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Mythbusting Product Innovation and PLM 2010 Predictions

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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.

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?

SPEAK YOUR MIND

    • Brad, that is great to hear. Have you written anything this you could link, or can you provide a couple of examples. That is something I have not written about extensively.

  1. Jim – I agree that PPM usage will continue to expand. SaaS offerings from leading PPM software firms lower the cost of entry to the point where you have to wonder why firms are still using Excel to manage their future.

  2. I was part of McDonnell Douglas’ Innovation Team back in 1989. Companies (including manufacturing companies) have been trying to “operationalize” innovation for decades. Some of the earliest attempts were manifested in the IBM “Fellows” program in the late 1960s and early 1970s.

  3. An innovative dimension we are not necessarily aware of is people’s expectation of the economic value of innovation, especially with the upcoming younger generations.

    Do watch the TED talk at http://www.ted.com/talks/pranav_mistry_the_thrilling_potential_of_sixthsense_technology.html

    This young smart MIT student from India shows an amazing series of innovations in man-machine interface and concludes by saying that all the software he developed to support these will be made available as open source.

    A far stretch from conventional business models (develop and protect property and leverage it for economic return) – How to respond/adapt to this potential change is a difficult, yet quite relevant question…

  4. Jim — I agree Portfolio Management and Product Quality & Compliance have become very important to executives in the last year or 2. To support this level of user you need business intelligence or decision support dashboards and analytics to support the executive team.

  5. Jim,

    Agree with you, especially on PPM. On the side of PLM-ERP integration, I do see it more as a myth rather than reality. In addition, I’d like to ask what is your view on the way, PLM will continue to adopt various Internet technologies?

    Thanks! Oleg

    —http://plmtwine.com/2009/12/27/top-five-plm-software-challenges-for-2010s/

    Internet Technologies Adoption. Majority of PLM systems was created based on previously available EDM/PDM and CAD products. Some of the products related to ERP offering inherited lots of ERP technologies. However, nature of PLM products drives Product Lifecycle Management into areas where Internet technologies demonstrated clear differentiation – scale of data management, integration, collaboration, information sharing. PLM needs to stand in front of complicated decisions about how to adopt various internet technologies to keep tecnological leadership.

  6. Guy,
    Thank you very much for pointing out the TED talk. It was fascinating, and really paints an interesting picture of the future of how we interact with technology. It is interesting that “augmented reality” also comes up in this video in addittion to Brad’s comments. I look forward to COFES to see how similar the concepts are based on the research he is doing.

    Thanks again for sharing your thoughts and the video.

    Best,
    Jim

  7. Oleg,
    I absolutely see PLM adopting Internet technologies, but even more importantly adopting the Internet way of doing business. In particular, I think we will see a lot of social computing / web 2.0 techniques adopted. The technology will play a big role in that, absolutely. But there will also be new processes and business paradigms evolving, which will be very interesting to watch. Product innovation, product development, and engineering are inherently social activities – the Internet will play a big role in extending those processes to larger, more diverse communities.

    As far as ERP-PLM integration, I think we must be talking to different people. I am seeing ERP-PLM integration becoming much more common, and I am seeing people really trying to stretch the limits. There is more in my paper on The Evolving Roles of ERP and PLM, including interviews with manufacturers of different levels of maturity in their ERP-PLM integration. http://tech-clarity.com/overviews/erp_plm.htm

    Thanks as always for your comments,
    Jim

  8. Oleg,
    Thanks for your question.

    “Talking to People” – Perhaps I understated the research I have conducted in this are. I have published several reports on this topic. For the reports at Tech-Clarity, I interviewed a number of manufacturers for each on their current and planned integration. I also spoke with a systems integrator that works closely with SAP and PLM vendors, and has done a significant amount of integration work. While at Aberdeen, I conducted one survey specifically on integrating these two systems, and included questions on integrating them in at least two benchmark studies that I can think of. I have also had many more informal conversations with manufacturers, and I am in the process of writing another paper for which I conducted several more interviews. Maybe I should be more careful not to underplay the credibility of my source research.

    “Stretching the Limits” – I am seeing the basics (release to manufacturing, engineering change) as givens (although not phase 1 of the implementation) and starting to hear about integrating a bill or process (to drive routings in addition to BOMs) and starting to develop more composite-type applications where they either pull ERP data into PLM, pull PLM data into ERP, or pull data from both into a portal or small web application. Who is doing this? Primarily larger companies. The paper referenced above has once such example, which I enjoyed because even within their (very large) company, they have different levels of maturity. Who is doing this? Today, it is primarily larger companies, although the challenge of integration has decreased dramatically with current technologies.

    Thanks for your question, and for the opportunity to clarify.

    Best,
    Jim

  9. Jim-

    Kudos for the reflective nature of this post. It’s great to see your open assesment of a past report.

    Re: PPM and the importance of socialness, you seem right on. Economic softness continues to shine a spotlight on product/portfolio resource allocation to ensure limited funds are spent most wisely. As John said, biz intelligence will be valuable. I’d expect much more to come here.

    Also, re: Web 2.0, the game changes so quickly that a 2008 to 2010 retrospective is being tough on yourself :-). Each day, it seems brings new ways to corral the collective wisdom of the masses and bring that to product innovation. I’d expect companies to make progress in the way of making practical connections that span product teams by building “communities of interest” of common skills/expertise/background.

    You discussion reminds me of the peculiar yet pervasive way the world views decisions made in absense of all data. In football for example, the same coach who goes for it and makes in on 4th and 2 deep in his own territory is a hero. Yet, in most cases, that’s a horrible percentage play.

    Oh well, my Eagles are out of it.

    Come on baseball season!

    Tom

Trackbacks

  1. […] I am not an economist, but I like the way this looks for 2010. I have also had the opportunity to talk to a number of manufacturers, and they are still very excited about PLM. I expect demand will be for core PLM, but also for other product innovation, product development, and engineering solutions as I mentioned in my post Mythbusting Product Innovation and PLM 2010 Predictions. […]

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