Executive Briefings

Product Lifecycle Management: Successful Product Launches Address All Requirements

Analyst Insight: New product launch success remains elusive cross-industry, with fewer than 60 percent on average considered successful in high-tech alone. Yet PLM applications have been deploying for over 10 years. Manufacturers claim time-to-market and cost benefits, so why such poor success? The answer is a combination of narrow PLM deployments and PLM providers not grasping the attention of all stakeholders.

Defining new product development and launch (NPDL), success is a bit like the tale of the three blind men touching different parts of an elephant. Each describes a different experience based upon their point of reference. When we ask companies to describe their perfect product launch, the answer will invariably differ by cross-functional role in the NPDL process. Business executives want predictable shareholder growth from their innovation investments. Yet product development may describe success as achieving technical complexity; marketing looks for product variation; and supply chain wants inventory turns through part and supplier re-use. This dilemma of silos in NPDL is the core challenge for PLM to impact total success.

Siloed implementations of PLM tend to optimize processes for certain constituents like product development or supply chain, and not necessarily both. Yet marketing executives or the CFO often can't spell PLM let alone how to derive value from the technology. An emerging area of PLM is customer needs management (CNM), which is used to ensure development of the product features the market most values. Adoption of CNM remains slow, yet our research shows that the inability to meet customer needs is often the top reason for product launch failure. Achieving success is becoming more complex with the onslaught of environmental regulations and companies expanding into emerging markets that require lower cost products. PLM technology providers must meet the broader needs of all NPDL stakeholders and manufacturers must take a more holistic view of PLM deployment to achieve product launch success.

The Outlook

In 2010, we expect PLM providers addressing holistic requirements for product launch success to lead the pack. Expect more capability supporting executive decision making in areas such as value-cost trade-off analysis of product features. Social networking will evolve to serve marketing during the less structured fuzzy front end of product development. Advanced capabilities and manufacturers taking a strategic view of PLM will drive the market this year.

Defining new product development and launch (NPDL), success is a bit like the tale of the three blind men touching different parts of an elephant. Each describes a different experience based upon their point of reference. When we ask companies to describe their perfect product launch, the answer will invariably differ by cross-functional role in the NPDL process. Business executives want predictable shareholder growth from their innovation investments. Yet product development may describe success as achieving technical complexity; marketing looks for product variation; and supply chain wants inventory turns through part and supplier re-use. This dilemma of silos in NPDL is the core challenge for PLM to impact total success.

Siloed implementations of PLM tend to optimize processes for certain constituents like product development or supply chain, and not necessarily both. Yet marketing executives or the CFO often can't spell PLM let alone how to derive value from the technology. An emerging area of PLM is customer needs management (CNM), which is used to ensure development of the product features the market most values. Adoption of CNM remains slow, yet our research shows that the inability to meet customer needs is often the top reason for product launch failure. Achieving success is becoming more complex with the onslaught of environmental regulations and companies expanding into emerging markets that require lower cost products. PLM technology providers must meet the broader needs of all NPDL stakeholders and manufacturers must take a more holistic view of PLM deployment to achieve product launch success.

The Outlook

In 2010, we expect PLM providers addressing holistic requirements for product launch success to lead the pack. Expect more capability supporting executive decision making in areas such as value-cost trade-off analysis of product features. Social networking will evolve to serve marketing during the less structured fuzzy front end of product development. Advanced capabilities and manufacturers taking a strategic view of PLM will drive the market this year.