming research I will publish soon with Kalypso shows that many manufacturers are getting started in the use of social media in innovation, and those that did are going to increase usage next year. Times are changing, and it will be interesting to see who can best take advantage of this new opportunity.

So that is what I heard from SAP and Colgate, I hope you found it interesting. Who knew? I didn’t, if you did let us know about it. Who else should I be paying attention to in this space?

I had the chance to talk with … PTC and their customers at last week’s PTCuser user conference. PTC has been busy, making a number of significant announcements. I will clearly not do justice to such a big event in one short blog, but I hope to hit the highlights for you and share my thoughts on the implications.

Note: Just to be clear, this is the last PTCuser because the conference is changing and will be renamed PlanetPTC.

What I Learned

PTC is still serious about mechanical CAD. They believe that there is still innovation happening in that space, and that it will be an interesting market in the future. Good news for mechanical engineers and those that are fans of PTC CAD solutions including Pro/Engineer and CoCreate. They announced Project Lightening which is a multi-year strategy to reinvent mechanical CAD, but promised deliverables in the near term. Not much information here yet, but from conversations with PTC product managers this is a big focus area. Expect some significant focus on making MCAD much easier to use.

PTC is pushing the PLM boundaries. PTC furthered InSight product analytics by announcing product cost analytics and expanded Arbortext into service documentation and instructions. By going into areas like product analytics (particularly in areas like cost), PTC continues to push the envelope. PTC has a broad vision for PLM, and has already stretched the scope of PLM to include product documentation and engineering calculations in the past, and they don’t appear to be done yet.

PTC is making good on their Social Product Development initiative. The new SocialLink product is a great example of this. They added a new product, but also demonstrated how these new social computing capabilities will work across the entire PTC product portfolio. That is the right way to do it (in my opinion). The capabilities are generalized and part of the infrastructure (in large part thanks to Microsoft), but the application of the capabilities is happening in the solutions themselves. This allows product managers from each product line to decide how their users can benefit. Expect more here over time.

PTC has refocused on a Small to Midsize Business (SMB) PDM system – ProductPoint is no longer trying to be both a simpler PDM offering for the SMB and PTC’s answer to Social Product Development. With the introduction of SocialLink and other social computing capabilities, ProductPoint is now free to be a SharePoint-based PDM system. Good news for the SMB who doesn’t need (or can’t attain) a full PLM system.

PTC enters PPM market – PTC is launching a product portfolio management solution based on Microsoft technology. The early indications are that PTC’s solution is more focused on project roll ups and programs than decision support in product portfolios and R&D investment. Stay tuned for more on this in the future as I learn more.

PlanetPTC replaces PTCuser – PTC users have asked PTC to take a broader role and responsibility in the user event. PlanetPTC also includes a community site and virtual events like webcasts, showing that PTC really believes in the power of social media.

So that’s what I hear from PTC, I am sure I missed something. I hope you found it useful. What do you think? What else should I have asked them? What else would you like them to do?

What I learned this week … came after long reflection on my predictions for product innovation in 2010. As you may have noticed from the sparse number of posts in December, I must have been doing a lot of reflecting! I decided to look back at my 2008 research at Aberdeen Group called “The Product Innovation Agenda 2010″ to see whether or not my predictions came true, and bust those that didn’t. I hope you find it interesting. For a look at my take on this last year, please see the post What I Learned: Product Innovation and Engineering “2009 Style.”

Disclaimer on my Lack of a Crystal Ball

First, I want to say that my predictions were not based on a crystal ball or some supposed deep insight into the world of product innovation. As a researcher, I always find it better to ask the people who know the answer instead of guessing. In this case, I surveyed manufacturers about their plans for improving product innovation, product development, and engineering between 2008 and 2010. Then, I compared what the leading companies were doing – and planning to do – differently than average and poorer performing companies.

Predictions and Outcomes

Based on the prior research, here are my thoughts on where we stand as a manufacturing and engineering community against our plans for 2010:

Overall, I feel pretty good about how well the study predicted where companies would focus their efforts. Clearly companies made adjustments based on the economy, but the fact that PLM can help both the top-line and bottom-line was a big benefit.

What Did I Miss?

I missed the impact that social computing would have on product innovation processes. The report touched on open innovation and standardizing innovation processes, but I didn’t ask the right questions to see how the explosion of social networking would impact product innovation. I am not sure that if I asked the right questions that manufacturers would have been able to predict the boom in these technologies and their applicability to product development. I hope that I have made up for my miss by reporting on the trend in posts such as Going Social with Product Development, Social Computing Drives Innovation, Social Innovation in Simple Terms, and Enterprise 2.0 Adoption Study Good Sign for Social Computing in PLM. This is a space to watch in 2010 and companies plan on how to compete in 2011 and beyond.

Implications for Manufacturers

Last year I saw companies adopt a “survive and thrive” approach to innovation due to the down economy. The economic downturn forced companies to run lean and many had to downsize. But many companies I studied were keeping at least a subset of their resources on future innovation to be ready for the return of the market. I noticed that the long-term strategies for PLM were the same, but companies were shifting PLM strategies to short-term tactics to reduce cost and get the most out of existing resources.

Predictions for 2011 and Beyond

This year:

• I expect to see continued emphasis on innovation and PLM.
• I believe many companies will be picking up where they left off with PLM strategies, but maintaining their focus on keeping costs in check.
• PLM will continue to expand, as discussed in What I Learned: PLM, Please Take 3 Giant Steps Forward, and will play a large role in helping companies improve product innovation, product development, and engineering on a broad scale.
• Social computing will have a profound impact on product innovation, and 2010 will see many initiatives exploring the value that the intersection of web 2.0 technologies and process have with PLM.

So those are my thoughts on the past, present and future. I hope you found it interesting. What does 2010 and beyond look like to you?

What I learned this week … came from a blog entry by Paul Hobcraft on Innovation Tools asking “What is ‘exnovation’ and where does it fit in the innovatin life cycle?” I found “exnovation” an intriguing term and an interesting concept. And then, as usual, I tried to think about how manufacturers could apply it to their product lifecycles to enhance product profitability. I think the answer may be similar to the portfolio shift depicted in this graphic:

So What is Exnovation, Anyway?

From the blog entry (it’s short, take a quick read and please come back) I picked up a few key points that I will repeat here:

• The term is credited to “Kimberly in 1981″
• Exnovation is at the end of the innovation life-cycle where it “discards” or even purges existing practices to allow the organization to adopt different and fresh thinking to any new innovation activities.
• Exnovation gives us the opportunity to jettison what is no longer relevant and the space to create something more relevant to the current project.

I don’t have much to add in defining the term, I am sure that Paul is much more versed in innovation literature and processes than I am. So, let’s turn to my thoughts and the “so what’s in it for us?” question.

My Thoughts

As summer draws to a close, students are getting ready to go back to school and families are wrapping up vacations. This is the time to restock school supplies (or office supplies) and get back to school (work) refreshed and ready to take on new challenges. At that time, it often makes sense to clear away the clutter and get ready for what’s next. Isn’t that exactly what we need to do coming out of the “summer doldrums” brought on by the recession? What really appeals to me in the “exnovation” idea is to clear away what isn’t necessary. To me, this can include a review of practices and policies that might be outdated, but also a review of the existing product portfolio. Shouldn’t this be the time to jettison the extra baggage in the product portfolio that is holding the company back, and then focus resources on what will rebuild the future of the company? I am not saying to throw away cash cows that generate money, but maybe get rid of the sacred cows that can no longer afford to be protected. In other words, isn’t it time to prune the product portfolio to cut away the dead wood? Wow, sorry for all of the cliches, but I hope I made my point…

What’s in it for Us? (Implications for Manufacturers)

So what does this mean for the manufacturing industry? Strip out unprofitable products and product lines. Sell off product lines that have no future. Rationalize the portfolio to one that:

a) Has profitable products to keep the company going during the down cycle

b) Has strategic up-side potential to accelerate growth during the upturn

This is exactly what I have seen many companies do in what I have talked about as the “Product Portfolio Shift.” Whether you call it rationalization, exnovation, pruning, or any other name – I think this is a healthy time to let every product and product line earn the right to be in the product portfolio. That is, instead of selectively deciding what to take out, take everything out of the portfolio and then decide what you would like to put into the portfolio to build the future of the company. You just might come up with a very different set of products, and one that will drive better profitability in both the short and long terms.

So that is what I learned, I hope you found it interesting. Who knew about “exnovation,” at least by that term? I didn’t, if you did let us know about it.

I had a chance to talk with… the team at Sopheon about their recent product enhancement in the customer needs management (CNM) space. Through an OEM agreement with German based idea management vendor, Hype Software, the product portfolio management company has announced Idea Lab, an idea discovery, management, collaboration and analytic offering – areas that were partially addressed by their existing idea management offering. With Sopheon’s existing portfolio management and product planning/roadmapping strengths, these additional capabilities at the very front end of innovation give it a strong offering in the customer needs management space.

What do they Offer?
My expectations going into the meeting were that Idea Lab would be yet another idea capture and campaign management tool – but it is more than that. With its analytical and social networking capabilities, this is a rich offering when combined with Sopheon‘s portfolio and product planning capabilities. We look forward to hearing about customer successes, as the solution gains traction.

Two of the most interesting points discussed were the need to connect innovation to corporate strategy, and the ability to “develop communities around the concept.” For the latter, users have the ability to search the system for like ideas, and collaborate with people across the company who are working to solve the same problem. Really, it facilitates internal social product development: a simple way to reuse IP and innovation (perhaps in a different product group) and avoid the age old corporate problem of multiple groups working on the same thing. There are also idea portfolio analytics layered in, enabling the innovation team to filter to the best ideas, based on how each division (marketing, manufacturing, R&D, supply chain) ranks an idea; thus ensuring the entire company has a voice in what products get brought to market.

As far as connecting with corporate strategy, amen! Too often, PLM happens in a box, disconnected from corporate strategy – whether a brand new idea or (most likely) a product enhancement, it needs to be connected to a corporate goal, whether that be (for e.g.) to grow market share in X market by 10% in 2009, or increase revenues by 20%. I like the “Message from the CEO” on the front page of Idea Lab, stating the importance of finding a solution to the posed problem. One enhancement opportunity would be to be to have the CEO be specific about what corporate goal the idea would support. In other words, why should I, the employee, take the time to participate in this idea campaign?

Taking a page out of 3M’s innovation book, a nice touch in Idea Lab is the innovation recognition program. Top innovators in the company can be recognized through number of innovation credits, built up through number of ideas and comments submitted. In other words, it’s a mechanism for companies to expedite involvement in innovation through healthy competition with fellow employees.

How Does it Fit into the Ecosystem?
As my last post noted, there are few PLM and idea management solutions that see the full benefit of linking together the front end of innovation with the rest of the PLM process – where ideation is connected with product modeling, roadmapping, and requirements management. I think Sopheon realizes this – that said, you wouldn’t buy Accolade from Sopheon for your modeling, PDM, requirements management, or manufacturing process planning needs; there is still the need to integrate with a PLM system.

I like the concept of innovation governance – as noted in my last point, I believe that the creative innovation process needs to be corralled at some point into a portfolio of ideas/feature enhancements, a portfolio of products, a set of requirements, and a product roadmap. “Governance”, however, can be a scary word for front end of innovation practitioners like designers, marketers and brand managers – but what Sopheon is striving to do with Idea Lab is build the bridge from the free-form ideation process to innovation governance, not impede it.

I expect this move will spark a continued push from primary rivals Planview (which partners with Siemens PLM), and CA (with their Clarity product) into product planning and portfolio management, from their roots in IT portfolio management. These vendors with an “IT governance” heritage are competing now in, as Sopheon calls it, the “innovation governance” space.

So that’s what I hear from Sopheon. I hope you found it useful. What do you think? What else should I have asked them?