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Feasibility studies are critical at the start of any innovation initiative. There need to be both technical and commercial feasibility analyses to determine if a project is worth pursuing and investing resources in - and with what degree of urgency.
In a previous Sopheon blog post, we examined the importance of starting with checklists, but when projects become more complex, problems arise. Among the issues with checklists, two stand out. First, in today’s distributed corporate structures, team checklists that are built in excel or homegrown programs are easily lost or disconnected from the organization’s overall view of resource allocation and contributions to strategic objectives. Second, and most importantly, checklists are often prepared and acted upon before it’s clear that an innovation project is a proper fit for the company. Let’s explore this second aspect.
I believe feasibility studies are critical at the start of any innovation initiative. Only the validation of commercial and technical feasibility will tell you if you are onto something. There need to be both technical and commercial feasibility analyses to determine if a project is worth pursuing and investing resources in - and with what degree of urgency.
“Urgency” is a factor that is often neglected. Sometimes the window of opportunity for a certain idea or product is just a small amount of time, and if that window is missed the whole project may be in jeopardy.
Due diligence and prioritization often require a good deal of internal work. However, this represents just one side of the coin, the internal view. The other side of the coin is the external validation: voice-of-customer (VoC)! Research shows that the voice of the customer is still one of the most reliable sources of feedback and input for the development and refinement of the early concepts of a product.
In an ideal world, all the strategic plans, activities, checklists, scorecards, and VoC results are connected in a single system so that all information is available with the proper “big picture” context. Content without context leads to trouble. Here’s an example – your potential new product is given a good sustainability score. But is it good enough for the company’s future strategic plans to become carbon neutral within five years?
To know that answer, decision-makers need to see how it compares with other products in the pipeline. Perhaps there’s another worthy product candidate with a better sustainability score.
A lack of a good innovation management system that guides an organization through the process of feasibility studies can lead to significant problems.
Here's a real-world example from just a few years ago. Someone at a large chemical company felt it would be a great idea to devise an elaborate system that would use all the available know-how related to their chemical products and create knowledge maps that could be reused and sold. The idea was that any scientist could build on the existing material and the product development process would be improved dramatically. At first glance, it sounded like an excellent idea.
The person was told to move forward. They secured resources and started building a prototype without conducting a feasibility study. They utilized existing resources, such as the organization’s ERP system, to be efficient. Of all the technology in the world, they started with an ERP system. After six months, the initial prototype was announced internally and promoted and the feedback on usability was not encouraging. Nonetheless, they began planning a second release.
Twelve months after initiation, they finally had a clear sense of what it would take to be successful. But by that time, resources for the ERP system were about to be pulled out, and there were still numerous unanswered questions:
An initial feasibility study would have prepared the project team for all those questions. Now, after burning resources for more than 12 months, the only thing to be done was damage control. Various alternatives were evaluated, from finding a software partner to help sell the concept to using more readily accessible technologies.
What happened? Nothing good. After more time and wasted resources, the company realized the idea was not feasible to become a commercial product. All the time and money spent on this endeavor could have been allocated to more worthy projects.
Sadly, we have seen this scenario play out many times over the years. People are working through checklists on projects that never go anywhere. Instead of conducting the proper due diligence early on to determine whether a project is viable, other projects drag on, valuable budgets are wasted, and opportunities are lost.
To provide true value, feasibility studies need to be a fully integrated part of a comprehensive innovation system. This single system should manage all aspects of an organization’s portfolio of projects and products. Having all related content in a single system can be indispensable for the feasibility studies that will enable a company to quickly determine which projects should be killed and which should be prioritized.
These systems should have rules in place that govern the innovation processes. This capability is essential for executives responsible for approving or rejecting programs and projects. Executives need complete visibility and comparability over everything in their portfolios to make fully informed decisions.
The right enterprise innovation management solution can help companies increase NPD profitability, boost innovation performance, and achieve revenue goals. We invite you to read Sopheon’s guide for choosing an innovation management solution. It will help you learn what to look for and which questions to ask before choosing the right solution for your organization.