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Innovation has always been the key driver for the high technology industry, with speed to market being the critical imperative to stay ahead of the competition. To succeed, technology companies have had to effectively manage regular cannibalization of their portfolio by balancing technology innovations for new revisions with innovation for new product categories and markets.
But innovation in the technology industry is shifting. As hardware has become more commoditized, product innovation has shifted toward software that extends hardware capabilities and enables new service offerings. As a result, product lifecycles are shrinking, and software revisions can be launched more quickly.
50% of manufacturing leader Honeywell’s engineers are software engineers, up from less than one-fourth four years ago.4
The growing demand for more products as a service, and the delivery of true customer outcomes, is re-inventing technology product development and delivery. Again, software companies—under pressure to improve quality and customer experiences—are leading the way, moving to a continuous innovation and delivery model by leveraging agile development and cloud delivery. With software now also leading the innovation in hardware products, a similar shift is expanding across an increasing amount of technology products. Smart speakers and other connected devices, such as networking equipment and commercial 3D printers, are great examples of how innovation is being delivered in managing technology via continuous, cloud-based software updates. This shift is radically changing the definition of a product, its lifecycle, and the experience and outcomes for a customer.
“Because manufacturers can continuously monitor products in use, they can update their products, patch problems, and rethink functionality—all of which improves customer satisfaction. The intelligence from smart, connected products can also inform future product features and new product development. We are all familiar with automatic app updates on our phones, giving us access to new features or fixing problems over the air. Smart, connected products can update themselves in the same way. Fitbit, for example, has been able to increase its new product development thanks to the information it has on how customers use the fitness band—and those new offerings can come in the form of either hardware or software options.”
Sreenivasa Chakravarti, Global Head, Manufacturing Innovation and Transformation, Tata Consultancy Services
Now, with fast-changing technology, growing global competition, and ever-increasing customer demands, high technology companies must adapt and innovate quicker or they will eventually perish. They must redefine their products to better support new business models and the delivery of great customer outcomes.