collaborating for innovation 2010

19
Collaborating for Innovation Capgemini’s 2010 Global Study – Results and Findings October 2010

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In this edition of “Collaborating for Innovation” the goal was to draw executive attention to current strengths and improvement opportunities, relating to the process of innovation, focusing on four overarching aspects of the innovative company:The consequences of changing corporate/strategic imperatives upon innovation as a lever for growthThe changing structure and operation of the R&D function and its impact on corporate successThe embedding of innovation as a culture underpinning an organization beyond the R&D function and across the value chain, including customers and suppliersThe drivers and obstacles for integrating these “external” parties in various stages of the innovation process

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Page 1: Collaborating for innovation 2010

Collaborating for InnovationCapgemini’s 2010 Global Study – Results and Findings

October 2010

Page 2: Collaborating for innovation 2010

Collaborating for Innovation – About The Study

Key Findings

Recommendations

Agenda

Page 3: Collaborating for innovation 2010

In this edition of “Collaborating for Innovation” the goal was to draw executive attention to current

strengths and improvement opportunities, relating to the process of innovation, focusing on four

overarching aspects of the innovative company:

The consequences of changing corporate/strategic imperatives upon

innovation as a lever for growth

The changing structure and operation of the R&D function and its

impact on corporate success

The embedding of innovation as a culture underpinning an organization

beyond the R&D function and across the value chain, including

customers and suppliers

The drivers and obstacles for integrating these “external” parties in

various stages of the innovation process

About the Study

Page 4: Collaborating for innovation 2010

Study Methodology and Respondent Profile

The study was carried out by a professional market research agency, using a web-based survey, comprising

41 questions focused on Corporate Strategy, Innovation Performance, and Collaboration with the R&D function,

Customers and Suppliers

Invitations to participate were sent to board-level and

senior executives, as well as middle managers closely

involved with, or responsible for, Innovation, Product

Development, Manufacturing, Sales, Marketing and

Customer Service. We approached a range of potential

participants including, but not exclusively, existing

Capgemini clients around the world

We collected responses from 189 participants from

companies based in 15 countries, with the respondent

distribution of 38% from companies headquartered in

North America, 39% from Europe, 11% China and

North East Asia, 7% Indian and South East Asia, and

5% from Australasia Central/South America and

Africa/Middle East

Industry Representation among Survey Respondents

23%

23%42%

12%

Automotive,

Aerospace &

Defense

Consumer

Products &

Retail

High Tech

Industrial

Products

Page 5: Collaborating for innovation 2010

Agenda

Emerging Multinationals – About The Study

Key Findings

Recommendations

Page 6: Collaborating for innovation 2010

Our research indicates that manufacturing companies have improved in their ability and

confidence to develop, produce, promote and measure innovation from strategy and then

throughout the value chain:

Innovation is increasingly integrated into corporate strategy

An integrated innovation performance measurement system is essential

R&D collaboration is key for top-line growth in global markets

Customer collaboration is more than collecting customer insights – it’s about

capitalizing on them

Supplier collaboration needs to shift from cost reduction to shared value creation

Overall Key Findings

Page 7: Collaborating for innovation 2010

Corporate Strategy 1/3

• Innovation appears to have become an integral part of corporate growth strategy and increasingly is embedded

in other functions beyond the R&D division, representing an evolving approach

50%

34%

45%

23%33%

44%

59% 36%

67%56%

6% 7%17%

10% 10%

Consumer Products & Retail

High Tech

2%

100%

Total

1%

Automotive, Aerospace & Defense

0%

Industrial Products

Alignment of Strategic Approach to Innovation with Growth Strategies

Somewhat aligned

Not aligned

Closely aligned

Completely aligned in all aspects

Page 8: Collaborating for innovation 2010

Corporate Strategy 2/3

This, together with increasing C-level involvement and growing external pressure from globalization, has led

companies to look at it as an important lever to improve business performance, in addition to the more traditional

role of bringing new products to market

Effectiveness of C-Level or Executive-Level Sponsorship and Support for Innovation Projects

22%

11%

37%

13%19%

50%73%

46%

73%65%

22%14% 10% 13% 13%

7%6%

Consumer Products & Retail

1%

High TechIndustrial Products

2%

Automotive, Aerospace & Defense

100%

Total

3%

No support

Some support

Good support

Complete and effective support

Page 9: Collaborating for innovation 2010

Corporate Strategy 3/3

Compared with our 2008 survey, the role of Marketing & Sales as the primary driver for innovation has been

strengthened, which reflects the tendency to more market-driven innovation instead of a technology push

Which Functional Area is the Primary Driver of Innovation?

38%

29%

11%

5%

16%

1%

General

Management

Information

Technology

Manufacturing /

Operations

Marketing &

Sales

Purchasing /

Procurement

Research &

Development

Page 10: Collaborating for innovation 2010

Innovation Performance 1/3

Overall, we see a mix of performance measurements for innovation across and within sectors. To demonstrate

the benefits of collaborative innovation, companies need to establish a consistent range of performance

indicators

About one-quarter of respondents rated customer satisfaction, product performance and sales from various

types of new products as the key benchmarks to measure innovation performance – factors that impact primarily

the top line

Primary Measure of Innovation Performance Effectiveness

20% 18%31% 25%23%

14%7%

10%27% 9%

9%

22%25% 41%

12%23%

14%9%

16%

40%24%

23%

9% 9% 13%

5%

14%

0%

5%

Automotive, Aerospace & Defense

100%

TotalConsumer Products & Retail

3%

High TechIndustrial Products

Manufacturing and operations costs

Sales from various types of new products

Product performance

Time to market

Development costs

Customer satisfaction

Page 11: Collaborating for innovation 2010

Innovation Performance 2/3

About two-thirds of the respondents affirmed that less than half the products launched in the past three years

had been successful in the market. On the other side, 11% of respondents indicate that they achieve success

rates of more than 76% - a significant difference in innovation performance and a significant potential for

improvement

Success Rate of New Products Launched over Past Three Years

14% 17% 18% 13% 15%

36%

49% 41%61%

51%

27%

32%33%

13%23%

23%

8% 13% 11%100%

TotalHigh TechIndustrial Products

2%

Automotive, Aerospace & Defense

Consumer Products & Retail

0-25%

20-50%

51-75%

70+%

Page 12: Collaborating for innovation 2010

Innovation Performance 3/3

Failure to meet customer needs is by far the primary cause for new product launch failure, particularly in

industry sectors that sell directly to end-customers. New methods in the innovation process and the more active

use of collaborative technologies provide opportunities to address this challenge

Primary Cause of New Products Launch Failure

19%12% 12% 10%

14%5% 6%

47%

19%

22%

58%39%

21%

21%

10%

14%

24%16%

19%

17%

18%

10%18% 21%

5%13%

5%

Automotive, Aerospace & Defense

100%

TotalConsumer Products & Retail

4%

High TechIndustrial Products

Development project too expensive or not adequately fund

Poor product quality or technical performance

Product falled to meet customer / consumer needs

Product launched before market was ready

Product launched too late to market

Products retail price too expensive

Page 13: Collaborating for innovation 2010

R&D Collaboration

We expect a number of stakeouts of companies with large R&D units, and increased M&A activity. This may

precipitate further alignment of R&D unit operations, including process and tool harmonization, and shared ways

of working

In-house R&D is increasingly a consolidated function with a strong majority of companies maintaining only a

handful of distinct facilities, with North America still the preferred location

Complementing this is the recognition of the value of collaborating beyond organizational boundaries.

Compared with 2008, satisfaction levels increased for key tools such as open innovation environments to

collaborate with external parties, and information systems to support internal design collaboration

R&D Strategy in the Next Three Years

18%22%15%19%

11%10%12%22%

52%33%

71%64%

61%

19%35%

7%11%

High Tech

7%

100%

Consumer Products & Retail

TotalIndustrial Products

5%

Automotive, Aerospace & Defense

6%

Increase centralization

Increase decentralization

Increase In-house R&D

Increase R&D outsourcing

Page 14: Collaborating for innovation 2010

Customer Collaboration

Many innovations still fail due to the inability to meet customer needs, the CPR sector being the least successful

in gathering or incorporating customer ideas into product development

Many companies would like to involve customers more effectively into their innovation process, but they face

hurdles such as long development cycles and complex products. Our work with clients leads us to believe that

customer involvement is possible for just about any business

Percentage of New Products, Launched Over Past Three Years, Shaped by Customers During Development

49%

27%34%

59%

46%

18%

32%28%

25%

26%

23%29% 24%

9%

18%

5% 10% 11% 8%6%5% 2% 3%

Industrial ProductsAutomotive, Aerospace & Defense

2%

Consumer Products & Retail

100%1%

High Tech Total

60-79%

Less than 20%

80-100%

20-39%

40-59%

Page 15: Collaborating for innovation 2010

Supplier Collaboration 1/2

Companies are undertaking a number of supplier collaboration initiatives, which suggests that suppliers are

being seen more as partners in driving innovation, although the importance of being innovative in reducing costs

persists

Importance of Intellectual Property Control as Criterion during Partner Selection

17%

37%

13%

24%

66%

59%

43%

64%

58%

17%

34%

10%22%

15%

10%7%

100%

Total

3%

Consumer Products & Retail

1%

High TechIndustrial ProductsAutomotive, Aerospace & Defense

Not important

Somewhat important

Important

Very important

Page 16: Collaborating for innovation 2010

Supplier Collaboration 2/2

The overall picture clearly indicates that supplier collaboration has become a standard in all industry sectors and

that companies employ various models of supplier collaboration to fulfill the market demand

Effectiveness of Involving Suppliers in the Innovation Process

6%

32%24%

64%

21% 21%

46%49%

24%

49%48%

14% 20%

6%5%6% 5%7%

26%23%

100%

Total

1%

Consumer Products & Retail

3%

High TechIndustrial ProductsAutomotive, Aerospace & Defense

Good

Very good

Excellent

Poor

Adequate

Page 17: Collaborating for innovation 2010

Agenda

Emerging Multinationals – About The Study

Research Methodology

Recommendations

Page 18: Collaborating for innovation 2010

Our recommendations for companies wishing to enhance their collaborative

innovation and to become innovation leaders in the upturn:

Make business innovation a fully integrated part of your corporate strategy

Develop and implement appropriate innovation performance measurements or metrics

to aid sound decision-making

Reshape R&D to effectively enable collaborative innovation

Refine and maintain customer collaboration

Build and scale up strong supplier networks for collaborative innovation

Recommendations

Page 19: Collaborating for innovation 2010

www.capgemini.com

Together. Free your energies

For more information, contact:

Udo Lange

+49 151 4025 1159

[email protected]

Mark Heidenreich

+1 630 660 5464

[email protected]

Koen Klokgieters

+31 651 123259

[email protected]

Nick Gill

+44 870 904 5699

[email protected]