IT in Product Development

New product development is an imperative for enterprises of every stripe, and because it is of critical importance, it provides an opportunity for CIOs to show that they are business leaders and for IT departments to show that they are well aligned with enterprise goals.

For CIOs and IT organizations seeking to play an active role in bringing products to maturity, there are different paths that can be taken. For those operating in industries where IT really can't make a direct contribution to new product development, there is the participating route. New product development is an information-intensive process. The first step of participation usually involves implementing and integrating product data management (PDM) and product life-cycle management (PLM) tools with existing enterprise systems.

PDM uses controls and governance to capture and maintain a product's definition and related data from its inception to retirement. It is a core enabler of product-related collaboration and product life-cycle management.

PLM uses product information and business analysis to guide product decisions throughout the product life cycle. Its aim is to provide the greatest business value to the enterprise and its trading partners.

IT has more product development capabilities than most people realize, including many IT people. CRM and ERP systems managed by IT combine information and automation to bring the value proposition of the product or service to the customer. Core competencies in process design and change management also reside in IT, along with project management principles. As customer demands for quality certification have increased, IT has kept pace, often bringing Six Sigma practices to the table. At the same time that IT project management capabilities help speed product development, they also ensure accountability through formal status reviews.

Using decision making that integrates strategic planning, product portfolio design and life-cycle management, IT can respond equally well to internal and external business needs. The often overlooked talent that resides in IT is its ability to be critical -- of ideas, assumptions and woolly thinking. IT can help assess the cost and value of new products and services proposed.

Committing to Product Deveopment

To make a more direct contribution, CIOs and their IT organizations can move beyond participating to committing to the delivery of new products or services.

Making the commitment means IT and product engineering must collaborate closely to help ensure on-time delivery of products and services. Product oriented blogs and Wikis can help break down departmental walls by creating special-interest communities. These forums promote discussion and generate ideas that may help accelerate product development.

By committing IT resources to crucial product development projects, CIOs help generate new revenue. Once committed, IT's role will expand with the delivery of more IT services.

Successful IT participants in product development play an ongoing role that requires a timetable and a capacity release plan negotiated with the product development group. There are advantages to this preparation: product development tends to go better because IT is designed into the process rather than bolted on. Projects tend to work better, which builds IT's credibility. Finally, business and IT people form stronger working relationships with each new successful project.

As IT helps bring new or improved products and services to market, it also helps create new sources of top-line revenue growth. In effect, involvement in product development provides IT more leverage and enhances its contribution to the enterprise. With new products typically generating 30 per cent or more of annual revenue, enterprises are continually looking to upgrade their product development capabilities. This presents CIOs with a unique opportunity to redefine IT's role in the product development process.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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