Indian Institute of Management - Kozhikode

EPGP 08

Product Innovation and Development

Quarter VII – Assignment

EPGP-08-008 - Anwar Areekkal

EPGP-08-059 - Maria Vinutha P
EPGP-08-061 - Midhila K S
EPGP-08-109 - Sreekanth Menoth

1
Why does smart firms which have been innovators in the past find themselves in
difficulties under discontinuous conditions?

Innovation involves incremental improvements to disruptive breakthroughs that

create new industries and markets. Incremental innovations are critical for revenue
streams and improving market share. However substantial growth over the long
horizon requires discontinuous or disruptive innovation. Michael Tushman and
Charles O’Reilly suggest that discontinuous innovation involves breaking with the
past to create new technologies, processes, and organizational “S-curves” that
result in significant leaps in the value delivered to customers. Discontinuous
innovation involves “disruptive technologies,” “discontinuities,” or “radical
innovations” that permit entire industries and markets to emerge, transform, or
disappear.
Discontinuous innovations are more often technological changes than white space
opportunities created by changes in government regulations .However the ultimate
goal is to create major new revenue streams and sources of corporate wealth by
exploiting these technological breakthroughs. Contemporary strategists have given
us many examples of organizations that have created dramatic discontinuities-
Sony’s Walkman, Chrysler’s minivan, Netscape’s Navigator-and their contributions
to customer and shareholder value have been immense. First, we believe
discontinuous innovation involves creating new forms of customer value within
existing or new markets. Second, by pursuing discontinuous innovations,
organizations create new competitive space or displace existing methods of
delivering value to customers
The major steps as identified by strategists in identifying and creating
disruptive/discontinuous innovations are:

Strategy One: Radical Cannibalism

Cannibalism in common parlance is an incremental activity-replacing today’s products

with next generation technology-and the competition is usually not far behind in
introducing similar technology and customer value. By contrast, radical cannibalism
involves replacing one’s own successful products or services with fundamentally new
technologies or processes, providing a significant leap in customer value. This allows you
to revolutionize the industry by providing a level of customer value far exceeding what
has historically been possible. Not only does radical cannibalism result in increased
market share, but often involves increasing the market converting the non users into
users.
For eg Ethicon is a subsidiary of Johnson & Johnson and leader in traditional medical
stitching technology. Ethicon has identified a potential threat to its core business-Closure
Medical Corporation’s Dermabond, a tissue adhesive recently approved by the FDA,
Dermabond has been recognized as a technology likely to replace stitches as the primary
method of suturing wounds. Rather than risk losing its business Ethicon has invited
Closure Medical into a strategic partnership to promote the startup’s revolutionary
technology.
Hypothesize obsolescence - Explore competitive strategies, breakthrough
technologies, and customer behaviours that could make what you do obsolete. This
could often end up in an idea that could be a potential disruptive innovation.
Scan startups. Start-ups often represent the seeds of industry reinvention. When
major players spot high potential upstarts, mutually beneficial strategic
partnerships can be created.

Strategy Two: Competitive Displacement

Competitive displacement resembles radical cannibalism, but instead of displacing

your own products and technologies, you displace those of your competitors.
Because your disruptive innovation targets a market unrelated to your current
business, you can blindside industry incumbents by providing their customers with
a surprising, creative, more effective mechanism for creating value.
One such introduction was that of GM’s Hughes Electronics introduced DirectTV, a
digital satellite system that transmits television and movies directly to the home.
Since traditional cable television operators did not perceive DirectTV as a threat it
was an unparalleled success at first.
Elevate your business charter. Successful opportunity identification by broadening
strategic boundaries, Explore tangential industries. for successful opportunity
identification.
Strategy Three: Market Invention
Market invention is probably the most common approach to corporate growth
involving some modification of technology and a great deal of creative market
research, new applications are created new that provide customer value within an
existing industry. Market invention leverages what the organization already does well
through logical extensions that touch customers in today’s markets

Strategy Four: Industry Genesis

Industry genesis results from the introduction of new-to-the-world technology and
customer value.
Generic Strategies that could be adopted are miniaturisation and combining
functionality.
Managing the Paradox

While safe incremental innovations receive leadership support, there is broadbased

resistance. to breakthrough ideas that represent substantial change that may impede
migration to the next organizational S-curve. Above all, leadership must establish an
environment conducive to discontinuous innovation-through internalizing the quest for
innovation.
Discontinuous innovation flourishes through qualitative speculation and trial and error.
For example, conventional wisdom suggests that market research and quantified
projections indicate the viability of an innovation. With discontinuous innovation,
however, market research acts as a catalyst for developing and enhancing new ideas.
After all, customers seldom articulate needs they don’t know they have.
Discontinuous innovations may often take years to identify, develop, and introduce,
formal reward systems must leave room for sanctioned discontinuous innovation
processes that include the acceptance of failure.
Sustained growth requires creation and re-creation by leadership and by the
organization as a whole. Long-term growth is contingent on creating the next S-curve
discontinuous innovation becomes a collective imperative.

Ref Source: http://www.innovation-point.com/article.htm

Further to the above points, smart firms which have been innovators in the past
find themselves in difficulties under discontinuous conditions could also,

1. To continually replicate innovation success, you must be insight driven; you must
start with a meaningful consumer or customer issue then, and only then, move to
ideas.
2. Entrepreneurs are awesome at coming up with those ideas, jumping into action
and getting things done, which means they are idea and prototype factories.
Unfortunately, they often lack the discipline, rigor and time to get ideas to market.
3. Large corporations have the bandwidth, reach, channels, relationships and cash
to do quantitatively and qualitatively robust insight work. Unfortunately, they often
deny what the world is telling them. But they have the ability to see the future if they
want to. This power is priceless.
4. Most large corporations were designed to deliver short-term profit and mitigate
risk. In essence, this means to be competent, they kill or castrate any disruptive idea
because, by definition, these ideas are threatening.
5. The best thinkers in large companies are often frustrated because they have
solutions that would save the firm that go ignored. A great example of this is Steven
Sasson who invented the digital camera while working at Kodak—an idea that Kodak
continually ignored because they believed, correctly, that they had built a different
business.
What might they do to avoid it?

1. Become more customer focused and insight driven.

2. Past Successful innovator companies should learn to outsource important
areas like new business model, new channel strategies and Uber cheap version
of themselves – either through third party incubators, conglomerates,
venturing partners and consultants.
3. Large firms should give insights and funding to entrepreneurs and partner
with them for new disruptive ideas.

Ref Source: https://www.forbes.com/sites/mikemaddock/2016/03/31/the-innovation-paradox-entering-the-next-

chapter/2/#752e041a7dbb
Think about your company – What disruptive innovation/technologies will affect
your organization? What preparations are needed to meet this challenge?

Accenture has developed an approach to assess digital value potential and

define digital strategy for Innovation & Product Development (IPD)

•Approach to Digital Strategy for Innovation & Product Development

•Latest & greatest on Digital enablers for digital transformation
•Accenture approach for digital transformation
•Accenture approach to achieve disrupting innovation in the NEW

Confidentiality Note: The data represented here are actuals to the extent permissible. Some of this data might be of
competitor interest. Request due discretion in sharing this report or data represented in this report.
Analysis Contents

1. Approach to Digital Strategy for Innovation & Product Development

2. Latest & greatest on Digital enablers for digital transformation

3. Accenture approach for digital transformation

4. Accenture approach to achieve disrupting innovation in the NEW

 1. Approach to Digital Strategy for Innovation & Product Development
Accenture has developed an approach to assess digital value potential and define digital
strategy for IPD along three business dimensions :

Accenture Digital Framework – Internal & External Focus

Market
Relevance
Digital Customer Digital 3 Business Dimensions :
1.1 2 Business
Do the right Do the Right Things :
1.1
things apply digital technology to
Digitize innovate and ultimately delight
Customer’s Disrupt in the NEW digital
your customers
experience era
Disrupt your Product &
External Services offering with
Focus digital 1.2 Do the Things Right :
apply digital technology to
achieve operational excellence in
1.2 Digital Innovation execution and Product
Life-cycle Management
Operations

Do the things right

Disrupt in the NEW :
Digitize Innovation & 2
re-invent your product and/or
Product Development
services offering leveraging
Internal Focus opportunities related to the
Operational
new digital era
excellence

11
1. Approach to Digital Strategy for Innovation & Product Development
Our approach recognizes two different paths to Digital Strategy definition
depending on targeted business dimensions and the maturity of digital enablers

Business Dimensions Disruption Transformation

Value
Do the right
things
Digitize
Customer’s Disrupt in the NEW
experience digital era Products & Services
Disrupt your Product & disruption through Customer
Services offering with
fast prototyping experience
digital
leveraging and I&PL operations
extended transformation
digital innovation through digitization
ecosystem projects
(start-ups, …)

Do the things right

Digitize Innovation &
Product Lifecycle
Maturity
 Analysis Contents

1. Approach to Digital Strategy for Innovation & Product Lifecycle

2. Latest & greatest in Digital Innovation & Product Development

3. Accenture approach for IPD digital transformation

4. Accenture approach to achieve disrupting innovation in the NEW

 2. Latest & greatest on digital enablers for IPD transformation
Companies are facing today multiple challenges in Innovation & Product
lifecycle to remain customer relevant and operationally competitive

1.1 1.1 1.1

Social & environmental
Customer volatility & Ever more demanding &
aspects getting more attention
segmentation educated Customers
from customers/NGOs

1.2 1.2 1.2

Cost & hit rate ratio of new Increased Product Portfolio & Shorter Development &
product development Product Complexity Production Lead Times

1.2 1.2 1.2

Opportunities related to Increased complexity and
Global Footprint & local
exponential technological multiplicity of regulatory
relevance
developments framework

1.2
Limited skills/resources to Innovate & Develop Products/Services
2. Latest & greatest on digital enablers for IPD transformation
Digitalization is addressing those challenges, providing Innovation & Product
Development capabilities to delight customers & achieve operational excellence

Digital Innovation & Operations &

Product Life-cycle Management Company Projects
Steering
by data
NGOs

Open Development
Start-ups Partner
Mobile
PPM technologies Social
Listening
Connected
Manufacturing
Devices Open Innovation
Open Innovation Services
Platform
Partner
Digital Product & Connected
Customer Process Design Devices Customer

Regulatory authorities
IoT & Digital Product Digital Customer
Analytics Intelligence
Social Networks /
Web communities 3D
Virtual Printing
Reality Innovation
Portfolio 3D Printing
3D printing
Research brokers
Clusters
Suppliers

Research & Concept Portfolio Technology / Development Constant

Ideation Development Management Platform Devt & Launch Innovation
2. Latest & greatest on digital enablers for IPD transformation
IPD Digitalization leverages latest technological opportunities to achieve successful customer
centric Innovation & Product Development
Customer Intimacy Digital Levers

Mobile Technologies : All technologies enabling interactions and information exchange via mobile devices
(smartphones, tablets etc.) to support product offering testing and real time consumer feedback

Social Listening : Ability to gather customer centric insights through web listening to develop target idea or product
testing, collect product improvements opportunities or services development opportunities via continuous feedback
loop

Open Innovation & Crowd Sourcing Platform : Collaboration platforms enabling to reach an open or targeted array of
customers to test concepts and sense requirements, collect new ideas

Connected Devices: Environment in which electronic devices, wearable or enabling application specific consumer
interaction, are provided with unique identifiers and have the ability to transfer data over a network without human to
computer interaction thus enabling usage and customer insights
Digital Customer Intelligence: Personalized analytics developed through usage data and/or customer preference
listening through social networks, web sensing, that enable to inform ideation process, product portfolio management
and concept development process
3D Printing : Also known as additive manufacturing (AM), refers to various processes used to synthesize a three-
dimensional object. These objects can be of almost any shape or geometry, and are produced from a 3D Model or other
electronic data source.

Innovation Portfolio Management Tools : Tools enabling to deploy a consistent steering of innovation funnel while
implementing a cross functional and fact based approach to ideas and concept valuation

Virtual Reality & Mixed Immersive Reality : Artificial environment that is created with software, presented to the user
in such a way that the user suspends belief and accepts it as a real experience environment

16
2. Latest & greatest on digital enablers for IPD transformation
IPD Digitalization leverages latest technological opportunities to achieve
Operational Excellence in Innovation & Product Development
Operational Excellence Digital Levers

Program / Project Portfolio Management Tools : Tools enabling to manage time, resources, skills, budgets, issue
resolution and risk mitigation of each program / project while providing central visibility and collaboration platform to
ensure efficient and timely planning and scheduling of teams across the company

Open Innovation Platform: tools that enable to improve efficiency and spread of ideas, concepts and solutions
exchange/selection/refinement within and outside of the company

Digital Collaborative Platform : set of tools that enable collaborative innovation and product life-cycle management
across companies, functions, geographies, thus enabling to achieve efficient and agile collaboration within desired
ecosystem and across the entire operating model (ex : iObeya, …)
Operations & Projects Steering by Data : approach that consist in monitoring product development operations &
product introduction projects based on analytics developed from Digital Design and Product Life Cycle Management
tools to enable to proactively predict operations & projects success or failure
Digital Product & Process Design: tools that enable to digitize product design (eg. CAx tools), including product digital
performance evaluation (eg. via performance prediction,,…), digital manufacturing process design / simulation, thus
enabling to reduce time to market, product fit & performance optimization
3D Printing : refers to various processes used to synthesize a three-dimensional object. These objects can be of almost
any shape or geometry, and are produced from a 3D Model or other electronic data source. They can be used for rapid
prototyping, to provide rapid iterations capabilities, customer testing
Connected Workforce: provide constant synchronization of Innovation & Product Development workers with latest
accurate product / process information and body of knowledge thanks to digitized information flows within the
company and across the company ecosystem thus enabling efficient innovation / development execution and optimized
utilization / deployment of skills and resources
IoT & Digital Product Analytics platform: provide consistent & permanent information flow and analytics between
commercialized products and Innovation / Product Life-Cycle workforce thus enabling constant innovation, and
proactive improvement of services / product value proposition

17
 2. Latest & greatest on digital enablers for IPD transformation
Companies have various level of maturity depending on digital enabler

Maturity scale per Customer Intimacy lever (1/2)

DIGITAL
Integrated mobile channel Listen to develop new products, Co-Ideate, Co-Design, Co-develop Understanding usages, &
adapt existing products proactively enriching products /
services
Integrate customers in Continuous product
product development improvement where
thanks to digital experience from
collaboration platforms customers is used to
Use mobile device Use of social media upgrade products
(tablets, …) and light monitoring to launch
digital 3D to enable and adapt solution
consumers take the Timberland put Added connectivity to its
according to instruments to allow
driving seat in the customers feedbacks consumers in the driver’s
design of new cameras seat via digital remote monitoring but
collaborative design tor now uses it to provide
better ideation & digital service as well. Service
technicians can access
Digital Maturity

crowdfunding for
successful product off-site, fix it by
introduction rebooting it, deliver a
software upgrade
DIGITIZED
Product Testing apps Listen to develop new products Digital feedback on products Offering new services along the
for upgrade product

After gathering and

Identify demand for Pebble team added analyzing data for each
new products thanks features, based on machine deployed at a
to social listening (eg. actual feedback from work site, Caterpillar’s
Feria Wild Ombre users about what they service teams advise
product) would pay for customers how to
optimize their fleet

TRADITIONAL
Email Brand web listening Products pushed the market No customer data on product
usage

Mobile Social Open Innovation & Connected

Technologies Listening crowd sourcing platforms devices

Copyriht © 2016 Accenture All rights reserved.

2. Latest & greatest on digital enablers for IPD transformation
Companies have various level of maturity depending on digital enabler

Maturity scale per Customer Intimacy lever (2/2)

DIGITAL
Determine product Customized product Collaboration platform for ideation Experience the product at different
characteristics success based on development, from design to & real-time portfolio management stages of development with
analytics & models production customer
Innovation management
Selecting, producing Thingmaker enables platform has transformed
video content based on customer to produce its the way the company
customer profile & usage own toys, based on his collects, prioritizes and
of Netflix services own design or from implements ideas from
Mattel/the community employees (propose Use to validate design
ideas/vote for solutions with customers
ideas/contribute to ideas) (ergonomics and
premises equipment)
Gather consumer Plan to get 3D printed
insights to design & cars where customer can Kickbox program to
develop new products customize some Increase innovator
based on deep customer elements effectiveness, accelerate
Digital Maturity

preferences mapping innovation velocity, and

measurably improve
innovation outcomes.
DIGITIZED
Predict trends based on social Getting continuous & rapid Suggestion toolbox Experience product before going for
listening capability customer feedback on products prototypes
in design / development Virtual reality to improve
product development &
Design & prototype design and reduce time to
finished product market by 50%
packaging for iterative Suggestion tool box
testing by customers to IdeaStorm gathered General Mills injects
increase success rate of +24000 ideas and 550 innovation in Consumer
new product launch implemented (launched shopping experience and
in 2007) fuel growth by combining
Future lab program 3D store immersive
enables customers to simulation & customer
test 3D prototypes and insights for his Häagen-
send feedbacks Dazs premium ice cream
TRADITIONAL brand
Market segmentation & consumer Physical Mock-up requiring Fragmented / siloed team working No VR
mapping not linked to social assembly / sculpture on projects
listening (lengthy, not up to date)

Digital Customer 3D printing Innovation Portfolio Virtual Reality & Mixed

Intelligence Management Immersive Environment
2. Latest & greatest on digital enablers for IPD transformation
Companies have various level of maturity depending on digital enabler

Maturity scale per Operational Excellence lever (1/2)

DIGITAL
Enterprise-wide collaboration Open innovation & development Product development approach Intelligent data-driven decision
platform for projects portfolio platforms fully leveraging digital enablers making
management
Open innovation FastWorks / Lean Startup Provide managers with
concepts and digital methodology applied to data from design,
Track multiple product collaboration platforms to whole company to develop production to assess
development projects leverage the “wisdom of new products by short “real” status of program
schedule, cost & the crowd”, foster iterations and each aircraft,
resources with globally innovation (in/outside)
dispersed teams, Predicts 100% of the
Connect & Develop impacts whenever a new
constrained capacity (eg. program leveraging open
testing), while providing modification needs to be
innovation platform to Digital Visual Management applied to the Aircraft
overview to top access new technologies
management to enhance collaboration (thus avoid costly late
with maximum efficiency across teams & change impacts),
(dashboard)
geographies to speed up & concessions number to
Digital Maturity

Internal Social Network secure quality of product expect with program

to boost innovation and development ramp-up
digital collaboration
DIGITIZED
Same application / template but Digital ad-hoc contribution with Collaborative PDM, portal & wikis Access to digital & centralized data to
no dependencies and overview partners take decision

Research and portfolio

Via PLM geographically and data resides in one virtual
functionally spread teams place and provides “one
Open Lab platform to ease can collaborate to develop version of the truth” that
relationships with partners new products with reduced is available for everyone
time to market, accelerate to use to address the
re-use and build on myriad decisions that
platform arise

TRADITIONAL
Projects handled standalone Internally managed innovation Teleconference, screen sharing, Declarative data
data base with file exchange

Program / Project Portfolio Open Innovation Platform Digital Collaborative Operations & Projects
Management Tools Platform Steering by Data
2. Latest & greatest on digital enablers for IPD transformation
Companies have various level of maturity depending on digital enabler

Maturity scale per Operational Excellence lever (2/2)

DIGITAL
Fully digital multi-functional 3D for new product design Remote access to Virtual+Physical Act upon data from the field to
process product (display/update) upgrade existing & new products
Reduce cost of prototype
by going digital Product is designed
Reduce from months to with new geometry, Direct access to
weeks system engineering only possible with experts by Smart
& integration via virtual 3D printing, Glass for shopfloor With the advanced
functional modeling enabling reduced operators / field connectivity of its Autopilot
Model & simulate disease weight, reduced service engineers system, Tesla can release
mechanisms / dysfunction material waste and update remotely the car
to accelerate molecule software and add new
identif. and new drug dev. features, based on
“Product Link” to experience from its
E2E digital continuity Car design with access to product +1100000 cars in use.
with human immersion reduced number of data in the field,
in virtual reality to elements, due to monitor & track asset
Digital Maturity

simplify design & style / 3D printing usage condition for product

manufacturing / service upgrades /
maintenance
DIGITIZED
Digitized Product or Process 3D for prototypes Remote access to provide Field performance analytics for
information flow information maintenance operations and design
of new products
Digital connected twin
Mobile apps available to diagnostic current
Leading CPG companies Reduce time & cost to work package products to improve
leverage digital continuity for prototype managers to access new products (also
from digital consumer testing production, reducing status, design fitting existing base of of
to supplier collaborative total lead time & cost information update products with sensors)
development to enhance (mostly for engine) and enrich data (eg.
innovation speed & success workflow tasks)
Router's performance
analytics helps improve
designs
TRADITIONAL
Fragmented application landscape No 3D printing No direct access Untapped data/no data
causing issues between product
design teams and with process
teams

Digital Product & Process 3D Printing Connected Workforce IoT & Digital Product
Design Analytics platform
Analysis Contents

1. Approach to Digital Strategy for Innovation & Product Development

2. Latest & greatest on Digital enablers for digital transformation

3. Accenture approach for IPD digital transformation

4. Accenture approach to achieve disrupting innovation in the NEW

3. Accenture approach for IPD digital transformation
Innovation & Product Lifecycle digital scan is performed in 4 steps

1 2 3 4
Assess impacts & Define business case and
Select digital levers Assess digital readiness
opportunities plan next steps

Define the Business

Perform the Heat Map Assess readiness Close the Gap
Case & Roadmap

1. Perform a Prime 1. Assess readiness for 1. Assess impacts on 1. Quantify Business

Value Chain to each selected digital organization, process, Case & Value Drivers
understand how work levers through: people and systems
actually gets done, 2. Develop next steps
exposing waste and • Capability 2. Perform Proof of and immediate actions
complexity assessment Concept (when
necessary)
2. Select appropriate • Lever’s assessment
digital levers 3. Qualify opportunities
addressing the
operational issues,
applying successive
lenses:
- Complexity
- Time traps
- Rework
- Non value added
- Others..
3. Accenture approach for IPD digital transformation
Step 2 : Assess digital readiness

1 2 3 4
Assess digital Assess supply chain Define business case
Select digital levers
readiness &production impacts and plan next steps

1 2 3 4
Assess “Do the right Assess “Do the things Assess technical
Define digital readiness
things capabilities right” capabilities applicability

Innovation & Product Life-cycle digitalization is a performance enabler, that needs to be built on solid foundations and a
certain level of maturity in terms of Doing the right things upstream Innovation & Product Life Cycle execution.

Do the right things Capabilities Readiness Assessment Dimensions

Define Innovation Research & Identify Develop
Strategy Discover Opportunities Concepts
Processes
Situation  Open Innovation
- Technology Strategy Definition Approach-
Maximize Sources of Ideas
[client division] is a $648MM
equipment, apparel, and footwear Do the Right Things  World-class Consumer Insight Generation
company that offers an array of Institute the Best Ideation  World-class Concept Development/Incubation
products across all consumer and Concept Dev.  World=class Product Planning
Processes
[product] segments. The [name]  World-Class Technology Landscaping
Obtain a high quantity
industry was severely impacted by and quality of ideas Utilize the best innovation  Ring-fencing of Breakthrough Innovation
the financial downturn. However, Resources
key industry metrics were already org structure
 Resource investment Aligned with Segments
trending downward prior to the
recession. Employ best front-end
resources

Complication  Optimal Selection Criteria and Process

Utilize the best Portfolio  Codified Decision Rights
Select the Best Ideas Management Approach  Innovation Capacity Understanding
Although [client] has high brand
recognition, it has been unable to
grow market share and  Mature, Lean Development Process
Rapid Speed to Market  Optimal Development Org Structure
profitability due to product
 World-Class Tools and Methods
development speed and supply Do the Things Right
chain agility.
 Design for Optimal Complexity
Enable Downstream
Be Fastest to Market  Platform Development Approach
Optimization
Without Sacrificing  Component Standardization

Downstream  Design to Make

Key Question Performance Understand product  Improve Forecast Accuracy
demand  Rapidly Update and Improve Forecast
How does an innovative Throughout the Product Life Cycle
consumer equipment company  Agile Manufacturing and Fulfillment
Create a Responsive, Responsiveness to
drive profitable growth through Demand Changes  Deepen Vendor Partnerships and Improve
operational excellence? Effective, Integrated Vendor Performance
Supply Chain
 Effective Postmortem Reviews
Effective Feedback Loops  Continuous Improvement Capability

Idea portfolio Portfolio Open Innovation Product Portfolio

Management Monitoring Measurement Management
Governance
List of improvements opportunities:
Impact of benefits on portfolio value - Strategic Innovation Profile - - Segmentation model with clear prioritizations -
Innovator City traffic
Improvement Opportunities Effort (Low, Medium, High) Benefits (Low, Medium, High) ILLUSTRATIVE Traffic type
Low-medium High Bus rapid
Commuter Line haul Tour & Charter
£ 412m value increase in traffic traffic traffic
Opportunity 1 e.g. Low e.g. High Incremental Optimistic Scenario Niche Performance
passenger passenger transit
Product type flow flow
growth (£m)
198 Fav. 16 Strong 11
200 172 Low Floor Strong 9
Benefits / Efforts 150 136 142
6,4 Low 5,5 Ave.
124 147 Strong 3 Strong 13 Strong 4

Bus
132 135 Low Entry 0,4 High
116 126 8,1 High 1,5 Ave. 3,2 High
100
Incremental High Floor, Fav. 17 Strong 12 Dom. 8 Fav. 10
growth (£m) 50 > 16 ton 4,0 Low 1,6 Ave. 0,4 High 14,5 Ave.
147
150 132 135 High Floor, Weak 18
126 0
116 12-16 ton 24,1 Low
Y1 Y2 Y3 Y4 Y5 Standardized 1 2 3 4 5 Customized Weak 21
Basic
Next Steps: 100
Benefits1 £ 188m value increase in Simple body 4,8 Low
124 124 chassis 20 22
50 Conservative Scenario Eco. Weak Weak

CoachCoach
77 body 6,3 Low 0,8 Low
Define priorities (Quick Wins, etc.) 0
27
9 237 772 Basic Fav. 14 Tenable 19
Medium body 5,5 Ave. 3,9 Low
Y1 Y2 Y3 Y4 Y5 +412 117 Fav. 15 Strong 5
chassis Eco.
Define a transformation roadmap 57 body 3,5
s
Ave. 2,0 High
361
Luxury Weak 23
Additional growth from Optimistic Benefits Price Serve all body 0,2 Low
Additional growth from Conservative Benefits Strong 2 Strong 1
Eco.
Current incr growth from Innovation in Pipeline Advan. body 10,8 High 13,1 High
Current profile chassis
Target incr growth from Innovation Current Productivity Increased Increased Potential Luxury Fav. 6
Fast follower
pipeline value Increase sales incr Focus on pipeline value body 8,6 Ave.
(Y1-5) pipeline due Breakthrough (Y1-5) Dom. 7
Desired profile Conver. 0,7 High
to Customer Innovations
Centricity Non existing x High priority Competitive

Copyright © 2013 Accenture All Rights Reserved. 19 8 segments x Medium priority

x Low priority
position
Segment /
market size (MSEK)
Priority
Strategic
importance

Innovation Innovation Talent & Talent

Leadership Culture Performance Mgt Acquisition
People & Culture
Market share Price range ILLUSTRATIVE
estimation estimation
Talent
Market size Life cycle Market segment Technology recruitment &
estimation length estimation priorities priorities management

Cash flow Probability of Portfolio Strategic

estimation commercial Fit
success Innovation efficiency
Human
Net Net Expected performance Training
Present Commercial KPI
Value Innovation Value Maximized
Business Portfolio
WACC
Case
Portfolio
Optimization
enterprise
Value value

Development cost Probability of

estimation development Portfolio Balance
success

Resource Time-to-market Risk Investment

requirements horizon Culture Collaboration

Copyright © 2009 Accenture All Rights Reserved. 13

Innovation Knowledge Complexity IP

Methods Management Management Management
Tools & Methods Segment Priority

1
2
3
4
5
6
7
8
9
10
- Portfolio strategic fit - - Portfolio investment horizon -

Investment
11

Enablers
12
13 Long term / high risk
14
15 Medium term / medium risk
16
17 Short term / low risk
18
19
20
21
22
23
24
25
26
27
0 10 20 30 40 50 60
Start Projects PM Projects
Scenario 1 Scenario 2 Scenario 3
Budget

- Portfolio balance - - Portfolio complexity -

Actual cost / spend Target cost / spend

Scenario 1 Scenario 2 Scenario 3
distribution distribution
% products
Advanced
Cost Ratio based on 75% 95% 87%
Engineering Advanced 75% 95% 87%
11%
22%
Engineering
platforms
20% Cost Ratio
Quality
16%
35% # part numbers 6673
6673 4004
4004 4640
4640
Quality
10%
# product
specifications 245
245 320
320 288
288

Market
% customer
Vehicle Adaptations adaptations 12%
12% 24%
24% 20%
20%
Vehicle
Development 29% Market
Development
22% Adaptations
20%
15%
3. Accenture approach for IPD digital transformation
Step 2 : Assess digital readiness
1 2 3 4
Assess digital Assess supply chain Define business case
Select digital levers
readiness &production impacts and plan next steps

1 2 3 4
Assess “Do the right Assess “Do the things Assess technical
Define digital readiness
things capabilities right” capabilities applicability

Innovation & Product Life-cycle digitalization is a performance enabler, that needs to be built on solid foundations and a
certain level of maturity in terms of Doing the things right during Innovation & Product Life Cycle execution.

Do the things right Capabilities Readiness Assessment Dimensions

Develop Develop Develop Cial Ensure Product
Offering Assets Products Sustainment
Processes
Health & Wellbeing Adding value and ease to Increasing reach in
The arrival of Cosmeceuticals daily life emerging markets Incontinence ($6.1bn)
H
i
Panasonic and Baby Care ($8.0bn) Depilatories ($4.3bn) g
Estee Lauder is h Low Growth High Growth
Shiseido's Ultrasonic Handy Sun Care ($8.5bn) Cotton Wool/Buds/Pads ($2.2bn)
launching smaller 200

(No. of brands accounting for 40% of market share)

Mist converts beauty serums Tissues ($8.9bn) 0.8% 0.4% Sets/Kits
bottles of Clinique
Pro-Derm into a micro-fine mist that Wipes ($9.8bn)
Happy Perfume to 1.7% 1.5% 55 Average CAGR: 5.4% Fragrances
cosmeceutica hydrates and energises the Skin Care ($92.1bn)
make it more Sets/Kits ($17.1bn) 1.8% 1.1%
l skin range skin affordable
Where there is a clear
Deodorants ($18.9bn) 3.2% 50 segment leader (twice the
1.6%
3,5% 17.0% 45 market share than the next
Sanitary

Level of Competition
Colgate’s P&G’s Ariel 6.5% competitor in line), the
Protection ($25.3bn)
SoftSoap Excel for Unilever 40 bubble is coloured green.
Nutri-Serums washing at Sunlight Hair Care
colder 4.7% 35 Cotton Wool/Buds/Pads
sachets' small Men’s 12.9% ($70.3bn) Skin Care
temperatures size make the Grooming 30
product ($31.0bn) 5.7% Hair Care
affordable in 25
Nigeria Toilet Paper
JnJ’s Aveeno
Bath and 20 Bath and Shower
Vitality Reckitt Benckiser’s Air 6.55
Shower
Wick Odour Detect™ is an 9.1% 15
automatic spray with
($35.1bn) Colour Cosmetics Men’s Grooming
6.8% Colour
Wipes Sun Care
odour sensor technology, Cosmetics 10 Baby Care
which automatically Nappies/ ($49.2bn) Oral Care Deodorants Incontinence
P&G’s Naturella, a low 5
detects and overcomes Diapers/ Sanitary Protection
Affordable premium priced sanitary pad, now 7.7% L Tissues Depilatories Nappies/Diapers/Pants
unpleasant odours Pants 6,9%
technology based product the lead in feminine care o0
lines e- L'Oréal’s new Youth in Mexico, Brazil and ($36.7bn) 7,3% w 0.0 4.5 5.0 5.5 6.0 6.5 8.1
Code is priced at €16 Oral Care Fragrances ($41.8bn)
Russia Market Growth
($37.3bn) Toilet Paper ($39.7bn)
CAGR % (2011-15)

Define Devt. Define Devt. Define Program / Project

Strategy Models Partnerships Portfolio Mgt
Governance Discover

Do the Right Things

Innovation and Technology
Strategy
Market Analysis &
Opportunity Identification
Concept and Platform
Development
Project Prioritization and
Selection
Develop

Feasibility Demonstration

Design for Manufacturability /

Quality

Project / Program Mgmt

Scale-Up
Commercialize

Optimization
Launch and Roll Out
Management

Multigenerational Innovation

Strategic Supply Chain

Partnerships
Plan / Build

Do the Things Right

Product Complexity Dynamic Integrated
Planning
Optimize Supply & MFG
Base
Material and Supply
Planning

Rapid Manufacturing
Fulfill / Retire

Agile Replenishment

Segmented Delivery Model

Product Retirement
Management
Product Postmortem
Reviews

Innovation Operational Excellence Connective Tissue Supply Chain Operational Excellence

Inn. Governance and Org Structure End-to-End Governance SC Governance and Org Structure

Processes, Tools, and Methods Integrated Processes Processes, Tools, and Methods

Open Innovation System and Networks Integrated Systems Open SC Systems and Networks

People and Culture

Behaviors / Culture / DNA
Talent and Resource Management
Performance Management
Internal / External Collaboration

Organizations Workforce People Performance

Management Management Development Management
People & Culture - PPM tool (resource management) -

Product Life Product Costs Complexity Sustainability &

Cycle Mgt Management Management Regulatory Mgt
Tools & Methods
Enablers
3. Accenture approach for IPD digital transformation
Step 2 : Assess digital readiness
1 2 3 4
Assess digital Assess supply chain Define business case
Select digital levers
readiness &production impacts and plan next steps

1 2 3 4
Assess “Do the right Assess “Do the things Assess technical
Define digital readiness
things capabilities right” capabilities applicability

Once the pre-requisites are confirmed, a list of data needs to be collected to assess from a technical standpoint the feasibility of
each lever.

Technical applicability table

Lever Technical Input Lever Technical Input

Mobile Digital  Social Listening capability
 IT Security policies customer  Market data
Technologies
intelligence  Product technical characteristics

 Dimensional & weight specs

Social
 - 3D printing  Material specs
Listening
 Customization level

Open Innovation
Innovation  IT Security policies Portfolio  IT Security policies
platforms Management

Virtual Reality
Connected & Mixed
 Relevant data exportable & readable  Digital Product & Process data
Devices Immersive Reality
3. Accenture approach for IPD digital transformation
Step 2 : Assess digital readiness

1 2 3 4
Assess digital Assess supply chain Define business case
Select digital levers
readiness &production impacts and plan next steps

1 2 3 4
Assess “Do the right Assess “Do the things Assess technical
Define digital readiness
things capabilities right” capabilities applicability

Once the pre-requisites are confirmed, a list of data needs to be collected to assess from a technical standpoint the feasibility of
each lever.

Technical applicability table

Lever Technical Input Lever Technical Input

Project  Cost data with enough granularity Digital Product  Connectors between CAx tools,
Portfolio (eg. time spent by resource) & Process with ERP/MES and tools (eg. CNC)
Management  Digital deliverables Design  Network infrastructure

Open  Dimensional & weight specs

Innovation  IT Security policies 3D printing  Material specs
Platform  Customization level

 Configuration Management
Digital Connected
 Digital Product & Process data, idea  Relevant data (ERP, PLM, pictures,...)
Collaborative  Network infrastructure Workforce exportable & readable
Platform  Information tracking system
Operations  Quality of the data IoT & Product
Steering by Analytics  Relevant data (ERP, PLM, etc.)
 Effectiveness of analysis and
Platform exportable & readable
Data interpretation
3. Accenture approach for IPD digital transformation
Step 3 : Assess impacts & opportunities
1 2 3 4
Assess digital Assess supply chain Define business case
Select digital levers
readiness &production impacts and plan next steps

1 2
Evaluate Business
Validate opportunities
impacts

Levers matrix Illustration

High

Challenge Implement

Benefits

Kill Possible
Low

High Effort Low

3. Accenture approach for IPD digital transformation
Accenture is mobilizing the most innovative companies for each lever to define the best digitalization
approach

Lever Partners

Mobile Technologies

Social Listening

Open Innovation & Crowd Sourcing

Platform

Connected Devices

Digital Customer Intelligence

3D Printing

Innovation Portfolio Management

Tools

Virtual Reality & Mixed Immersive

Reality
3. Accenture approach for IPD digital transformation
Accenture is mobilizing the most innovative companies in each category to
define the best digitalization approach

Lever Partners

Program / Project Portfolio

Management Tools

Open Innovation

Digital Collaborative Platform

Operations & Projects Steering by

Data

Digital Product & Process Design

3D Printing

Connected Workforce

IoT & Digital Product Analytics

platform
Analysis Contents

1. Approach to Digital Strategy for Innovation & Product Development

2. Latest & greatest on Digital enablers for IPD digital transformation

3. Accenture approach for IPD digital transformation

4. Accenture approach to achieve disrupting innovation in the NEW

32
4. Accenture approach to achieve disrupting innovation in the NEW
New approaches are required to achieve Products and/or Services disruption leveraging opportunities of
the digital era

11,000 of new Risk losing 1.5$ 82% of executive believe

startups every hour Trillion by not that they can learn from
collaborating startups

In 5 years revenue rise from Entrepreneurs don’t

9% to 20% by working with trust that large
entrepreneurs companies

Disrupt or be disrupted: leveraging the

innovation ecosystem is a business
imperative for all companies that want
to succeed
Source: Accenture research in the NEW digital era
4. Accenture approach to achieve disrupting innovation in the NEW
Our approach to Disruptive Digital Innovation is based on developing a funnel of opportunities
leveraging the innovation ecosystem & Accenture innovation enablers

1. Growth scan 2. Innovation Safari 3. Innovation Clusters 4. Fast Prototyping

4. Accenture approach to achieve disrupting innovation in the NEW
A systematic approach of scanning the market innovations is required to create
a steady pipeline for growth

2. Innovation Safari 3. Innovation Clusters 4. Fast Prototyping

Growth scan

GROWTH PIPELINE

• Identify new growth opportunities

Identify Growth
1 • Quarterly workshop analysis of the opportunities
Opportunities
• Ongoing search and spin of new ideas to participants

• Assess alignment with commercial strategy

Prioritise Growth • Review capabilities required to realise growth
2
Opportunities • Size the prize
• Prioritise the most attractive and winnable opportunities

• Understand what it would take to realise the shortlisted opportunities (key

3 Roadmap capabilities, partners, investment etc.)
• Develop high level roadmap and business case
4. Accenture approach to achieve disrupting innovation in the NEW
The innovation Safari discovers disruptions and the corresponding innovation
ecosystem that copes with them
2. Innovation Safari 3. Innovation Clusters 4. Fast Prototyping
Growth scan

Client Innovation
Disruptions Client Impact Workshop
environment ecosystem
detection assessment
analysis research

• Detect trends • Find potential • Quantitative • Detect startups • Show

and challenges disruptions and qualitative and companies innovative
in client Backed up by dimension of with ecosystem to
market, industrialized disruption innovations client
industry and market scan impact that solve • Link to
sector • Brainstorming • High level detected innovation
sessions with business case disruptions strategy
multidisciplinar
team, SME’s
academia, etc.
4. Accenture approach to achieve disrupting innovation in the NEW
Fast Prototyping Methodology

2. Innovation Safari 3. Innovation Clusters 4. Fast Prototyping

Design
Identify Client Evaluation & Launch &
Thinking Market Scan MVP – Pilot Run
Problem Pre-selection Scale
Session

• Define • Create a • Conduct a • Quantitative and • Pilot the • Generate an

challenges & multidisciplinary research for qualitative innovation/ implementation
requirements team innovation assessment technology plan
that a client is • Conduct a ecosystem with • Prioritize the leveraging • Design simple
facing to achieve brainstorming the required most attractive & startups metrics/
its strategic session finding technology winnable • Design metrics/ scorecard to
vison solutions to the opportunities scorecard determine
• Establish client´s problem • Establish with a • Measure & progress
innovation / new business client joint analyze the • Launch the pilot
agenda & launch models Innovation result at the
innovation • Engage with the Council, and • Improve MVP company´s site
challenge client to manage selecting initial • Measure,
initial ideas projects co- analyze, improve
prototyping & scale
 4. Accenture approach to achieve disrupting innovation in the NEW
Fast Prototyping Methodology implements the prioritized projects through
collaborating with innovators

2. Innovation Safari 3. Innovation Clusters 4. Fast Prototyping

Startups

Accenture

Open Innovation

Innovation
“Innovation Think tank
Safari Project Prototype Pilot Implement
Center” discussion
priorities

Lean start up

Accelerators,
academics,
VCs, external Large Company
SMEs… Innovators
Monetization
(HP, JDA, Intel, etc.)

Fast Prototyping links innovation strategy with its subsequent implementation