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GGI RapidNews R&D Product Development eZine: Volume 4, Issue 8, August 5, 2003
In This Issue
2002 METRICS SURVEY RESULTS
BOOK REVIEW - Customer Relationship
Management: A Strategic Imperative in the World of e-Business
MANAGEMENT PRODUCTIVITY - R&D
Spending: Corporate R&D Scorecard
NEW BIENNIAL SURVEY - 2002 RD&E
Survey Results available now
NEW WEB CONTENT - Updated GTKs:
Calendar, CRM/Sales Management, Sales Force Automation,
Data Acquisition & Management
FEATURED iSTORE PRODUCT - 2000
Product Development Metrics Research Summary
CONFERENCES OF INTEREST - PLM;
PDMA; MRT Metrics
WEBINARS OF INTEREST - Sopheon's
Winning Practices for Product Development
TELEVISION EVENTS - Alexander Haig's
World Business Review
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2002 METRICS SURVEY RESULTS
GGI's 2002 Product Development Metrics Survey was recently
published. The 2002 Survey focused on resource
and capacity management practices and metrics. Over
5 months, GGI is sharing with RapidNews readers selected
results from each section of the survey. Last month
focused on the fourth section, "Using Systems, Tools,
& Metrics to Manage Capacity." This month
we present the fifth and final section, "RD&E Metrics
Used in Industry." This month's selected results
are summarized below.
- The most common metrics used by R&D (for example,
% of Sales invested in R&D, # of patents) typically
come from functional groups other than R&D, such as
Finance, Legal and Sales/Marketing. Few metrics are
generated and owned by R&D managers.
- The famous "3M CYS/PDTPRITPNY Metric" (Current
Year Sales/Profits Due To Products Released In The Prior
N Years) was the third most used metric.
- There is a general increase in the percentage of respondents
using various metrics, compared to results in 2000.
The original survey questionnaire can be downloaded at
http://www.goldensegroupinc.com/biennial/surveys/2002MetricsSurvey.pdf. Complete survey results are available for purchase at
http://www.goldensegroupinc.com/cgi/catalog.cgi?display_p355.
GGI's next Product Development Metrics Survey will be
conducted in 2004. Please contact me at ars@goldensegroupinc.com if you wish
to participate. All participants receive a complimentary
copy of the Executive Summary of the Survey results.
BOOK REVIEW
Customer Relationship Management: A Strategic
Imperative in the World of e-Business, edited by Stanley
A. Brown. John Wiley & Sons, Inc. April, 2000,
1st edition. 376 pages.
As companies expand into the world of e-Business, retaining
existing customers and building those relationships becomes
increasingly important and more challenging. Customer
Relationship Management (CRM) is the key strategy to move
a company from a product-focused organization to a customer-focused
one. CRM is not limited to just customer care or simply
the concern of the marketing and IT departments; CRM
involves the company vision and culture, business processes,
and affects all departments -- engineering, manufacturing,
finance, and others. The move toward e-commerce provides
a key opportunity improve customer service and increase
satisfaction, in addition to increasing revenues and decreasing
costs. This is done through a clear strategy and careful
use of technology to manage customer data.
Successful business leaders have known for years that
retaining customers equals profitability. The strategy
for developing customer relationships involves choosing
customers carefully, and focusing on the most loyal and
profitable customers. It's important to avoid constantly
chasing new customers, who are a resource drain. Research
from PricewaterhouseCoopers indicates that a new customer
actually reduces gross margin by 3% in the first year, because
of acquisition costs. By the third year, there is
a 7% enhancement to gross margin, and by the seventh year,
this customer is generating a 14% profit.
The key technology tools for CRM are the Web, workflow
management and data warehousing. The Web enables efficient
customer information gathering. The data collection
must be linked to a workflow management system, so that
documents, information and tasks will be automatically sent
to the right people for follow-up. The data warehouse
gathers, organizes and standardizes all of the information
gathered, and integrates other systems, such as order entry,
purchasing and billing. The customer data warehouse
contains incredibly rich information that can be mined for
a number of analytical and predictive purposes, including
strategic marketing, customization, and new product development
incorporating customers' expressed needs. Technologies
such as these allow companies to maintain and build individual
relationships with their customers, to anticipate their
needs, and thereby to provide profitable revenue growth
for the future.
MANAGEMENT PRODUCTIVITY
R&D Spending: Corporate R&D Scorecard
"The Corporate R&D Scorecard: 2002",
Technology Review, Massachusetts Institute
of Technology: Volume 108, Issue 10, December 2002/January
2003, pages 67-70.
Technology Review published its 2002 Corporate
R&D Scorecard in the December 2002/January 2003 issue,
reporting annual R&D spending of the world's top 150
technology companies for fiscal years ending between June
1, 2001 and May 31, 2002. Companies were assigned
to one of 12 sectors, based on their primary business:
Aerospace, Automotive, Biotech, Chemicals, Computers (Hardware),
Computers (Software), Drugs/Medical, Electrical/Electronics,
High Tech Conglomerates, Petroleum, Semiconductors, and
Telecommunications. Selected results are presented
here.
The overall top spender for R&D was Ford with $7.4
billion, followed by Siemens (in the Electrical/Electronics
sector) at over $6.0 billion and IBM (in the Computers (Hardware)
sector) at nearly $5.3 billion. In general, the automotive
industry spends the highest dollar amount on R&D, with
an average of $2.9 billion for the 14 firms listed, but
this sector is among the lowest three business sectors for
spending as a percent of revenue. The lowest-spending
sector, dollar-wise, was Biotech, which averaged $385 million
for the 10 companies listed.
When the results are examined in terms of R&D spending
as a percent of revenue, Biotech ranked number one.
Millennium Pharmaceuticals spent a whopping 162.7% of its
revenue on R&D, while Incyte Genomics spent 97.3% and
Broadcom (from the Telecommunications sector) spent 91.3%
of revenue on R&D. As a sector, Biotech averaged
46.4% of revenue spent on R&D for the 10 firms listed.
The lowest-spending sector, percentage-wise, was Petroleum
with an average of 1.2% of revenue spent on R&D for
the 5 companies listed.
The Biotech sector again ranked at the top in terms of
R&D spending per employee. The same three companies
from the prior category also surfaced here. Incyte
Genomics spent $364,677 per employee, Broadcom spent $321,822,
and Millennium Pharmaceuticals spent $210,829 per employee
on R&D. In the Biotech sector, the average amount
spent for R&D was $139,548 per employee for the 10 companies
listed. Again, the Petroleum sector spent the least
amount per employee on average, $5,271, for the 5 companies
listed.
The complete scorecard can be found at this link:
http://www.technologyreview.com/articles/rd2002.asp.
NEW BIENNIAL SURVEY
2002 RD&E Survey - Resource & Capacity Management:
Complete results from our 2002 Product Development Metrics
Survey are now available, including our most detailed "RESULTS"
report.
The survey focused this year on the following 5 areas
of resource and capacity management:
- Loading the RD&E capacity pipeline,
- Providing capacity for RD&E activities,
- Balancing cross-functional resources (staffing ratios),
- Using systems, tools, & metrics to manage capacity,
and
- RD&E metrics used in industry.
The 3 versions of the survey results reports that we
offer for sale to the public are
1. 2002 SURVEY HIGHLIGHTS: A text-only report (65 pages),including
the full text of all the results and analysis of the survey
population analyzed as a whole,
2. 2002 SURVEY SUMMARY: A report of composite results,
where the survey respondents are analyzed as a whole (116
pages, including a full set of graphics), and
3. 2002 SURVEY RESULTS: The most detailed report, complete
with the composite results and "special cuts,"
where the survey population is segmented and analyzed in
the following groups: Public vs. Private, Smaller vs. Larger,
Process vs. Repetitive/Discrete vs. Job Shop, Higher Technology
vs. Lower Technology, and More vs. Fewer Employees (223
pages).
These reports are available in the Market Research section
of GGI's iStore (http://www.goldensegroupinc.com/iStore/store.html). The original survey questionnaire as well as a description
of the survey (including survey focus and demographics,
tables of contents for the 3 reports, and examples of key
findings) can be found at the Market Research Reading Room
at http://www.goldensegroupinc.com/readmarket.shtml.
NEW WEB CONTENT
GTK-Gateways To Knowledge: Your resource for industry
and product development related information and contacts
offers thousands of links to providers of technologies and
services for line management functions. The main entrance
to GTK can be found at:
One of our top 3 MEGA Gateways is the Calendar of
Industry Events MEGA Gateway, a listing of links to
conferences, seminars and distance learning opportunities.
We have just updated the calendar to include over 20 new
conference and seminar listings. The Calendar of Industry
Events MEGA Gateway is located at:
Another one of our top MEGA Gateways is the Technology
Providers MEGA Gateway, which is a directory of hundreds
of links organized by technical topic (hardware and software).
The Technology Providers MEGA Gateway can be found at:
CRM/Sales Management: This UPDATED Gateway
offers links to nearly 100 companies that provide customer
relationship and sales management software. Find it
in the Technology Providers MEGA Gateway. The URL
is located at:
Sales Force Automation: This UPDATED Gateway
provides links to over 40 companies that specialize in sales
force automation software. Find it in the Technology
Providers MEGA Gateway. The URL is located at:
Data Acquisition: This UPDATED Gateway offers
links to nearly 50 companies that specialize in data acquisition
hardware and software. Find it in the Technology Providers
MEGA Gateway. The URL is located at:
Data Management: This UPDATED Gateway provides
links to companies that provide data management software.
Find it in the Technology Providers MEGA Gateway.
The URL is located at:
FEATURED GGI iSTORE PRODUCTS
Featured Item: GGI's iStore features one deeply
discounted offering, which changes periodically. The current
Featured Item is the "2000 Product Development Metrics
Research Summary" (MR12).
This 96-page report presents the detailed results of
GGI's 2000 Product Development Metrics Survey, which focused
on metrics systems in use in industry as well as portfolio
management. The report is organized in 5 sections, each
of which contains factual observations, management analysis
and a full set of graphics. This report, which analyzes
the survey population of 122 respondents as a whole, will
provide you with detailed information on
1. R&D linkages to corporate strategy,
2. Portfolio management metrics,
3. Product selection metrics,
4. Product success metrics, and
5. Actual metrics in use in industry.
This research is still valid, given the fact that the
economy has not been in a state of high growth for the past
few years. We have found consistency between the 2000 and
2002 surveys in areas where we could compare.
The price for the report has been dropped from $1920.00
to $1152.00, a deep discount of 40%. For more information
or to purchase this valuable report, go to
CONFERENCES OF INTEREST
PLM 2003: Worldwide Business Research will
hold its product life cycle management event, PLM 2003,
on September 16-17 in Scottsdale, AZ. The conference
is geared toward executives in all functional areas of product
life cycle management and will emphasize minimizing product
cost and maximizing life cycle value. Companies giving presentations
include Deere & Company, Lam Research, Boeing, Lockheed
Martin, Sun Microsystems, Agilent Technologies, Hewlett-Packard,
and Dell. The conference also includes one day of
pre-conference sessions on Monday, September 15, focusing
on benchmarking and performance measures to identify key
performance indicators.
Brad Goldense will be speaking on the subject of "Benchmarking
Resource and Capacity Management Practices in R&D and
Product Development" and is moderating two days of
the 3-day conference.
For more information, go to WBR's web site: http://www.wbresearch.com/PLM/index.html
PDMA International Conference: PDMA's Annual
International Conference will be held October 4-8, 2003
at the Boston Marriot Copley. The conference theme is The
Business of Product Development: People, Process and
Technology Across the Life Cycle and features keynote speakers
Knight Kiplinger and Peter Senge. The conference will focus
on successful product development and product life cycle
management, with an emphasis on how-to's and new techniques
to apply immediately to your competitive advantage.
Three conference tracks are featured: People, Process and
Technology.
Brad Goldense is part of the conference planning team,
is the track chair for the Process Track, and will give
an Executive Presentation on the subject of Industry Best
Practices for Product Life Cycle Management. Other
Executive Presenters include Dr. Robert Cooper.
More information is available at PDMA's web site: http://www.pdma.org/2003/.
MRT 8th Annual Metrics Conference: Management
Roundtable will hold its 8th annual conference, "Product
Development and R&D Metrics: Quantifying Innovation,
Portfolio Value, and Resource Capacity," on November
3-6, 2003 in Chicago, IL. The conference brings together
leading metrics experts and advanced industry practitioners
to explore the latest approaches and methods for using performance
measurement systems to manage new product development activities.
The conference features keynote addresses, case studies,
expert clinics, pre/post-conference workshops, and Q&A
and networking sessions.
Brad Goldense will be facilitating two expert clinic
sessions on Tuesday, November 4 on "Proactive and Predictive
Measurements." Brad will also conduct a post-conference
workshop, "Product Development Metrics Portfolios,"
on Thursday, November 6.
More information is available at MRT's web site: http://www.managementroundtable.com/event_center/MET03/MET03.html
WEBINARS OF INTEREST
Winning Practices for Product Development: This
free, online seminar series is co-sponsored
by Sopheon and the Society of Concurrent Product Development
[SCPD]. These one-hour, online events feature experts
and leading practitioners who will share process knowledge
and practical advice about ways to improve your product
development performance and results.
Sopheon and SCPD are currently in the process of planning
the fall Webinar series. Your input on potential topics
is requested at the link listed below. Past Webinars have
been archived and are available online by following this
link: http://www.sopheon.com/events_onlineseminars.asp
TELEVISION EVENTS
Alexander Haig's World Business Review: Brad Goldense
has made several appearances on Alexander Haig's World Business
Review in the past year. Streaming video is available for
all shows, which aired on August 4, September 29 and December
15, 2002 and on May 20, 2003. See below for details.
May 20, 2003 Broadcast of September 29th In-Studio
with Alexander Haig (22.5 minutes): Streaming video
for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr5
December 15, 2002 In-Studio with Alexander Haig (7.5
minutes) on CNBC paid programming: Streaming video for
this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr3
September 29, 2002 In-Studio with Alexander Haig (22.5
minutes): Streaming video for this segment (as well
as the entire 30-minute show) is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr2
August 4, 2002 On-Location at GGI (3.5 minutes):
This On-Location field report is available in streaming
video on GGI's website. To see the program, go to:
http://www.goldensegroupinc.com/ggiontv.shtml#wbr1
The web page includes links to download a streaming video
player, if you do not currently have one installed on your
computer.
For more information on any of Brad's appearances on
television, go to:
GGI RapidNews is an e-mail publication from Goldense Group, Inc (GGI). Its subject matter includes survey findings, company news, book reviews, key industry conferences and R&D information of interest to clients and associates. Please send communications to rn(at)goldensegroupinc.com. Thank you. | |||