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Should a CIO Invest in Product Development?
Kevin Prendeville, MD, Managing Consulting-NA Innovation & Product Development/PLM Practice Lead, Accenture


Kevin Prendeville, MD, Managing Consulting-NA Innovation & Product Development/PLM Practice Lead, Accenture
Why should a Chief Information Officer invest to improve product development? The biggest reason for the relevance of this question today is the amount of money at stake – costs and revenues –that can be significantly impacted by information technology investments in this arena. This holds true for a range of industries such as aerospace and defense, apparel, automotive, consumer electronics, consumer packaged goods, consumer durable goods, industrial products, oil and gas, semiconductors, and software. In these industries plenty is already being invested in product development. In fact, according to Accenture research and analysis, businesses are spending more on product development than ever. For the 2,000 largest global public companies, research and development spending exceeds $680 billion. For some industries such as high tech and biotechnology, R&D spending can be 20 percent or more of overall revenues. The percentage of a company’s employees working in this area can reach 25 percent or more. But while spending is robust, returns on those investments are not nearly as strong as they should be. To improve investment returns, companies need leverage IT to overcome three challenges: • siloed groups and linear development processes spanning numerous point solutions; • lack of access to, and governance of, development data • Minimal integration spanning software and hardware development. Overcoming silos and limited linear processes Too many companies still use a linear, sequential product development process spanning numerous silos of systems, departments and data. This process inhibits internal and external information flow needed to optimize product development. Engineers often become disconnected from the new product introduction process. Product launch teams don’t hear about critical, last-minute design changes as often nor as soon as they should. Customer insights may be out of sync with functional and technical product requirements as well as test results. Products emerging from this fragmented system are unlikely to deliver on customer expectations. Investing in Digital PLM These challenges can be overcome through greater investment in Digital Product Lifecycle Management (Digital PLM), elevating product development processes to higher levels of efficiency, productivity, and intelligence. Compared with the linear model, Digital PLM enables direct and
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