5 Fatal Errors of New Product Development

Successful new product development is key to a healthy manufacturing business, but typically only about 30% of products launched onto the market actually deliver the returns that were expected of them.

So I want to take you through the 5 top mistakes which I see made time after time again, not just by small and medium sized manufacturers, but large global players as well. The difference is that the global players tend to be able to ride out their mistakes and disguise them more easily than organisations with less cash to throw away.

So here they are:

1. Failing to have a strategic plan for the future

New product development is all about creating the future. Designers and engineers work in the future all the time, so it makes sense that if the designers and engineers are to have a place to aim for, then there needs to be a strategic plan which will lead the way for future product developments.

2. Developing a product where the technology is not ready for launch

Using new technology is always a good way to keep the competition at bay, but if the technology is not fully developed or even if it is well established but new to your company, then it is likely to be high risk. There are so many things that can go wrong in these situations and they will, more often than not, result in the project going significantly over budget and missing the intended launch date.

3. Over-estimating the sales volumes

It is easy to get caught up in the excitement of a new project or idea, but it is essential to remain objective at the early stages in order to ensure that the right resources are spent on the most appropriate opportunities. Over estimating the sales volumes can be more dangerous than under estimating them.

4. Developing a product for wrong market time

Products are often developed in response to the demands of the current market. However, unless the product development process is very fast, it is likely that the market will be demanding different products by the time your product has reached the market.

5. Trying to be all things for all people

This is normally brought about by manufacturers who really don’t understand their market well enough to be able to segment and target specific market groups. Adding features simply because competitors have them is rarely a good idea and typically features do not always translate into customer benefits anyway.

Perhaps you recognise some of these errors from past projects, but have a look at your new products which are currently undergoing development and check that you are not making the same mistakes again.

Enjoy the opportunity!

Outsourced Product Development – A Trend or a Business Necessity

Nowadays the concept of outsourcing is a new hype in the software industry and many businesses are investing billions in outsourcing all their core and non-core product development activities. Since companies are intended to bring innovative products to the market rapidly, they need a strategic model of outsourcing for their upstream functions such as product designing and product development. An external engineering expertise not only reduces operational costs but also provides long-term benefits which, in turn, help to stay abreast of the competitors.

Though reasons could be numerous, the consistently emerging marketplace competition has actually drawn companies into new markets, domains/technologies for which they require expertise and skills in place. But when a company recognizes that they lack required infrastructures or skills, they end up on outsourcing product development activities. From this, it is evident that outsourcing is just not a mere trend but a business necessity which help companies to transform their raw ideas into innovative products. Let’s discuss in detail few reasons for why outsourced product development is a business necessity:

To Gain Expertise in Multi Domains

A saying states that it is always better to have more, which is true especially in the field of product designing and development. In order to build innovative and unique products, working on multiple concepts and theories is truly important. It not only helps to differentiate your product from others but also helps to determine product’s viability in the market. An outsourced product engineering firm generally has a team of design experts who work collaboratively with industry experts to build a working prototype of the product.

To Focus On Other Core Activities

Other than product development activities, a company needs to focus on several other tasks including IT operations, marketing, and sales. Not necessarily, engineering requirements are the only core requirements of every company especially when most of the R&D activities can be outsourced. Cost, in-house expertise, complex development processes, and resource management are some of the key areas which a company find challenging to deal with. Also, development teams are often swamped with numerous projects that require assorted expertise. Here the role of outsourced vendors comes into play. Their dedicated resources focus on a single project while freeing-up company to focus on other activities.

To Minimize Staffing Requirements

Since different projects have different requirements, organizations consider recruiting new talents for short-term periods to complete a specific project. But is this reliable to hire full-time employees that may put an extra burden on HR department as well as can create confidentiality risks? Getting the right person on board usually requires more time, and sometimes training sessions to learn. While outsourced firm, with their full-time staff, can help in completing development projects on time, nothing could be better than applying targeted expertise at the right time.

To Meet Fixed Project Timelines

It is very usual for companies to miss their project timelines due to failing in committing resources to it. On the other hand, outsourced partners, prior to signing a contract, clearly understand a project’s timeline and requirements and consider assigning their resources on it accordingly so as to ensure its on-time delivery.

To Minimize Operational Costs

High developments cost is one of the basic reasons why companies outsource engineering firms. Outsourcing helps to minimize product development costs by discussing project requirements and deciding a budget for it. Outsourced partner allocates resources and prepares regular reports in accordance to keep the company informed about the expenditures made for the changes other than the fixed budget.

On the other side, when product development is carried in-house, it becomes challenging to allocate extra resources or time for the new requirements. But outsourcing identifies the areas where extra resources are needed and sets a budget for it. With holding years of experience in optimizing product designs, outsourcing can help business to achieve their goals is shorter span of time.

To Win Over Competitors by Gaining Market Ownership

As we have mentioned earlier, businesses are striving to gain a competitive edge over their competitors, which is only possible when they would have a clear picture of the market trends and customer’s requirements. Their launched products should be unique and innovative for a customer to accept. Outsourced partners with their expertise can be a great help in terms of bringing creative ideas to the table. Also, by performing a complete market analysis, they can assist with the products having higher demands in the market, customer’s expectations, scope of transforming existing product, and marketing strategies for launching a product.