1. 8 Critical Success Factors(CSF) (Measurement Criteria) in product development life-cycle
1. Product (uniqueness & superiority)-> 7 ingredients in recipe
2. Strong Market Orientation
3. More Spending Pre-development work - “Up front Homework”
4. Sharp & Early Product Definition (Voice of Customer)
5. Appropriate Organisational Structure (X Functional Teams)
6. Sharper Project Selections Decisions ( Hi Focus )
7. Speed => competitive advantage (Reduce cycle time)
8. Hi Q, Disciplined & Systematic New Product Process.

2. CSF#1 Product Superiority (7 Ingredients)
1. Meets customer needs better than competitors
2. Is better quality than competitor’s ( from customer view )
3. Has Unique benefits/feature for the customer (Differentiated)
4. Solves customers problems
5. Reduces customers costs ( better value in use )
6. Has highly visible benefits
7. Is innovative or novel
Concept Tests
Rapid Prototype
competitive analysis
needs & wants study
Customer Trials & Test Market

3. CSF#6 Predictable New Product Success !
Sharper Project Selection Decisions : SCORECARD to yield better focus.
Classic Problem : Too Many Projects and Too few resources
Why ? A Failure to Focus
We need “Funnels” not “Tunnels”
Idea Pre-study Feasibility Develop Launch

4. CSF#6 Focus on Successful Projects
Use Score Card Technique with round table assessment & agreement ( e.g. business, r&d, market, finance )
Apply a standard criteria at all decision gates using scorecard
Include more quantifiable financial criteria e.g. forecasted sales, ROI, payback period, NPV, IRR, DCF as a judgement criteria.
Assess Risk e.g. probabilities of technical, commercial success

5. Scoring & Ranking CSF#6 Example Scoring Template
Ranking of Projects on Financials & Non Financial Indicators

6. CSF#6 R&D Portfolio for Ericsson A Personal View of How we can view our products !
DATA
Where we want to be
New Telecoms World
More products & combined solutions
for mobility, voice and data communication
Where we are, maybe !
MOBILITY
TELECOM / VOICE

7. #1. Mobile Prepaid Systems for New Entrants
Ericsson Ireland : 5 Different Product Units Selected in this experiment...
#1. Mobile Prepaid Systems for New Entrants
Switching Software
Middleware & Database
1 Product Line in sample…
customers in Ireland, UAE,Macau, Iceland, Slovenia, South Africa, Uganda…..

8. Ericsson Ireland : 5 Different Product Units
#2 Radio Network Manager
AIRscope-I Product Features
Designed as an innovative speech quality analysis and diagnosis solution for digital cellular operators
reduce churn...
2 Product variants in sample

9. Ericsson Ireland : 5 Different Product Units
#3 Data, IP, Ecommerce Market Unit
5 market solutions for Irish Market in the sample
Internet Access, Wireless E-commerce, WAP Server, Ipulse & Weboair..

10. Ericsson Ireland : 5 Different Product Units
#4 Business Communications
VPN ( Virtual Private Networks ) for fixed and mobile networks..
Private networking, Short dialing, cost savings to corporation
4 products in sample
two from fixed operators, two from mobile

11. Ericsson Ireland : 5 Different Product Units
#5 Competence Services
Customer Training Products for Ericsson customers
3 Products in the sample
instructor led and web based training
GSM, AXE, ATM, IP…….

12. CSF#8 Overlay onto Existing Stage Gates (Go/Kill) Decision Points
R&D + Marketing + Finance participants at each decision meeting
Senior Management buy-in
“non subjective criteria” SCORING MODEL at Toll Gates
Financial => Estimate Commercial Value of Projects
ECV = { [ (NPV x Pcs x SI) - C ] x Pts} - D
Non financial ( 5 dimensions )
1. Probability of Technical Success
2. Probability of Commercial Success (product c.a & market attractive?)
3. Reward (NPV,return,payback time,certainty,cost+TTM)
4. Business Strategy Fit
5. Leverage of company’s resources & skills

13. Work in Progress

14. The Project Plan of Action
BEFORE
The Project Plan of Action
Find Candidate Business Units at Ericsson
Assess current practice ( CSF ) ( 5 Business Units )
Introduce Scoring Template and Educate
Design & Customise to the SBU’s needs.
Perform / Overlay “Hoechst” Scoring Meetings on to existing Stage Gate System on a monthly basis over 3-4 months
Record and Map Product Attractiveness Portfolio
Complete the Experiment
Assess Performance Improvements, e.g. better decision making tool found ? Satisfaction level ? Trigger’s change project priority
Report...
AFTER