Commercialisation of Innovation

Les Green
Director of Technology Innovation
Cap Gemini Ernst & Young
 Define Innovation
• Likely to be completely new product or service
• Could also be a small improvement in existing
products or services
• Might be an improvement in internal processes too
• Today is likely to have a strong technological
component, e.g. software, electronics
• Probably for existing market, but may also create
new / niche
 Importance of Innovation
• Increases opportunity market separation
• Good for the economy as a whole (as companies
trade on a global basis)
• Usually leads to cost reductions – better margins
• Should give consumers greater satisfaction and
wider choice
• Reduces dependency on old products / services
and technological processes.
 What are the stages of Innovation?

• Creative idea, spark of genius!

• Creation of white papers, reports and reviews

• Proof of Concept(s)

• The business plan, financial case and

the MONEY!!!

•The commercialisation process begins in earnest

The four P’s

Commercialisation
 Successful Innovation needs Purpose
• Must give the creator either a “build” and/or “deliver” opportunity
• Should generate revenues within a year (from Stage 0)
• Investment (through Proof of Concept) must within budget
• Revenues for first year should be “known” with set margins
• Revenues/margin projections and the R&D plans for first three
years should be well documented
• Need to take account (amortise) of the the process costs of
Innovation over the life of the product
• Should pre-build features into the product – but not always release
all of these in first version
• Understand the customer segmentation of the target markets from
the outset.
 What about Promotion?
• The need to influence consumer behaviour
• Creating the “MUST HAVE” factor
• Separation from the competition
• Making the Innovation seem worthwhile / valuable
• Built-in adaptive qualities to stay ahead.

EXAMPLE:
SONY Walkman (1979) had features ready for release to fight competition.
Reduced size, Radio (FM), Auto Reverse, Shock Resistance, Water Resistance
Rechargeable batteries, Alarm Clock, Dolby …… and even smaller size!

People didn’t NEED these features, SONY made them “Desirable”.

 And the Process?
GATE 1 GATE 2 GATE 3 GATE 4

Stage 0 Stage 1 Stage 2 Stage 3

First Pass Investigation Pilot / Proof of Concept Build
1 month (Product/Concept/Commercial Development) Solution
1 - 2 months 3 - 9 months
Possible 2 - 3 months
Idea
• 1st pass business case • Build high-level • Agree main deliverables from pilot e.g. panel sets, • Run ASE/RSW with all parts of the value chain
• Does it fit with main business case (2-3 business plans and demonstration system etc. and • Use output for Inception phase of RUP
A- page text) plus panel
Purpose? set a budget cost for exercise • Agree all deliverables from build phase and set
Active • Can we find suitable set (max 10 slides) • Build a team of: Executive Sponsor, Programme a budgets for whole project
technology partners? • Discuss with Director, Subject Matter Expert, Project Manager, • Develop the solution in conjunction with main
• Do we understand technology and Technical Staff (developers, business/technical technology partners
this market segment? financial partners analysts) • Consider the financial aspects of off-shore
• Who will fund this? • Agree HOA / MOU • Implement a Project Office to manage process resources
between partners • Hold weekly meetings to review progress against • Prepare documentation on how service will be
plans supported and implemented (AM/FM)
• Good opportunity but • Further information • Prepare monthly financial reports against budget • If hosting included, agree pricing for service
no suitable needed for business
B- technology or • Build demo system including key features of solution • Finalise the roll-out plan – starting with early
case
• Determine likely problem areas for full system and adopters and then fully. Consider issues
Pending financial partner • Technology or consider which products/partners might overcome affecting UK, Europe, global roll-out
• Other activities financial partners not
putting this on back these • Begin building marketing campaign – events,
ready to proceed just
burner • Identify early adopter clients and sign SOPs press releases, brochures, seminars, launch
yet
• Resource constraints • Find industry partners that can provide data feeds / party. Include internal briefings
• Other resource
support the new solution • Keep Executive abreast of progress every
constraints
• Prepare outline marketing material and slide deck (10 month but agree scope changes with them
max), give internal briefings to interested groups immediately
C- • Outside main Purpose • Business case not • Review competitive products (pricing, market share, • Move early adopter SOPs to legal agreements
• Not interested at this strong enough features) and determine salient separation messages • Update the Lexicon/Glossary of industry terms
Killed /
time • Unable to agree • Build a flexible financial model (best/worst cases) • Continue briefings with important industry
re- figures to discuss progress of the project –
HOA / MOU • Build a Lexicon/Glossary of industry terms
directed • Hold briefings with important industry figures to promote awareness
discuss / challenge the new solution – use CGE&Y • Prepare final legal documents for customers /
Account Directors or trade organisations for access suppliers for new venture
• Prepare final legal documents with partners for new • LAUNCH solution
venture
• Take GO/NO-GO decision with Executive
=> Go to A or C (B not appropriate)
 Keeping the Pipeline fresh
• Measure number of new ideas generated per period (internal
and external)
• Monitor quality of the ideas generated (should get harder to
make decisions)
• Where are the ideas coming from in the organisation and
externally
• Is the Process keeping abreast of the Pipeline?
 Commercialisation of Innovation –
Summary for
• Aim to create a small number of “market making”
opportunities every year (business process)
• Sourcing great new technology to integrate with
Alliance partners (business products)
• Evangelise our credentials!!

Commercialisation

“Working with clients and partners to create

the ‘Must Have’ solutions of tomorrow”
Commercialisation of Innovation

Questions ….

Les Green
Director of Technology Innovation
Cap Gemini Ernst & Young