Oracle - How to take control of Product and Service Innovation guide.PDF
Your guide to a structured approach that links
innovation management best practices with
development and commercialization to accelerate
time-to-market, create a balanced product
portfolio, and achieve business advantage
HOW TO TAKE CONTROL
OF PRODUCT AND
WHY IS PRODUCT INNOVATION AND
DEVELOPMENT SO DIFFICULT IN
PRACTICE?Innovation is the growth engine of the
modern enterprise. Continuous innovation
in products and services is vital to drive
revenue growth, stay ahead of competitors,
and meet rising customer demands.
In fact, research by Bain & Company shows that, over a five-year
period, the most innovative businesses will grow 84 percent,
compared to just 28 percent for the lowest performers in innovation1
Organizations that excel at product innovation are growing at
three times the rate of those that struggle to innovate.
In this guide, we’ll look at why businesses find it so hard to get
product and service innovation right, and highlight practical steps
you can take to bring structure and control to your innovation
Developing innovative products requires a robust platform of
processes and data. But with so many people in so many different
departments involved with innovation, it’s easy for the best ideas
to go unnoticed—and worse, for poor ideas to get to market.
Employees throughout the business will often
have great ideas about how current products
and services can be improved, by adding
services onto products to support new
capabilities, as well as ideas for completely
new products. Ideas can also come from
customers, partners, and suppliers, or even
from social media platforms seemingly
unconnected to the business.
Big data and the Internet of Things also
provide great sources of innovative ideas,
but without an effective structure in place,
however, it can be very difficult to capture
and analyze ideas, identify the most promising
and profitable ones, and then develop and
commercialize them quickly and effectively.
There’s a big gap between the expected and actual returns on innovation investments:2
of CEOs say
critical to their
think their innovation
with the return
believe their efforts
to convert ideas into
new products are
97% 20% 45% 64%
1 Taking the measure of your innovation performance, E. Almquist, M. Leiman, D. Rigby and A. Roth, Bain & Company, 2013
2 Sources: News Releases and Press Articles; IDC Manufacturing Insights 2012; PWC Innovation Survey-Breakthrough innovation and growth 2013;
3. 4 5
Oracle Innovation Survey, Oracle Corporation, 2014
At the same time,
companies need to
balance innovation with
a wide range of other
as supplier relations,
and compliance with
While product development
cycles may be shrinking,
they now involve a
lot more tasks, often
and external teams
across the globe.
the impact of disconnected
processes in product
innovation and development:
of companies still use
spreadsheets to make
have no systematic
approach for assessing
project value and
have too many projects
for their available
have too many low-value
projects in their product
What percentage of projects hit their
cost and time targets?
What impact do conflicting design
and engineering changes have on
productivity and costs?
Will we meet all the regulatory
requirements in every region?
Which people and resources should
be involved with which project?
And for how long?
Are our manufacturing
partners actually building
the product we designed?
What’s the status and progress
of all my ongoing projects?
How do we relate product issues
and customer satisfaction back to
product design and development?
The traditional development model must be replaced with a model that’s fit for purpose in the
digital age—and that’s exactly what’s happening at high-performing, innovative companies.
In the past, most organizations took a
document-centric approach to product
innovation and development, with product
information scattered across the enterprise.
But the digitization of products, more
system engineering requirements, greater
regulation, and shorter product cycles, mean
that more global orchestration of processes
and information is required. In the traditional
model, there are simply too many places for
projects to fail.
Often, product lifecycle management
is seen as only relevant for the product
development department, and can be
disconnected from other lines of business.
Multiple and conflicting sources of data
continue to grow, with each department
distrusting the data provided by the others.
But product innovation and development
is an overarching task. Managing these
processes requires effective collaboration
between all lines of business—from
RD and finance to marketing and
Product development cannot be sustained
by the traditional document-centric,
distributed and disconnected approach.
It’s ineffective to work on extended
spreadsheets for simple resource planning
and time management, where data and
analysis are controlled manually.
And even if digital point-solutions are
in place, unless they’re connected to each
other it just takes too long to get a trusted
answer to questions like:
6. THE MODERN
A more effective model for product
innovation and development requires
companies to transform the disconnected
or document-centric into a connected,
Today’s top performers know that projects
must be based on unified data from multiple
sources, with orchestrated data flows,
and that development processes must be
closely tied to product and service innovation.
Innovation is faster when the development
of design concepts is closely related to
requirements and ideas. There’s a pressing
need for effective use of information on
the costs and quality of the innovation
pipeline so that elements of current
products or services can be reused.
And investment decisions need to be made
by looking at the overall innovation portfolio,
including the probability of technical and
Whether developing new products or
improving current ones, the data-centric
approach means adapting management
methodologies, as well as adopting an IT
platform that supports the product value
chain from innovation through development
to commercialization. In this way, companies
can introduce a systematic approach to
capturing, selecting, and investing in the
right ideas and product and service concepts.
With a connected, data-centric approach
to product innovation and development,
organizations will be able to:
Collect innovative ideas
from across the broader
ecosystem, including the
voice of the customer
Automate analysis from
many data sources for a
view of products
quality and automate
Take action on dialogue
and reporting from all
Gain a unified view
of innovation within
the product record
about ideas and
related product concepts
Enable project managers
to build compelling
Improve product portfolio
7. HOW TOP
PERFORMERS DO IT
DO YOU HAVE ROOM FOR
If any of these statements apply to you, then
it’s likely you can improve your process and tools
to make product innovation and development
• We have difficulty developing new products
and getting them to market
• Getting from product strategy to practical
execution is problematic for us
• We’ve seen new products fail to meet targets
• There’s no structured process for developing
new products and services
• We have many different tools that support
the product development process
• Product innovation, development and
commercialization are not closely linked
• It’s difficult to make informed decisions
about our product and service portfolio
HOW THE TOP INNOVATORS
DEVELOP NEW PRODUCTS AND
IMPROVE CURRENT ONES
The vast majority of companies that are good at
product innovation proactively match innovation
and business strategies. They respect the effort
required to generate ideas, develop prototypes, and
commercialize offerings; they recognize the trade-offs
that can throttle innovation; and they manage their
portfolio accordingly. The best innovators use tools
that help them structure the product innovation and
development process so that they can:
• Encourage creativity and systematize execution
• Attract and retain young talent by creating a
culture and a structure that enable everyone
to work on innovation projects
• Use appropriate metrics and rewards to measure
and recognize innovation portfolio.
These companies get innovative products to market
quickly and profitably by taking a formal, structured
approach that ensures concepts and products are
aligned with market demands.
Right To Market
Reduce Supply Risk
Ramp to Volume
USING TOOLS TO CREATE AN OVERVIEW
OF DATA AND INFORMATION
The top innovation performers gather all
relevant data in one system. They exploit the
possibilities of digital networks, automation,
analysis, and forecasting. Risk management,
budgeting, and resource planning are all done
automatically, based on knowledge and best
practice experience from previous projects.
Figure 3 shows how a product value chain
platform turns the chaotic structure of the
traditional model into a well-orchestrated,
manageable approach. The introduction
of such a platform is essential to manage
complex, distributed processes and collect
data from all stakeholders and value chains.
Top innovators execute product development as a structured
flow, closely related to the overall portfolio of offerings.
Figure 2 shows the improvements a controlled model can deliver,
such as a higher cash flow during each phase of the product
lifecycle and the faster release of next generation products.
9. USING TOOLS
TO IMPROVE THE
In Figure 4, we can see how modern
product development tools enable
best practices, where development is
seen as a structured chain of events,
linked together based on continuous
background analysis of available data.
CONNECTED INFORMATION PROCESS
Ideas and Work On
10. Automated tools for managing product innovation and development don’t
just help provide a better structure—they can have a huge impact in many
other ways. The best innovators use these tools to:
1. Incorporate the voice of the customer: Capture ideas from many
channels and prioritize them based on business goals. Track where ideas
come from, identify who has contributed to the process, and turn ideas into
requirements and design concepts for successful translation into reality.
2. Make well-informed investment decisions: Introduce a
comprehensive process for the orchestrated management of product
proposals, so that they can be a trusted basis for product portfolio
3. Keep a history of ideas that aren’t used: Some ideas may become
feasible in the future as markets evolve or resources become available. If
ideas are only stored on employee’s devices, when the employee leaves
their ideas will be lost to the business forever. A central history of all ideas
generated enables companies to revive old ideas or recycle components
of those ideas at any point in the future.
4. Accelerate development cycles: Product concepts can be quickly
and easily created, adapted, and redefined, evaluating the risks and the
organization’s ability to achieve the desired goals.
5. Build solid business cases: Product managers gain a 360-degree view
of budget, resources, and desired features, based on high-quality internal
and external data.
6. Create a balanced product portfolio: The product portfolio is kept up
to date automatically, and continual analysis matches current and future
products to ensure they fit with corporate strategy and market changes.
7. Minimize the risk of failure: Poor projects and ideas can be stopped
before they waste valuable resources that should be directed to projects
with the highest potential for success. With a 360-degree view of all
the information needed, such as resources required, probability of
success, and supply-chain readiness, it’s simpler to make a fast decision
to stop ‘living dead’ projects before they grow out of control.
11. 20 21
FIVE STEPS FOR CREATING STRUCTURE AND TAKING
CONTROL OF PRODUCT AND SERVICE INNOVATION
Bringing structure and control to product
and service innovation is vital—but how
does it work in practice?
Research from Stage Gate International
shows that top performers successfully
get 62 percent of their products to market,
while the worst only achieve a success
ratio of 45 percent.4
This difference may be because
top performers use a combination of
digital support tools and a structured
management approach when developing
new products that links innovation best
practices with effective development and
Project managers need effective digital
tools to successfully and efficiently:
1. Collect ideas from a wide variety of
sources to collaborate on them and
identify the best ideas to put forward
2. Manage detailed requirements after
identifying key features and then map
those requirements to concepts.
3. Develop concepts and manage related
resources to ensure that product
goals are met.
4. Create business case proposals
to trigger investment decisions.and
get the necessary project funding
5. Manage a balanced portfolio that’s
aligned with corporate strategy.
It’s easier said than done, but the most successful
companies have a process and tools to manage
the innovation pipeline. The top performers
encourage ideas throughout the extended
organization, structure the collection of these ideas,
and make innovation a part of the company’s culture.
Ideas can come from many sources today. Social
listening technologies can find ideas from external
sources, but they can also be applied inside the
company, gathering ideas from different departments
across the business.
Ideas from all these sources can be fed into a product
innovation funnel, from which the ideas that support
the company’s product strategy can be identified for
further investigation and assessment, so that only the
best ones are taken to the next stage of development.
There are many tools and techniques that can help
bring ideas to the surface. For example, good reward
incentives will stimulate idea-generation, as will
activities such as ideation workshops, innovation
labs, crowd sourcing, idea jams, and boot camps.
But they cannot be used in isolation.
STEP #1. IDEATION
12. 22 23
The use of standalone ideation tools often ends with “campaign” completion,
leaving ideas to stagnate in a repository. It’s far better to adopt a process and
solution that provide structure and management capabilities across the rest of
the innovation process. This will enable the ideas put forward to be fleshed out
through collaboration, so that well-informed investment decisions can be made.
KEY QUESTIONS TO ASK
Companies that want to improve the way
they collect and work on ideas should ask
questions such as:
• What tools do we use to harvest ideas
from internal and external sources?
How effective are they at surfacing
• Who is responsible for managing idea
collection across the business?
• Is ideation currently a standalone process?
• How good are we at identifying the best
ideas and working on them so they can be
quickly and profitably brought to market?
Every product to be developed has a set of requirements with
related deliverables. For example, a functional requirements
document will contain sets of more specific requirements,
each detailing what’s expected of the product or service that
is being built.
Typically, there will be relationships and dependencies between
requirement specifications. A certain requirement will depend
on another one, and impact another one.
For example, if requirement A cannot be completed until
requirement B is completed, A depends on B. In turn, requirement
B impacts A. This can have an impact on requirement C and so on.
A and C may also be considered must-haves, while B is only
a nice-to-have, which adds further complexity to the relationship
of the requirements.
It’s almost impossible to track and handle these complex
interdependencies without proper automated oversight that
monitors requirements management alongside the design concept.
STEP #2. REQUIREMENTS
2 As the process moves forward, approvals for requirement
specifications must be managed, while keeping an eye on the
history of requirement specifications. Requirement specifications
will also need to be closely related to the design concepts. At each
stage, collaboration across teams is vital to ensure requirements
are properly specified and the desired outcomes are achieved.
INNOVATION MANAGEMENT IN ACTION
An international high-technology
manufacturer found that poor
visibility into requirement and
product scope was increasing
time-to-market and reducing
the return on innovation.
Oracle’s cloud-based Innovation
Management solution was used
to provide clarity and visibility of
product scope and requirement
specifications, as well as what-if
scenario modeling to determine
optimal product requirements.
The company now has standardized, repeatable processes for
requirements management and design, and it has enhanced secure
collaboration on requirements across global teams.
14. KEY QUESTIONS TO ASK
When setting up a requirements management
strategy, it’s important to ask questions such as:
• How can we get better at capturing and
understanding our customers’ needs?
How do we do it today? Which solutions
do we use?
• How do we currently assess and prioritize
the requirements and features of our
products? Who makes this decision?
• What methods do we use to ensure the
products we develop meet the defined
set of product requirements?
• How do we currently estimate the scope
of our product requirements?
15. STEP #3. CONCEPTS
A key task in the innovation management
process is to manage product design
concepts. A collaborative design workspace
is necessary to generate, capture, analyze,
and approve product concepts which
are validated as meeting both product
requirements and product strategy goals.
Concepts must be traced in detail from ideas
and requirements to finished products, for
engineering clarifications, process analysis
and improvement activities. They must also
be aligned with strategic goals such as cost
reduction, partnership development, and
future technology migration. Concepts have
to be managed in conjunction with related
requirements, and must be linked to the
product record to ensure reuse of products
which are under current development
Typically, a concept is made up of a
collection of features, which may include
new capabilities or enhancements to
existing ones. As a product is developed,
some features may be tabled from the
initial product release, to be added in
Managing a collection of features provides a
way to develop a roadmap of product features
across different proposals. For example, there
may be different releases of a product, with
each release having its own proposal.
This requires maintaining a list of the
features supported in each proposal,
clearly showing which features would be
available in each release of the product.
Product managers must compare and
optimize competing concepts to support
product strategy goals, and securely share
the results with existing and potential
supply-chain partners or external design teams.
To assess a concept effectively, they need
to look at several solution alternatives,
which help compare concepts with
specifications that are “need to have”
or “nice to have”. Figure 7 shows an
example of an analysis of a design
concept comparing different variants.
Successful concept design management
supports the collaborative development
of design concepts, the association of
concepts with information held in related tools,
such as product lifecycle management, as well
as requirements management. Approved
concepts need to be transferred directly to
product development for prototype planning,
detailed design with bills of materials, and
An organization’s product portfolio will need
to consist of a roll-up of product concepts,
so that product portfolio information can
be captured through the ideation/concept/
proposal development process, and tied
to the company’s overall product strategy,
while taking the probability of technical
and commercial success and supply-chain
readiness into account.
16. Figure 7
INNOVATION MANAGEMENT IN ACTION
A lack of synchronization between
product development data and
processes made it difficult for this
global manufacturer to compare
product concept alternatives and
develop cost estimates.
Oracle’s unique Product Lifecycle
Management solution with integrated
Innovation Management will enable
the company to construct new
product concepts based on optimized
requirements and ensure concepts can
achieve measurable business goals.
Synchronized product development data and processes mean requirements
can be mapped to concepts and actual products, helping get new products
to market faster.
KEY QUESTIONS TO ASK
When considering concepts management as part of an overall
product innovation and development strategy, organizations
need to ask questions such as:
• How are designs and design intellectual property
managed today? Which design tools are used?
• Do products always meet customer requirements, and
how do we know? How is the requirements gathering
process managed today?
• How do we currently assess the suitability and viability
of the products we bring to market?
• Which metrics do we use?
• What is the current level of design reuse?
Is it a priority to improve this?
Typically, proposals which are the basis for
investment decisions capture essential information
related to questions such as:
• What do we want to achieve with the
• Are we targeting a new market, region
or business area?
• How much investment is needed?
• What return do we expect from our investment?
• What type of resources do we need?
When? And how many?
• If we go for option A, what is the trade-off
for option B and C?
STEP #4. PROPOSALS
This approach makes it difficult to
determine what’s been changed in the
document, when, and by whom. It makes
proposal management unnecessarily
complex, as different versions of the
documents may be begin worked on
simultaneously. It’s then difficult to
make investment decisions based on
the latest version of the proposal.
A connected, data-centric approach to
proposal management is far more effective.
The use of an integrated software solution
introduces a single source of truth for
information on proposals, concepts,
requirements and portfolios without
getting lost in a multitude of versions.
If required, PowerPoint and Word
documents can still be extracted
from the solution—but with trusted
and up-to-date information.
Proposals should be able to be kicked off
automatically based on the design concepts
that have been developed. A streamlined,
templates-based approach for proposal
management will help make the process
repeatable and ensure all required elements
are in place to be able to make an informed
Finally, it’s essential to link project
management to the proposal, so that if the
business case is approved, all the elements
of the proposal and its linked development
concept can automatically be used to get
the project underway immediately.
In many organizations today, the primary tools for managing the
development of investment proposals are PowerPoint and Word documents,
often sent through email. This document-centric approach is extremely prone
to errors and sending sensitive information though non-encrypted emails
increases the risk of intellectual property leakage.
18. Budgets and resources are finite, so investing in
the development of a new product means other
developments cannot be put forward. It’s vital to
manage a well-balanced product portfolio, based on
comprehensive metrics, which could include strategic
or product-related key performance indicators, as
well as measurements of financial performance.
This portfolio must be continually analyzed to ensure
it fits the company’s product strategy, as well as
the budget and resources constraints necessary to
achieve other strategic goals. With thorough analysis
of these metrics it’s possible to create a roadmap for
achieving the right product mix for the company’s
desired business outcomes.
A standalone tool for product portfolio management
will often lack a combination of business and product
analytics tied to investment decision processes.
STEP #5. PORTFOLIOS
MANAGING A BALANCED PORTFOLIO
When creating a proposal
organizations need to ask
questions such as:
• How prone are our current
processes to risk and errors?
• Do we have effective version
control in place?
• Can reviewers and approvers
easily collaborate on proposals
using up-to-date information?
• Are repeatable processes used
to accelerate development
projects for approved
19. But portfolio investment decisions must be made by incorporating all
available information—including ideas, requirements, and concepts—
so that the portfolio scenario is based on complete, real, and trusted
information. This means the portfolio management tool needs to be
an integral part of the overall innovation management platform.
INNOVATION MANAGEMENT IN ACTION
At a consumer goods company with several international and local
brands, investment decisions were based on a range of methods. With
disconnected data information coming from multiple sources, it was
difficult to make informed decisions and to assess the business value of
each potential project.
The Oracle Product Lifecycle Management software solution with
integrated Innovation Management and Project Management was
implemented to manage a portfolio of innovations and ensure
investments will be aligned with strategic goals.
The company can now make decisions based on reliable, connected
information, enabling it to invest in the right projects and kill off those
that offer little or no return. It can also define a common approach to
identify the best mix of innovation investments to align the product
portfolio with corporate strategy and find new ways to capitalize on
it established brands with additional, innovative offerings.
20. KEY QUESTIONS TO ASK
When establishing a balanced portfolio
management strategy, it’s important to ask
questions such as:
• What difficulties do we have today
in aligning our portfolios with
• Is our current portfolio tool linked to
our product development activities?
• How long does our portfolio review
processes take? Who is involved?
• How long does it take to create
and maintain product roadmaps?
Who creates and maintains them?
Are they accurate?
BEST PRACTICE USE CASES
A COMPLETE SOLUTION TO SYSTEMATIZE
AND STREAMLINE INNOVATION
Ideal for: All companies that create product or productized
services can benefit from a complete, integrated solution.
So you can:
• Transform fragmented product innovation and development
processes into a seamless, connected whole
• Capture a steady stream of innovative ideas and select the
right ones to build into a predictive product portfolio and
• Analyze the impact of alternative investment scenarios
on business objectives to identify the best opportunities
• Develop requirements that translate ideas into concepts
and products that will achieve business goals
• Eliminate new products that don’t fit corporate strategy
or fulfill the business case early in the development cycle
21. SOCIAL MONITORING
TO IDEA CAPTURE
Ideal for: Capturing ideas from a wide ecosystem is
a good starting point for consumer goods companies
So you can:
• Use social media to listen to ideas and feedback
on products and services from inside and outside
• Translate captured ideas into profitable offerings
that deliver a clear advantage over competitors
IDEA CAPTURE TO
Ideal for: Turning ideas into robust business cases is an
important consumer goods companies, manufacturers
and companies in services industries.
So you can:
• Quickly capture ideas from internal and external sources
in an idea pool to determine the best ideas to advance
• Analyze ideas using dashboards to make informed decisions
about which ideas to build business cases around
• Collaborate with internal and external teams to enrich and
refine viable ideas before moving forward with a proposal
Ideal for: Defining and optimizing requirements are vital
processes for manufacturers, particularly in high technology,
industrial manufacturing, and consumer goods.
So you can:
• Make product development processes more collaborative,
connected, and disciplined
• Use existing products in the portfolio to avoid duplication
of effort and wasted development resources
• Refine and evaluate product requirements and gain insight
into product readiness
• Maintain a complete record of all stakeholder input through
CONCEPT FORMATION TO DESIGN
Ideal for: Taking a concept all the way through the design
process can be a complex challenge for manufacturers.
So you can:
• Get new products to market faster by synchronizing
product development data and processes
• Accelerate innovation by using existing products
to create new designs
• Capture new ideas from different sources through
secure social networks
• Use analytics to create product concept alternatives
and develop cost estimates
PRODUCT PROPOSAL TO
Ideal for: Successfully getting profitable products to market
is a key concern in many industries, but digital tools can
be particularly valuable for companies in high technology,
industrial manufacturing and consumer goods.
So you can:
• Systematically turn ideas into a profitable product portfolio
• Model potential product revenue streams and analyze
different investment scenarios
• Determine how well an investment fits within
budget or resource constraints
PORTFOLIO REVIEW TO SELECTION
AND PROJECT EXECUTION
Ideal for: Manufacturers, as well financial services
organizations, consulting companies, and companies
in other services industries can gain a real advantage
with tools to evaluate product and service portfolios.
So you can:
• Accelerate the product and service portfolio
• Use analytics to define the most important product
and service evaluation criteria
• Enhance product and service proposals by securely
collaborating with team members
• Analyze each potential product and service investment
to make better-informed decisions
23. USE A CONNECTED PLATFORM TO
SUPPORT YOUR STRATEGY AND PROCESSES
If your company regularly drives
development of new products
and services, or modifications to
existing ones, you could benefit
from a structured approach that
links innovation management best
practices to development and
commercialization. Top innovation
performers have achieved
measurable business advantage
by modernizing their innovation
and development models. With
better control of product and service
innovation, you too can accelerate
time-to-market, increase cash flow,
and more effectively balance your
Implementing a new approach to
innovation does not need to happen
all at once. Rather, automating
best practice use cases in a phased
manner allows you to resolve your
most pressing issues faster and
Begin with a foundational
system of record for all product
value chain information,
such as innovation, development
and commercialization data.
Then automate related processes
aligned with strategy to lower costs
and improve productivity.
To maximize value and effectiveness,
you'll need a software solution that
provides best practices out of the
box—a connected platform that
covers the entire product lifecycle
and is ready to scale when you are.
Integrated innovation and portfolio
management functionality is a must.
Your solution should be configurable
without the need for customization;
cloud-based for fast deployment
and ROI; and easy to use, so project
managers and decision-makers
can work productively, efficiently
DEVELOP AN INNOVATION CULTURE
The innovation culture in the
company plays an important role
when you try to improve your
innovation processes. You should
ensure that all employees in the
company are involved in the
innovation process. A continuous
dialogue between staff and
managers is essential, as is the
visible involvement of senior
executives. The use of IT tools such
as internal social networks can
also have a huge impact on idea
generation and collaboration.
This is an enterprise effort—it’s
not enough to believe that you will
succeed just because you have
operational excellence in product
development processes. You need
to harness the power of innovation
of the entire company, not just the
ENSURE PROCESSES ARE REPEATABLE
An essential part of best practice product development is to learn from
successes and failures. Use analytics tools to gather detailed knowledge about
your results so you can repeat successful development processes, avoid
known risks, and capitalize on information collected in previous projects.
CONCLUSION: THE KEYS TO
SUCCESSFUL PRODUCT AND