Accenture Innovation Product Development Services

Accenture Innovationand Product DevelopmentServices

Companies are under increasing pressure to deliver thetop- and bottom-line returns that drive growth andunderpin value creation. However, sustaining profitablegrowth over time represents a significant challenge.This is where effective and efficient innovation has avital role to play. But, for most companies, innovationhigh performance remains elusive.Accenture believes that superiorglobal product development andsupport capabilities will become a keydifferentiator of corporate financialperformance. Our experience shows thatsuccessful companies view innovation andproduct development as a core businessdiscipline. These organizations embedinnovation throughout the product andservice lifecycle – from discovery andexecution through commercialization andultimately to product/service retirement.Accenture’s framework and approach togrowth and value creation spans the keycomponents of the innovation and productdevelopment value equation, drives betterresults than other methodologies, andultimately leads to high performance.In short:Companies need to realize greater returnsfrom the investments they are makingin innovation. Currently, across largeenterprises, almost half (48 percent)of Research and Development spend iswasted. This is due to a combinationof weak market insight leading to poorcustomer acceptance and developmentdelays which result in slow time to market.By having a R&D project portfolio alignedto a well-understood market demand, andsized to the capacity available to deliver,a company can achieve significantlyimproved time to market and a greater “hitrate” of products, resulting in an increasedpercentage of revenue delivered from newproducts and services.R&D spend in large enterprises representsbetween 5 and 22 percent of totalrevenues. Streamlining and optimizingR&D investments represents a significantlever for improving the performance of thebusiness. Even a 1 percent improvement inR&D efficiency can have a material impacton the business. A company can eitherchoose to leverage the same committedresources to deliver increased R&Dthroughput, or to recoup those savingsthrough an overall reduced R&D cost.Talk of quality has been around fordecades. But it remains largely ignored inthe innovation and product developmentcycle, where it is, in fact, most critical.Companies can seize competitiveadvantage and generate business valueby focusing early in the developmentlifecycle on quality in the design processand overall complexity reduction. The costof product development can be reducedby 10–20 percent, since upwards of 80percent of a product’s cost and quality islocked during the design phases. Focusingon quality from the outset can reducethe final cost of new products, as well asincreasing the “perceived” quality fromthe customers’ viewpoint. This enhancesboth market share and brand value. Finally,improved quality has downstream revenueimplications through its impact on lowerwarranty and support costs.

Companies are under increasing pressure to deliver thetop- and bottom-line returns that drive growth andunderpin value creation. However, sustaining profitablegrowth over time represents a significant challenge.This is where effective and efficient innovation has avital role to play. But, for most companies, innovationhigh performance remains elusive.Accenture believes that superiorglobal product development andsupport capabilities will become a keydifferentiator of corporate financialperformance. Our experience shows thatsuccessful companies view innovation andproduct development as a core businessdiscipline. These organizations embedinnovation throughout the product andservice lifecycle – from discovery andexecution through commercialization andultimately to product/service retirement.Accenture’s framework and approach togrowth and value creation spans the keycomponents of the innovation and productdevelopment value equation, drives betterresults than other methodologies, andultimately leads to high performance.In short:Companies need to realize greater returnsfrom the investments they are makingin innovation. Currently, across largeenterprises, almost half (48 percent)of Research and Development spend iswasted. This is due to a combinationof weak market insight leading to poorcustomer acceptance and developmentdelays which result in slow time to market.By having a R&D project portfolio alignedto a well-understood market demand, andsized to the capacity available to deliver,a company can achieve significantlyimproved time to market and a greater “hitrate” of products, resulting in an increasedpercentage of revenue delivered from newproducts and services.R&D spend in large enterprises representsbetween 5 and 22 percent of totalrevenues. Streamlining and optimizingR&D investments represents a significantlever for improving the performance of thebusiness. Even a 1 percent improvement inR&D efficiency can have a material impacton the business. A company can eitherchoose to leverage the same committedresources to deliver increased R&Dthroughput, or to recoup those savingsthrough an overall reduced R&D cost.Talk of quality has been around fordecades. But it remains largely ignored inthe innovation and product developmentcycle, where it is, in fact, most critical.Companies can seize competitiveadvantage and generate business valueby focusing early in the developmentlifecycle on quality in the design processand overall complexity reduction. The costof product development can be reducedby 10–20 percent, since upwards of 80percent of a product’s cost and quality islocked during the design phases. Focusingon quality from the outset can reducethe final cost of new products, as well asincreasing the “perceived” quality fromthe customers’ viewpoint. This enhancesboth market share and brand value. Finally,improved quality has downstream revenueimplications through its impact on lowerwarranty and support costs.

InnovationAccenture delivers tailored end-to-end innovation,product development and support solutions that helpglobal organizations to achieve high performance intoday’s dynamic environment. These solutions spaninnovation (doing things appropriately and increasingthe value of the innovation portfolio), through theentire product development process (fast, efficientand repeatable operations and execution), and on todownstream support (necessary to maximize profitthroughout the lifecycle).Business InnovationToo often, companies mistakenly focus onlyon products when thinking of innovation.The most successful innovators actuallydeliver competitively superior resultsthrough innovations inside the businessitself – by constantly assessing the potentialinnovation opportunities that may emergethrough a synthesis of customer insights,macro trends, emerging technologies andleveraging core competencies. In fact,business model innovation can occur in anyone or more of the dimensions of operationsincluding the supply chain, distributionnetwork, manufacturing processes,operating model, and/or revenue model.The real power of these deep businessinnovations is that they are so difficult forcompetitors to replicate, and those thatattempt simply to copy the result (such asa lower price point in the market) end uplosing money at best, or being driven outof business altogether. Business Innovationis at the heart of identifying breakthroughgrowth opportunities. Accenture’s BusinessModel innovation services have helpedclients rethink their business processes andoperating models to create sustainablecompetitive advantage in the market, andidentify entirely new markets to developand grow.Fast InnovationAccording to research, up to 80 percent oftime-to-market is spent waiting, negativelyimpacting profit margins and underminingfirst-mover advantage. Typical developmentpatterns provide only modest rates of returnand a relatively long time to break-even.But with Fast Innovation, investment ininnovation and product development startsearlier. The customer knowledge gainedupfront pays off in significantly shorterdevelopment time and higher margins.Fast Innovation achieves this by refocusinginnovation resources on challenges thatmatter; eliminating bottlenecks, capacityconstraints, and delays; and leveragingopen innovation as a tool for massiveparallel processing of successes and failures– meaning that success is only paid for interms of time and money.Portfolio ManagementEnhancing the product portfolio andreducing complexity starts by understandingconsumer behavior and customer needs,and continues by improving the value chainbased on those insights. Accenture believesthat effective portfolio management isbased on a customer-centric approach thatbalances customer demand and cost-toserve – and that a company’s R&D projectportfolio should be aligned to the marketand sized to the available capacity to rapidlydeliver on projects in the pipeline. Theportfolio should also be properly balancedbetween the near-term incrementalinnovation needed to remain competitivein the current market, and the breakthroughinnovation that delivers significant upsidegrowth potential for the future. Complexityand costs created in the supply structuremust be justified by the revenue generationcreated in the demand structure. Highperformers take an integrated approachto portfolio management that focuseson rapidly achievable top-line growth aswell as the bottom-line impacts, in termsof cost and efficiency.Frugal InnovationEmerging markets represent a majorgrowth opportunity, but they also presenta fundamental challenge. To succeed inthese markets, companies should innovateto deliver to customers at a radically lowerprice-point and through less effective levelsof infrastructure than in the developedworld. Accenture understands that FrugalInnovation is not just about redesigningproducts; it involves rethinking entireproduction processes and business modelsfrom the ground up, rooted deeply incustomer insights that are specific to theemerging markets in which companiesplan to operate. The benefit of such anapproach is twofold: first, it is essential forcompanies that wish to succeed in highgrowth emerging markets; and second,the results of Frugal Innovation (such asmanufacturing, product features, and evennew service models) can be brought back tothe developed world to improve competitivepositioning and profitability. Accenture’sstrong footprint in emerging marketsenables us to provide deep local marketinsight for our clients, along with the abilityto rapidly develop, test, and scale FrugalInnovations in those markets, and ultimatelyto help our clients leverage the value ofthose innovations into the broader globalmarketplace.