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
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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
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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?
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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
Stage 0
First Pass
Possible
Idea
AActive
1 month
CKilled /
redirected
Stage 1
Investigation
1 - 2 months
• 1st pass business case • Build high-level
business case (2-3
• Does it fit with main
page text) plus panel
Purpose?
set (max 10 slides)
• Can we find suitable
technology partners? • Discuss with
technology and
• Do we understand
this market segment? financial partners
• Agree HOA / MOU
• Who will fund this?
between partners
• Good opportunity but
no suitable
Btechnology or
Pending financial partner
• Other activities
putting this on back
burner
• Resource constraints
• Outside main Purpose
• Not interested at this
time
GATE 3
GATE 2
• Further information
needed for business
case
• Technology or
financial partners not
ready to proceed just
yet
• Other resource
constraints
• Business case not
strong enough
• Unable to agree
HOA / MOU
Stage 2
Pilot / Proof of Concept
(Product/Concept/Commercial Development)
2 - 3 months
• Agree main deliverables from pilot e.g. panel sets,
business plans and demonstration system etc. and
set a budget cost for exercise
• Build a team of: Executive Sponsor, Programme
Director, Subject Matter Expert, Project Manager,
Technical Staff (developers, business/technical
analysts)
• Implement a Project Office to manage process
• Hold weekly meetings to review progress against
plans
• Prepare monthly financial reports against budget
• Build demo system including key features of solution
• Determine likely problem areas for full system and
consider which products/partners might overcome
these
• Identify early adopter clients and sign SOPs
• Find industry partners that can provide data feeds /
support the new solution
• Prepare outline marketing material and slide deck (10
max), give internal briefings to interested groups
• Review competitive products (pricing, market share,
features) and determine salient separation messages
• Build a flexible financial model (best/worst cases)
• Build a Lexicon/Glossary of industry terms
• Hold briefings with important industry figures to
discuss / challenge the new solution – use CGE&Y
Account Directors or trade organisations for access
• Prepare final legal documents with partners for new
venture
• Take GO/NO-GO decision with Executive
=> Go to A or C (B not appropriate)
GATE 4
Stage 3
Build
Solution
3 - 9 months
• Run ASE/RSW with all parts of the value chain
• Use output for Inception phase of RUP
• Agree all deliverables from build phase and set
a budgets for whole project
• Develop the solution in conjunction with main
technology partners
• Consider the financial aspects of off-shore
resources
• Prepare documentation on how service will be
supported and implemented (AM/FM)
• If hosting included, agree pricing for service
• Finalise the roll-out plan – starting with early
adopters and then fully. Consider issues
affecting UK, Europe, global roll-out
• Begin building marketing campaign – events,
press releases, brochures, seminars, launch
party. Include internal briefings
• Keep Executive abreast of progress every
month but agree scope changes with them
immediately
• Move early adopter SOPs to legal agreements
• Update the Lexicon/Glossary of industry terms
• Continue briefings with important industry
figures to discuss progress of the project –
promote awareness
• Prepare final legal documents for customers /
suppliers for new venture
• LAUNCH solution
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