PTC EXAMINES PRODUCT DEVELOPMENT PRACTICES11 Jul, 2004
PTC and the Aachen University of Technology released results of two product development studies based on interviews with senior executives in the industrial equipment and automotive industries. Both studies show a correlation between PLM capabilities and product development: "Our study shows companies with high adoption of PLM tools and capabilities complete development projects both on time and on budget more than twice as often as companies with less mature PLM tools and capabilities," said Abraham Chaves, PTC director of industrial equipment market development.
In the industrial equipment industry, successful companies launch more new products and generate more revenue from each new product. Top companies also have greater product variety and tend to invest in smaller, more numerous product development projects than their less successful peers. Companies with the highest gains in profitability have dramatically increased their rate of outsourced R&D, with industry leaders outsourcing nearly 50% more R&D activities than less successful companies.
On the automotive side, most companies share similar business objectives, but the difference between leaders and laggards is ultimately in their product development capabilities--top performers own advanced product development capabilities that enable them to translate strategies into positive financial performance. Top companies tend to invest more in research and development per employee. Companies with highest revenue growth spend 20% more in R&D than their peers, but generate almost seven times more revenue from new products.