Consumer goods companies must deliver innovative products to market rapidly and frequently to stay on top. Technology plays a vital role in this task. Jim Brown, president, Tech-Clarity, and George Young, CEO and co-founder, Kalypso, combine their expertise to analyze opportunities in new product development and launch.
Can you comment on this list?
Brown/Young: The top 10 represents a number of complementary software capabilities. The solutions include innovation solutions to spark ideas, product portfolio management (PPM) to optimize resource investment, project management to guide projects through stages and gates, and formulation tools to balance competing product requirements. This list reflects today’s reality that there is no single source for a complete new product development and introduction solution. Oracle likely shows up at the top because it offers both portfolio management and Agile PLM for Process, a specialized product lifecycle management (PLM) solution for consumer goods companies. Oracle also offers a solution specific to food & beverage.
Where are consumer goods firms focusing their innovation efforts?
Brown/Young: Product line extensions are important but do not offer the same level of impact that breakthrough innovation offers. To deliver breakthrough innovation, companies have to accept higher levels of failure and uncertainty; move forward without, or against, consumer insights; and change reward and performance management systems. Few large consumer goods companies have done this. Many companies find they are better rewarded for consistency and speed of incremental innovation, and focus their efforts on incremental innovation or innovation around areas like packaging. Many look to acquisitions to deliver breakthrough innovation.
How is the product development process changing to include big data insights?
Brown/Young: Open innovation has been practiced under other names for years in consumer goods. Most get innovation insights from core suppliers, partner with retailers to understand consumer needs, and look to consumers for ideas. Consumer goods companies have begun reaching out directly to consumers via social media and the Internet, utilizing these platforms to conduct focus groups. This is less expensive and also much faster to validate and iterate product concepts than the traditional way.
How can companies collaborate to bring meaningful new products to market?
Brown/Young: The speed and frequency of new product development and introduction requires the ability to execute with confidence and include others. Innovation is a team sport; developing a successful product requires input from inside and outside of the company. Companies are leveraging new capabilities to collaborate on ideas early in the lifecycle, during product development, and while developing launch plans with retailers and the supply chain.