Hosted by Using PLM Software to Boost InventiontoInnovation
Hosted by Using PLM Software to Boost Invention-to-Innovation Margins Navi Radjou Vice President Forrester Research
Hosted by Theme Firms need a new approach to convert inventions into profitable innovations
Hosted by Firms’ Challenge: How To Convert… Eureka! ? Wow!
Hosted by Forrester defines innovation as occurring ► When inventions intersect a business process and change the way something is done, experienced or created
Hosted by Agenda l Why innovation matters? l What’s wrong with today’s innovation model? l How can Innovation Networks fix it? l How can Product Lifecycle Management (PLM) help firms accelerate their inventionto-innovation cycles? l Q&A
Hosted by Why Innovation Matters?
Hosted by CXOs Believe In Economic Recovery Base: 7, 300 global senior execs; Source: Mc. Kinsey & Company
Hosted by CEOs’ Confidence in Revenue Growth is Growing Source: Pw. C’s 7 th Annual Global CEO Survey, 2004
Hosted by Responsiveness + Innovation = Key to Sustain Customer Loyalty and Growth Source: CEO Challenge 2004, The Conference Board
Hosted by CEOs’ Preoccupation No. 1: (Organic) Innovation Base: 650 global companies; Source: Deloitte Research
Hosted by Firms Strive To Become More Innovative
Hosted by Innovate or Die! Customers l Atkins dieters Competition l Drug = 3 month market exclusivity l Baby boomers Compliance l FDA l Sarbanes-Oxley l Generics l Wal-Mart l Emerging markets l India and China l China’s dietary standards
Hosted by India & China Move Center Stage in Pharma Innovation R&D spending as % of sales Source: Financial Times, August 18, 2004
Hosted by India and China Will Climb up the Innovation Ladder “We aim to have 40% of our revenues from innovative products by 2012. ” Dr. Brian Tempest CEO, Ranbaxy Source: Financial Times, August 18, 2004
Hosted by Size Doesn’t Matter… l Western drug makers spend 15% revenues on R&D l Indian companies spend 5% revenues on R&D l Entire revenue of Indian drugs industry = $7 billion (less than Pfizer’s R&D budget) BUT… l Drug development in US = $800 million l Drug development in India = $50 million
Hosted by …. If you Know How to Collaborate, you Win (WHO you know is more critical than WHAT you know) l Developed by Tata Consultancy Services (TCS) in. . . l Collaboration with 18 public-sector R&D bodies l Cost = a fraction of that charged by US vendors
Hosted by What’s Wrong With Today’s Innovation Model?
Hosted by Bearish Supply is no Match to Bullish Innovation Demand
Hosted by Firms are no Longer Pumping Billions of Dollars into R&D
Hosted by Firms’ Innovation Engine is Stuck in Low Gear Innovation 1. 2. 3. 4. 5. 6. One-way customer relations Ivory-towered R&D labs Organizational silos Risk-averse top management Unskilled partners Limited local talent Market irrelevant inventions Slow rate of invention No collaborative idea generation Eschews radical innovation Fail to keep pace with innovation Slow the innovation cycles
Hosted by CIOs Have Relinquished “Innovation Catalyst” Role
Hosted by Short-Sighted Public Policies Drain U. S. Talent Pool
Hosted by How Can Innovation Networks Fix it?
Hosted by Firms Need a New Market Structure That Can Re-establish Balance in Innovation Supply/Demand
Hosted by Innovation Networks: Firms seamlessly weave internally and externally available invention and innovation services to optimize the profitability of their products, services and business models
Hosted by Best-known Innovation Network: Hollywood Writers Actors Studios/ Producers Directors Film Musicians Talent agents Technicians
Hosted by Innovation Networks Consist of Four Types of Organizational Models
Hosted by Procter & Gamble Plays Multiple IN Roles ’ Interaction patterns within P&G’s Innovation Network P&G 2 4 3 Collaboration Scenario Inventor Transformer Financier Broker
Hosted by P&G Kicked its Innovation Engine into Full Gear Innovation 1. 2. 3. 4. 5. 6. One-way customer relations Ivory-towered R&D labs Organizational silos Risk-averse top management Unskilled partners Limited local talent Market irrelevant inventions Slow rate of invention No collaborative idea generation Eschews radical innovation Fail to keep pace with innovation Slow the innovation cycles
Hosted by Innovation Networks Swell the Supply Base for Talent and Ideas 1. Contract research labs 2. Academia 3. Military 4. Competitors 5. Customers 6. Free agents
Hosted by Industries Most Impacted by Innovation Networks l Electronics l Software l Financial services l Pharmaceuticals l Medical device l Consumer goods l Chemicals l Aerospace and defense
Hosted by How can Product Lifecycle Management (PLM) help firms accelerate their invention-to-innovation cycles?
Hosted by Firms Rate Their Innovation Performance as So-so
Hosted by Firms Need a New Strategy Business goals and objectives Networked Innovation
Hosted by Networked Innovation: The networking of internally and externally available invention and innovation services to develop and market customer-valued products and services
Hosted by Firms Need New Processes Strategy Business goals and objectives Process Procedures and business rules Networked innovation processes
Hosted by Process Requirement No. 1: Customer Engagement
Hosted by Process Requirement No. 2: Source and Market Anywhere
Hosted by Process Requirement No. 3: Responsiveness
Hosted by Firms Must Deploy “Networked Innovation” Processes
Hosted by Networked Innovation in Action: IBM
Hosted by Firms Need New Governance Structure Strategy Business goals and objectives Process Procedures and business rules People Organizational structure, skills and incentives
Hosted by Firms Lack Formal Governance that Could Foster Disruptive Innovations
Hosted by The Rise of CIOs: Chief Innovation Officers l Cargill l Pepsi. Co l Coca-Cola l Wrigley l Humana Dr. Carol Pletcher Cargill Innovation Officer
Hosted by Firms Must Retool Innovation Metrics and Incentives 1. From supply push to demand pull 2. From patent hoarding to uninhibited IP licensing 3. From not-invented-here to best-fromanywhere 4. From process-efficiency to market responsiveness 5. From technology prowess to customer value creation
Hosted by Firms Need New Technology Strategy Business goals and objectives Process Procedures and business rules People Organizational structure, skills and incentives Technology Applications and infrastructure
Hosted by Networked Innovation in Action: P&G
Hosted by Innovation is Key to Success of Firms… and Countries
Hosted by “Innovating for Growth” – Theme of Forrester Forum Innovating for growth — • Accelerate your invention-to-innovation cycle. • Discover how to tap into new technologies, processes, and governance models
Hosted by Thank you Navi Radjou 617 -613 -6119 nradjou@forrester. com www. forrester. com Entire contents © 2004 Forrester Research, Inc. All rights reserved.
Hosted by Related Research l. June 17, 2004, Forrester Big Idea “Innovation Networks” l. June 24, 2004, Best Practices “Networked Innovation Drives Manufacturers’ Profit” l. June 30, 2004, Trends “Firms Confront Growing Innovation Demand” l. January 6, 2004, Brief “Technology Innovation: Q 1 2004” l. August 18, 2003, Brief “CIO’s: Break The “IT Isn’t Innovative” Stereotype”
- Slides: 51