2016 Readers' Choice Survey: New Product Development & Introduction
In 2011, CGT conducted a survey of consumer goods executives about new product introductions, and found that only half of new products meet profit objectives, while a long list of challenges also surfaced, including the inability to differentiate new products, ineffective promotions, complex development processes, among others. Fast-forward to 2015 and unfortunately, not much has changed. New products are still an important part of the overall revenue picture however, even though the percentage of revenue from products released in the previous three years dipped slightly (26 percent in 2011 to 23 percent today).
Here, Kalypso Chairman George Young, provides his input on the state of new product development and introduction for the consumer goods industry including trends to watch and where it falls on the list of priorities for organizations today:
Can you comment on this list?
Young: When looking at new product development and introduction (NPDI) needs in consumer goods, there is no one “right” solution — it is dependent upon the particular needs and individual requirements of each organization. There are companies that favor best-of-breed solutions, and those that prefer solutions within a software suite. This list reflects that mix.
Are there any trends to keep an eye on in this space?
Young: What we can expect to see on this list in the future are cloud-based NPDI solutions. There are a number of new, cloud-based, standalone NPDI solutions that are emerging on the scene from some of the providers known for product lifecycle management (PLM) solutions, like Oracle. We’re seeing an interest from consumer goods clients in replacing licensed software with cloud-based solutions, and along with that, a willingness to move their sensitive product development information into private cloud environments.
How important is this area of investment? Where should this area fall in the list of priorities for consumer goods companies?
Young: For the last several years, surveys by various firms have shown that innovation is a top priority for consumer goods executives. However, the investment in NPDI processes and enabling software has not been commensurate with this stated need. If innovation is a top priority then companies must dedicate dollars and resources to it. That being said, within the last 12 to 18 months we have seen several organizations shift from cost-cutting and zero-based budgeting initiatives to dedicating sizable investments to transform their innovation results.