A few weeks ago I had the opportunity to sit down with our
resident expert on Innovation Management, Gayle Hayes.I picked her brain on what’s going on in the world
of product and service innovation and how Oracle is helping.A new phenomenon is sweeping product
development – thanks to an explosion of ideation tools and techniques such as
crowd-sourcing, big data, mashups, customer immersion labs, etc, finding ideas
is not the problem.With so many to
choose from, the biggest questions are now “which
idea?” and subsequently, “how do you translate
the right idea into a profitable product?"
This is precisely the challenge the new Oracle Innovation
Management is designed to address.To
learn more about the idea glut and how the new solution helps organizations
improve return on innovation investments, read the transcript of our discussion
below or stream our podcast.You can
even find us on iTunes!
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Kerrie Jordan: Hello and thanks for tuning in! My name is
Kerrie Jordan, and I’m the PLM Product Marketing Director at Oracle and one the
hosts of this Podcast series called AppCasts.Our goal is to help you get the most out of your Oracle Applications by
listening to thought leaders, customers, partners and Oracle executives along
with commentary and opinions from me, your host!So, here we go…
I am very pleased to have with me today Gayle Hayes, Senior Director of PLM Product
Strategy at Oracle. Today I'll ask Gayle about
Oracle's new solution Oracle Innovation Management and the unique value that it
offers business leaders looking to maximize their return on innovation.Gayle, we see companies around the world looking to become more
innovative.What sort of implications
does this innovation imperative have on businesses and how they operate?
Gayle Hayes: For starters, product
Innovation is a top priority for many executives – several research studies
show that less than 20% of CEOs currently believe their investments are paying
off.Now, combine this with market
pressures of shortened product lifecycles, increasing and fairly visible
customer sentiment, and global competition… It’s raising the stakes to deliver quality,
innovative products to the market.
Do nothing is not a risk that most
companies are willing to take as that can result in missed market opportunity, lost
market share, etc.Also, innovative
ideas can spawn from many different sources like customers, suppliers,
partners, field resources.You can even
get them from your service, quality, and field operations.Innovations can be disruptive (like the
tablet devices) or evolutionary (new features) or they could just be around new
packaging, new processes.The challenge
is first sorting through all this information to identify the best ideas and
then secondly translating each idea to determine if it’s an investment that can
meet targeted expectations and fit within the company strategy. Bottom line – there is a lot of pressure to
innovate and make the right investment choices.
Jordan: That must cause a lot of
frustration for businesses.Could you
elaborate on the specific business processes that are broken, and what companies
may be doing as a work-around?
Hayes: Yes it definitely does cause
frustration and multiple key processes are disconnected which is leading to
lower returns on innovation investments.I’ll start at a high level; executives lay out a company strategy – the growth
plans, target areas for growth, risk tolerance, etc. – at the lowest level there are teams executing
against a plan.In the middle is where
there is an issue.This is the
intersection where the selection and translation of potential investments are
made to achieve the company strategies.One of the challenges is idea selection.This is what goes into the proverbial funnel and the inconsistencies in
how they got there. Business cases can be inconsistent and sometimes things end
up in the funnel without a vetted justification, consuming precious resources
and budgets.
The next challenge is managing the
requirements which translate the idea.This
is often a disconnected waterfall process where requirements for customers and/or
markets are later handed off to design teams to turn into a concept.The requirement document is often in a
separate location.Two issues we heard
from companies we interviewed were 1) marketing teams don’t know if
requirements can’t be met until the back-end of the concept process and 2)
requirements are often refined during this process and the history of decisions
made are difficult to maintain.This is
a critical issue because if requirements can’t be met – that affects the
business case and possibly affects the target markets, revenue plans, time to
market, etc.
The result is that in the portfolio
you end up with a mix of opportunities, some justified, some not, some that
should be killed because the requirements can’t be met. The cost of failure
gets more expensive at each stage of the innovation process.The goal should be to shut down ideas that
don’t live up to the business case and requirements sooner and convert those
investment dollars into more promising ideas.Unfortunately many companies don’t have connected innovation processes.Key data is scattered all over a variety of
systems making it very difficult to expose potential failures sooner.When that is the case, projects get
commercialized and results in what we mentioned earlier – executives not happy
with their return on investments.
Jordan:It seems like companies are really struggling
with questions such as, first, 'how do you identify which product idea to
invest resources in,' and secondly, 'how do you then execute as effectively as
possible to maximize your return.' How does Oracle Innovation Management help?
Hayes: Great question.Oracle Innovation Management helps companies identify
andtranslate the best ideas that carry
the most profit potential as product offerings.So how can this solution do that?The solution offers a two-fold approach: First, it offers a bottoms-up approach where stakeholders
participate in the product invention, definition and translation
processes.These are the ideation
selection, requirements and concept definition processes.Second, it provides a top-down approach to analyze the financial impact and long-term
strategic fit within the innovation portfolio.
This enables a company to establish
a more comprehensive, consistent, systematic approach to portfolio decision making that aligns with
company objectives for long-term success.The solution also keeps all stakeholders on the same page as to the
definition and priority of requirements, whether or not the concept can meet
the requirements and stay within supply chain risk objectives, and if the
overall business case justification can be met.Then in order to make certain you execute on that investment as effectively
as possible, Innovation Management integrates directly to your Agile Product
Lifecycle Management (PLM) solutions.This allows a company to track the product through development, ensure
quality, control cost, launch the product quickly, and leverage performance
analysis to improve the next generation of products.
Jordan:On
that note, let’s talk about value.What
benefits can companies hope to achieve by using Oracle Innovation Management?
Hayes: With Oracle Innovation Management,
companies can increase revenues and product profitability, improve customer
satisfaction, and deliver greater return on innovation investments.This is made possible by having a single
repository for ideas, requirements, product concepts, proposals/business cases
and the portfolio – doing away with disparate systems and scattered data.With Innovation Management, companies can analyze each potential product investment
across a 360 degree view ofcost, supply
risk, resources, ability to meet requirements.Businesses can analyze the business case to determine if it can be met, how
well it achieves the company strategy, and whether it fits within budgets or
resource constraints.Leaders are able
to make more informed and confident decisions about where to place their
limited resources for maximized value.
Jordan:Now,
for people reading or listening to this conversation, they may be thinking, this isn't the first product in the market
claiming to help companies manage their innovation.What makes Oracle's solution different, and
why should a company consider this solution over the others?
Hayes: Well, a lot of the solutions
that are offered today under the term “innovation” are primarily what are
called Social Ideation solutions.There
are probably about 50 such tools on the market right now.These are specifically focused on gathering
the voice of customers and/or crowd-sourcing.What we found was that many companies didn’t have a shortage of ideas – the
key challenge was in making the right choices in where to invest the innovation
budget.And if a customer has invested in one of these
solutions, Oracle’s Innovation Management offers the web services to bring the idea
output to further evaluate, translate and ensure the best ideas are selected in
alignment with the targeted portfolio
strategies.
So what makes us especially different?
Well, there are so many advantages with Oracle’s Innovation Management versus
point tools addressing ideas, portfolio requirements, or even PLM, but let me
highlight a few of the key ones.First, design
teams can directly link specific requirements to the targeted area within the
product concept.This provides visibility
to the product management teams that their requirements can or can’t be met,
greatly improving the evaluation of requirements to concept feasibility.
A second advantage is a solution to
what worries a lot of companies – that the end-to-end view of traceability from
ideas or problem reports linked to requirements, which are linked to the
concept structure.Being tightly tied to
PLM provides additional differentiated value.For example, Innovation Management provides the ability to link quality
problem reports to ideation, which provides closed-loop corrective action to
the next generation or product iteration.Another example is where Innovation Management provides the ability to
reuse existing products or parts as the basis for new products, reducing product
and supply chain risks by using known, proven materials.
Another advantage is that
Innovation Management provides linkage to the PLM projects and reads status
back to the business case exposing if the project is running over budget, is
late, or even under-resourced.This is
powerful.Within the context of the
portfolio, adjustments can be made.If
it makes sense, you continue the project with an updated business case.This prevents choking the funnel with ideas
that can’t or won’t deliver the value.
Bottom line: Oracle Innovation
Management is the only solution integrated with a world-class product lifecycle
management solution to track the conversion of ideas to projects and then
ultimately to profitable products.
Jordan: I see how this Oracle solution offers much more than
a hub for ideas but rather that complete linkage to helping companies commercialize
profitable products. You must have had
many discussions with businesses while developing and now launching this solution.What is some of the feedback you have
heard?
Hayes: This solution has been 3
years in the making, so our customers are as delighted as we are!The customers that were part of our
validation processes during these past three years are very happy to see this
solution released to market. In fact, the reception shown across the various industries,
whether it be high tech, industrial, life sciences, telecom, consumer goods,
etc. has been exciting as each of these industries sees value from the
capabilities we’ve integrated with the complete Innovation Management solution.
Jordan: Well, that is all the time
we have.Thank you Gayle for joining me!
Hayes: Thank you for giving me this
opportunity to talk about Innovation Management!
Jordan:And thanks to everyone for tuning in.We have many more AppCasts available for you
to listen to and will continue to have new AppCasts each week.So if you haven’t had a chance to tune in to
other AppCasts, you can download a show from iTunes, subscribe to an RSS feed
or go to www.oracle.com/appcasts and listen on your
computer.
Until next time, this is Kerrie
signing off!
Learn more at www.oracle.com/InnovationManagement