Oracle Supply Chain Management Blog

A Discussion with Oracle's Expert on Innovation Management

April 8, 2014 By: Kerrie Jordan

Gayle HayesA few weeks ago I had the opportunity to sit down with our resident expert on Innovation Management, Gayle Hayes. I picked her brain on what’s going on in the world of product and service innovation and how Oracle is helping. A new phenomenon is sweeping product development – thanks to an explosion of ideation tools and techniques such as crowd-sourcing, big data, mashups, customer immersion labs, etc, finding ideas is not the problem. With so many to choose from, the biggest questions are now “which idea?” and subsequently, “how do you translate the right idea into a profitable product?"

This is precisely the challenge the new Oracle Innovation Management is designed to address. To learn more about the idea glut and how the new solution helps organizations improve return on innovation investments, read the transcript of our discussion below or stream our podcast. You can even find us on iTunes!

Kerrie Jordan: Hello and thanks for tuning in! My name is Kerrie Jordan, and I’m the PLM Product Marketing Director at Oracle and one the hosts of this Podcast series called AppCasts. Our goal is to help you get the most out of your Oracle Applications by listening to thought leaders, customers, partners and Oracle executives along with commentary and opinions from me, your host! So, here we go…

I am very pleased to have with me today Gayle Hayes, Senior Director of PLM Product Strategy at Oracle. Today I'll ask Gayle about Oracle's new solution Oracle Innovation Management and the unique value that it offers business leaders looking to maximize their return on innovation. Gayle, we see companies around the world looking to become more innovative. What sort of implications does this innovation imperative have on businesses and how they operate?

Gayle Hayes: For starters, product Innovation is a top priority for many executives – several research studies show that less than 20% of CEOs currently believe their investments are paying off. Now, combine this with market pressures of shortened product lifecycles, increasing and fairly visible customer sentiment, and global competition… It’s raising the stakes to deliver quality, innovative products to the market.

Do nothing is not a risk that most companies are willing to take as that can result in missed market opportunity, lost market share, etc. Also, innovative ideas can spawn from many different sources like customers, suppliers, partners, field resources. You can even get them from your service, quality, and field operations. Innovations can be disruptive (like the tablet devices) or evolutionary (new features) or they could just be around new packaging, new processes. The challenge is first sorting through all this information to identify the best ideas and then secondly translating each idea to determine if it’s an investment that can meet targeted expectations and fit within the company strategy. Bottom line – there is a lot of pressure to innovate and make the right investment choices.

Jordan: That must cause a lot of frustration for businesses. Could you elaborate on the specific business processes that are broken, and what companies may be doing as a work-around?

Hayes: Yes it definitely does cause frustration and multiple key processes are disconnected which is leading to lower returns on innovation investments. I’ll start at a high level; executives lay out a company strategy – the growth plans, target areas for growth, risk tolerance, etc. – at the lowest level there are teams executing against a plan. In the middle is where there is an issue. This is the intersection where the selection and translation of potential investments are made to achieve the company strategies. One of the challenges is idea selection. This is what goes into the proverbial funnel and the inconsistencies in how they got there. Business cases can be inconsistent and sometimes things end up in the funnel without a vetted justification, consuming precious resources and budgets.

The next challenge is managing the requirements which translate the idea. This is often a disconnected waterfall process where requirements for customers and/or markets are later handed off to design teams to turn into a concept. The requirement document is often in a separate location. Two issues we heard from companies we interviewed were 1) marketing teams don’t know if requirements can’t be met until the back-end of the concept process and 2) requirements are often refined during this process and the history of decisions made are difficult to maintain. This is a critical issue because if requirements can’t be met – that affects the business case and possibly affects the target markets, revenue plans, time to market, etc.

The result is that in the portfolio you end up with a mix of opportunities, some justified, some not, some that should be killed because the requirements can’t be met. The cost of failure gets more expensive at each stage of the innovation process. The goal should be to shut down ideas that don’t live up to the business case and requirements sooner and convert those investment dollars into more promising ideas. Unfortunately many companies don’t have connected innovation processes. Key data is scattered all over a variety of systems making it very difficult to expose potential failures sooner. When that is the case, projects get commercialized and results in what we mentioned earlier – executives not happy with their return on investments.

Jordan: It seems like companies are really struggling with questions such as, first, 'how do you identify which product idea to invest resources in,' and secondly, 'how do you then execute as effectively as possible to maximize your return.' How does Oracle Innovation Management help?

Hayes: Great question. Oracle Innovation Management helps companies identify and translate the best ideas that carry the most profit potential as product offerings. So how can this solution do that? The solution offers a two-fold approach: First, it offers a bottoms-up approach where stakeholders participate in the product invention, definition and translation processes. These are the ideation selection, requirements and concept definition processes. Second, it provides a top-down approach to analyze the financial impact and long-term strategic fit within the innovation portfolio.

This enables a company to establish a more comprehensive, consistent, systematic approach to portfolio decision making that aligns with company objectives for long-term success. The solution also keeps all stakeholders on the same page as to the definition and priority of requirements, whether or not the concept can meet the requirements and stay within supply chain risk objectives, and if the overall business case justification can be met. Then in order to make certain you execute on that investment as effectively as possible, Innovation Management integrates directly to your Agile Product Lifecycle Management (PLM) solutions. This allows a company to track the product through development, ensure quality, control cost, launch the product quickly, and leverage performance analysis to improve the next generation of products.

Jordan: On that note, let’s talk about value. What benefits can companies hope to achieve by using Oracle Innovation Management?

Hayes: With Oracle Innovation Management, companies can increase revenues and product profitability, improve customer satisfaction, and deliver greater return on innovation investments. This is made possible by having a single repository for ideas, requirements, product concepts, proposals/business cases and the portfolio – doing away with disparate systems and scattered data. With Innovation Management, companies can analyze each potential product investment across a 360 degree view of cost, supply risk, resources, ability to meet requirements. Businesses can analyze the business case to determine if it can be met, how well it achieves the company strategy, and whether it fits within budgets or resource constraints. Leaders are able to make more informed and confident decisions about where to place their limited resources for maximized value.

Jordan: Now, for people reading or listening to this conversation, they may be thinking, this isn't the first product in the market claiming to help companies manage their innovation. What makes Oracle's solution different, and why should a company consider this solution over the others?

Hayes: Well, a lot of the solutions that are offered today under the term “innovation” are primarily what are called Social Ideation solutions. There are probably about 50 such tools on the market right now. These are specifically focused on gathering the voice of customers and/or crowd-sourcing. What we found was that many companies didn’t have a shortage of ideas – the key challenge was in making the right choices in where to invest the innovation budget. And if a customer has invested in one of these solutions, Oracle’s Innovation Management offers the web services to bring the idea output to further evaluate, translate and ensure the best ideas are selected in alignment with the targeted portfolio strategies.

So what makes us especially different? Well, there are so many advantages with Oracle’s Innovation Management versus point tools addressing ideas, portfolio requirements, or even PLM, but let me highlight a few of the key ones. First, design teams can directly link specific requirements to the targeted area within the product concept. This provides visibility to the product management teams that their requirements can or can’t be met, greatly improving the evaluation of requirements to concept feasibility.

A second advantage is a solution to what worries a lot of companies – that the end-to-end view of traceability from ideas or problem reports linked to requirements, which are linked to the concept structure. Being tightly tied to PLM provides additional differentiated value. For example, Innovation Management provides the ability to link quality problem reports to ideation, which provides closed-loop corrective action to the next generation or product iteration. Another example is where Innovation Management provides the ability to reuse existing products or parts as the basis for new products, reducing product and supply chain risks by using known, proven materials.

Another advantage is that Innovation Management provides linkage to the PLM projects and reads status back to the business case exposing if the project is running over budget, is late, or even under-resourced. This is powerful. Within the context of the portfolio, adjustments can be made. If it makes sense, you continue the project with an updated business case. This prevents choking the funnel with ideas that can’t or won’t deliver the value.

Bottom line: Oracle Innovation Management is the only solution integrated with a world-class product lifecycle management solution to track the conversion of ideas to projects and then ultimately to profitable products.

Jordan: I see how this Oracle solution offers much more than a hub for ideas but rather that complete linkage to helping companies commercialize profitable products. You must have had many discussions with businesses while developing and now launching this solution. What is some of the feedback you have heard?

Hayes: This solution has been 3 years in the making, so our customers are as delighted as we are! The customers that were part of our validation processes during these past three years are very happy to see this solution released to market. In fact, the reception shown across the various industries, whether it be high tech, industrial, life sciences, telecom, consumer goods, etc. has been exciting as each of these industries sees value from the capabilities we’ve integrated with the complete Innovation Management solution.

Jordan: Well, that is all the time we have. Thank you Gayle for joining me!

Hayes: Thank you for giving me this opportunity to talk about Innovation Management!

Jordan: And thanks to everyone for tuning in. We have many more AppCasts available for you to listen to and will continue to have new AppCasts each week. So if you haven’t had a chance to tune in to other AppCasts, you can download a show from iTunes, subscribe to an RSS feed or go to and listen on your computer.

Until next time, this is Kerrie signing off!

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