Survival is a good prerogative, if not the best. But it’s not a synonym for success, even during the kind of economy we’ve endured for nearly two years. Companies have to do more in bad economies than just duck their heads and wait for things to get better. When customers start buying again, they’re not going to want the same products and services you offered when the recession hit. They will want to purchase products that will help their business to start growing again. If you don’t have new products to offer them, they’re not going to wait for you to catch up. They’re going somewhere else.
That reality is, however, often one of the first ignored when economies go south. Cutting funding for new product R&D is one of the first, but deadliest, survival tactics. Tough times mean tough choices, but gutting a company’s engines of recovery to ensure short-term survival almost always consigns it to long-term failure.
However, there are strategies for reducing R&D overhead that are based on software solutions already proven to cut the cost of other business functions without reducing their effectiveness. They automate processes such as resource management, communication and collaboration, and budgeting.
The software option
Companies that endure know how to plan for recovery, even as they’re riding out a downturn. In almost every case, product R&D is part of the equation. Nothing is sacrosanct during bad times, but there are alternatives to wholesale R&D cutbacks that cripple the company in the long run.
Tighter project management is an often-overlooked alternative to damaging budget cuts. It saves money by keeping development efforts focused on meeting real customer needs. It reduces the cost and amount of time needed to bring products to market, which increases their profitability. Deciding which products to develop is ultimately a combination of facts and intuition, but companies can do a lot to make the facts flow faster and smoother through more effective project management. Even the most nebulous parts of the R&D process-the early research-can be placed in an organized framework that helps executives make better decisions sooner.
Rather than flying on intuition from the earliest phases, companies can assign numeric values to different priorities (for example, profit margin, time to market (TTM) and development costs), then weigh the priorities to arrive at a score. That gives the discovery process more focus, which eliminates the cost of vetting impractical concepts that don’t meet the company’s needs.
When a concept moves from research to development, the prerogative shifts heavily to cost control. Today’s product development apparatus is typically spread over multiple sites in different time zones. It’s commonly accepted that the greatest advantage in this model is the ability for different groups to work on projects concurrently, which reduces TTM.
Executing concurrent development, however, is difficult. This is where much of the waste in the development process occurs. Coordinating activity over e-mail and shared calendars is too manual, consuming too much time for the results it yields. Also, although software automation permeates most avenues of business, a surprising amount of R&D management is paper-based-at a great cost in terms of time and efficiency.
This is especially true when several departments, locations and partners are involved. Major project management processes such as sign-offs, notifications and version control must be automated to keep development moving ahead-without expensive mistakes caused by skipped steps or incorrect procedures.
Project Management Software Can Help
Product management software can help
Project management has been “productized” in software applications almost since the mainframe era, with vendors producing a wide range of management tools. They have most often been applied in the design phase through to production, but not as often from the outset of the R&D process through production. The product management software on the market today can help companies reduce R&D expenses without gutting the new product pipeline.
As with any class of software, functionality varies widely from one product to the next. However, there are four essential qualities that any project management solution needs in order to succeed in an R&D environment. Those four qualities are:
Everyone with a stake in R&D-from sales to financial to marketing to customer service-must be able to share and retrieve information, view statistical analyses and monitor costs. When everyone who needs to be in the loop is included, R&D projects are less likely to go off track.
The software should provide options so users can customize their information views, focusing on information critical to their responsibilities.
Re-creating and copying data is time-consuming and wasteful. Project management solutions should interoperate with your existing systems, especially e-mail and other project management solutions so that users are working in a single environment.
R&D is a collaborative and data-intensive process. Project management solutions must have the capacity to support hundreds of users and large, complicated data files. A carefully selected project management solution reduces costs by helping cut the amount of time and effort spent choosing the most promising product concept to develop. During development, it can then shorten TTM by supporting concurrent efforts between multiple sites, or even between multiple departments in the same location. As part of an overall recovery plan, maintaining R&D at credible levels preserves the next generation of products and your company’s reputation for innovation.
The alternative is to emerge from the economic slump only to find that you have nothing new to offer customers. Yes, that’s survival, but not of the fittest.
Christophe Borlat is General Manager at Genius Inside. Christophe was Genius Inside’s first employee back in 1997, and ever since then, he has been involved in various business activities. Since 2002, Christophe has focused on business development and sales and marketing. Prior to Genius Inside, Christophe worked in product development and professional services, in hardware and IT consulting organizations. With more than 10 years of experience in project management and sales, Christophe has extensive knowledge of the PPM market. He understands the challenges that organizations face to overcome their project management challenges. He can be reached at [email protected].