The recent news of a golfing glove utilizing sensors and apps to allow golfers the opportunity to measure the trajectory and speed of their swing, is reflective of the increasing range of smart products on the market. It also serves to illustrate the new challenges being faced by product development teams where rapid technology change and ever more demanding consumers are transforming even traditional product categories.
Forrester has written extensive research on how “digital disruption” will cause upheaval in almost every product in every industry. Forrester’s very own product idea of the Magic Mirror demonstrates how a humble bathroom mirror could be transformed via Internet connectivity, apps, and motion sensors into an interactive connected hub in the homes of consumers.
And this reflects how product development teams are being challenged with ever increasing demands from the business, often requiring new technical skills as the proportion and complexity of technology in products rises dramatically. At the same time though they are struggling with a lack of budget (Forrester estimated a decline of 15% to 30% in product development budgets during the economic downturn), resources, and talent (particularly scarce technical talent).
But why is this important for sourcing and vendor management (SVM) professionals? Because, resulting from these factors, product development teams will be driven to engage to an ever greater extent with third-party providers. And when they do so, sourcing needs to not only be prepared to facilitate and manage these relationships but also proactively reach out to product development. As a result, over the next few years, we expect a key new stakeholder for SVM to emerge.
My recently published report “SVM’s New Stakeholder: Product Development” is the first in a series of reports that looks at some of the key issues which will be faced by SVM in light of the changes outlined above. One of the interesting factors to come out of the research was that while sourcing can use its expertise and experience from IT, product development is ultimately a different kettle of fish. And because product development professionals have different needs and values, they will require an alternative approach.
I’m looking forward to this conversation and interested in hearing your experiences. To what extent are you already working with “non-traditional” (i.e., outside of IT) stakeholders? Do you see product development following marketing’s lead in engaging with sourcing?