ALIGNING  TECHNOLOGY  DEVELOPMENT
WITH  CUSTOMER  NEEDS

by Kenneth Crow
DRM Associates

© 2001 DRM Associates   All rights reserved. May be printed for reading, reference & distribution with attribution. Other use prohibited.

Technology development and applied research are often performed on a separate track from product development to avoid significant risks and time until a technology is ready to be deployed for development. Technology development encompasses pure research, applied research, and the development of technology so that it can be applied in a product with acceptable risk in an acceptable period of time. It also encompasses investigation of technology developed by other organizations and characterization of this technology to the point that it is understood well enough that a decision can be made on whether to use it in the development of a new product.

A lot of attention is focused on planning and managing product development. Not as much attention on managing R&D or technology development. The Aberdeen Group Boston estimates that "85% of invention in corporate inventions whither on the vine." Our experience is that it is in excess of 50%.

Quality function deployment (QFD) is a powerful tool to plan products, define their requirements or technical characteristics and plan subsequent details to achieve the product. We have also used QFD to plan technology development and help with R&D management. QFD provides a mechanism to assure that appropriate technology is investigated that can support customer needs for new products.

In traditional quality function deployment, customer needs are determined for a proposed product. With technology development, the collective knowledge of customer needs is assembled for a product line. If the company has multiple product lines, this planning is done for each product line.

These customer needs are organized into a technology development planning matrix. The technology development planning matrix (example shown below) is used to identify which technology development projects to undertake based on customer needs. The technology development projects are evaluated and prioritized and then scheduled to balance with available resources using this matrix. An larger image of this matrix is available.

The steps involved in this planning process are as follows:

1. Determine customer needs by product family primarily focusing on the end user needs and secondarily on the OEM's, retailer's and service provider's needs. These customer needs are generalized needs that would apply across the product family.
2. Use the Data Dictionary to create a brief statement of the need. Develop a definition of this statement of need.
3. Establish priorities for each customer need on a 1 to 5 point.
4. Develop competitive evaluation of the company's current products and competitive products. This evaluation is done from the perspective of what we believe our customers would say about our strengths and weaknesses. Rate the company's and the competitor's products on a 1 to 5 scale.
5. Review the competitive evaluation strengths and weaknesses relative to the customer priorities. Determine the improvement goals and the general strategy for responding to each customer need. The improvement goals represent a realistic plan for where to focus improvement on the various customer needs considering the current competitive evaluation. Identify the marketing objectives.
6. The process of setting improvement goals and marketing objectives implicitly develops a part of a product development strategy. Formally describe that strategy in a narrative form. What is to be emphasized with new products in the future? What are their competitive strengths? What will distinguish it in the marketplace? How will our products be positioned relative to other products? In other words, describe the value proposition behind our products. The key is to focus development resources on those areas that will provide the greatest value to the customer. This strategy brief is typically one page and is used to gain initial focus within the team as well as communicate and gain concurrence from management.
7. Identify potential technology development projects associated with this product family and list across the top of the matrix and in a technology development dictionary. Develop a definition of this technology product including how it might help address customer needs. In another column, describe the potential scope of the technology development project.
8. Develop relationships between customer needs and the technology development projects. These relationships state how the technology development projects will satisfy or affect the customer needs both positively or negatively. Use a -5 to +5 scale to indicate these positive and negative relationships.
9. Some technology development projects may be directed to providing n ew capabilities that are not yet recognized by the customer. Consider whether it might be appropriate to add new customer needs to address these new capabilities.
10. Perform an evaluation of the technology development projects.
11. For each potential technology development project, separately identify the resource requirements if 1) the technology were to fully developed in-house or 2) the technology was acquired and brought in-house. This second resource estimate should reflect the internal effort to coordinate the development or acquisition of the technology and to fully understand the technology and be prepared to deploy that technology for future products.
12. In another row, determine a technical difficulty rating on a 1 to 5 point scale. Consider technology maturity, the company's understanding of the technology, personnel technical qualifications, technical risk, prototype and testing capability, supplier technical capability, and schedule.
13. Review the importance rating. If there are multiple product lines to be planned and technology has applicability across multiple product lines, consolidate the technology projects data and importance ratings into a summary matrix. These ratings can also be weighted by the sales or profit contribution of the product line to the company overall.
14. One preliminary screening method is to calculate the importance rating points per unit of development effort, e.g., points per man-month.
15. Use all of this data to begin screening and prioritizing the d evelopment projects. Start by screening out or identifying the lower priority projects. Note that some projects may be critical precursor steps for other projects or may be necessary even though they have a low importance rating.
16. Next identify the high priority projects. Keep track of similar projects with similar objectives to avoid unnecessary redundancy with the technology projects. Finally, prioritize the remaining projects. Rate project priorities on a 1 to 5 point scale.
17. Schedule and track project resource requirements. Adjust priorities and schedules to balance with available resources. Determine which technologies may be more appropriate to buy or contract outside the company for development.
18. Review that the higher priority projects are aligned with the strategy and goals developed during the competitive evaluation. Make any adjustments to better align selection and prioritization of technology development projects.
19. Identify the responsibility for each development project.

The result of this process is the prioritized selection of technology development projects that are aligned to customer needs. However, it is important to recognize that there are also technologies that should be developed that apply to future products/product lines not currently provided by the company. These need to be separately addressed.

ABOUT THE AUTHOR

KENNETH A. CROW is President of DRM Associates. His firm focuses on improving product development and the implementation of strategies and practices such as integrated product development, time-to-market, and business process re-engineering for the high technology, capital equipment, medical equipment, transportation equipment, aerospace and defense industries. He is a recognized expert in the field of integrated product development and quality function deployment with over twenty years of experience organizing and guiding product development improvement programs and assisting product development teams. He led a consortium to identify 250 best practices or product development and developed a benchmarking and assessment methodology based on these best practices.

He has worked internationally with many Fortune 500 companies. He has written articles and papers, contributed to books, presented at conferences, and conducted workshops in Australia, North America, Europe and Asia on product development, manufacturing, and quality function deployment. He is a certified New Product Development Professional (NPDP). He is a founding member and past President of the Society of Concurrent Engineering and is a member of the Product Development Management Association and the Engineering Management Society. For further information, contact Ken at DRM Associates, 2613 Via Olivera, Palos Verdes, CA 90274; by phone at (310) 377-5569; by fax at (310) 377-1315 or by email at kcrow@aol.com.

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