Many years ago Michael Lewis wrote a book titled The New New Thing. In the book he touted the rise of the Silicon Valley based companies and the glitz and flash they generated in the day. We all know the fallout from that activity but in the end what lasted were companies with the ability to consistently produce new products that meet the needs of the markets they serve or even better create a need no one realized they had. Product Innovation is the Holy Grail for product development companies. When done correctly it generates major amounts of revenue, creates new markets and completely re-energizes an organization. Without it companies become stale, their market share dwindles, their margins shrink and eventually they become irrelevant. Next week we will be presenting at the Oracle Value Chain Summit(VCS) with SubZero/Wolf and Oracle about the PLM lifecycle and its latest piece/module Product Innovation Management. It is kind of ironic that the latest component for PLM is the first step in the Product Lifecycle but given the challenges in trying to develop applications to address such a nebulous process it is understandable. Having spent some time with Oracle and getting familiar with this new module I thought it would be worth exploring the virtues of organizing product innovation into a more repeatable and consistent process. I also will review some of the potential around leveraging the theories and experience around product launch and being able to incorporate these into a piece of software. Geoffrey Moore, the author of Crossing the Chasm and Escape Velocity will be the keynote speaker at this year’s event. He has been involved with Agile PLM since back when Lewis wrote his book so he is no stranger to PLM or to Agile and it is no accident that some of his modeling approaches have found their way into the new module. This article will delve into the challenges around innovation and how PLM can be leveraged to help companies develop a more consistent and successful innovation engine and also look at the potential to incorporate best practices from the industry in making the right decisions when it comes to investing in innovation.

The Oracle take on product innovation is that companies tend to spend sizable sums on research and development but don’t get the return on their investment. They cite an IDC study that says that 66% of projects fail to meet expectations and a Business Week/BCG Survey that says that 45% of companies are dissatisfied with their Return on Innovation Spending. The challenges they identify are the generation of ideas, aligning offerings with requirements, and creating a portfolio of projects that are consistent with corporate strategy and budgets. To this end they have created a framework based on the Fusion platform that is fully integrated with Agile PLM 9.3.3 that allows users to capture ideas, create proposals based on these ideas, and fully assess the feasibility and profitability of these potential ideas before committing resources to execute on them. At a high level you are able to define a potential idea and associate critical information with it including market information, financial cost, supply chain availability and other types of attributes. Multiple people can collaborate on these ideas via workflows and add information based on their roles. Based on this data you can generate proposals that can provide financial justifications for projects and also provide different options based on cost and features. Once these proposals are created you are able to leverage built in analytics to score proposals and apply decision criteria that eliminates the arbitrary nature of most companies’ innovation approach.

Because the system is integrated with Agile it allows for the leveraging of empirical data from previous projects and companies can even source specific parts and suppliers for future potential projects. The module offers powerful BOM importing tools that will allow for multiple iterations of projects with different options that can then be re-imported back into Agile as the basis of an entirely new BOM. This functionality alone makes the module extremely powerful. Additionally, the requirements functionality is built in from the point of creating the idea and is constantly available to ensure that the feature set and feasibility and cost parameters are being met. Most systems have a separate requirements document that once created rarely sees the light of day since it is a static attachment. This requirements management capability ensures that proposals are meeting the defined requirements and it also allows for what if scenarios where requirements can be evaluated based on their impact to the project. This approach seems to make a lot more sense than how most companies work today with requirements being fished out toward the end of the project and then companies scrambling to adjust to try and meet them.

The idea behind the PLM Voyage is that as companies invest in PLM technology they will be able to leverage their information in increasingly powerful and beneficial ways. SubZero/Wolf has embraced this methodology and gains more benefit with their PLM investment with each step they make. This step by step approach will be highlighted in the presentation at the VCS with their first investment in Product Collaboration, followed by Quality, Engineering Collaboration, Analytics, Compliance, Project Management and soon Product Innovation. They recognize that by building up data sets of valuable information and then reusing this information to help them make good choices in product development they can increase their hit rate with new products while reducing the time and cost associated with launching them. The Innovation Management Module allows companies to take information like the methods in Moore’s Escape Velocity and apply them real-time to live data. It is possible to even take other theories and best practices and build them into your approach for innovation. The Innovation Module provides a framework to capture all relevant information about an idea and then develop the information necessary to truly evaluate its viability. It also provides the means to evaluate the idea against other ideas to determine who best to invest the limited resources a company has available to devote to product development. This tool gives you the means to apply decision methods like the ones sited in Chip and Dan Heath’s excellent book Decisive and to follow the guidance of Jim Collins and Morton Hansen in their book Great by Choice to “fire bullets then cannonballs”. Overall, discipline can be lacking in the product innovation approach. Its “fuzzy” nature leads companies to respond to the loudest voices of either customers or internal champions without fully assessing whether an idea meets the objectives they are trying to achieve. Oracle’s New New thing could be a substantial addition to the value chain making PLM even more critical than it is today.