Five keys to unlockcontinuous innovation

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Keeping up with (or ahead of) customers and delivering new, exciting experiences is the fuel for growth—it’s the reason why over the years top innovators outpace the market1. These innovators always seem to find the best ideas customers want, turning them into increased market share. And they realize that innovation doesn’t stop after making and delivering a product. We explored this, and found that most of them don’t use traditional legacy systems. Rather, to drive topline growth and unlock value, these innovators unify data and processes—from idea capture to development, from planning to manufacturing to service—on a single platform for innovation. This makes innovation more efficient so customers are always satisfied and companies thrive, even when disruption hits.

This dynamic is creating an “innovation gap” that continues to grow, as some companies are able to anticipate and deliver what their customers value, while others are falling behind and seeing their profits erode. But even if you’re the most innovative company, finding great ideas, choosing which to invest in, and getting them to market quickly is far from easy.

To keep up with continuous innovation, Cohu, a global equipment and services manufacturer for back-end semiconductors, leveraged the entire suite of Oracle Cloud applications. “In this day and age, you have to have access to data in real time throughout your entire product lifecycle. Products and services are not being built in a vacuum,” said Craig Halterman, Cohu’s CIO. “Oracle Cloud is enabling us to break down the walls of siloed, disparate business processes and scale our business more quickly. It’s an integrated environment, from product development all the way to customer feedback.”

What do we mean by a single platform for innovation? Oracle delivers an integrated suite of enterprise cloud applications designed to support the entire innovation lifecycle—from capturing a high-value idea to developing, planning, manufacturing, and maintaining products and services. It leverages and analyzes data from connected devices, products, factories, and customer feedback to provide the velocity needed for continuous product, service, and business model innovation.

Introduction

Recent studies show that when disruption hits, companies that invest in innovation outperform the market by up to 30%.2 This is why executives’ number one priority is innovation, above all else.3

1 Boston Consulting Group, “Serial Innovators Outperform in Times of Recovery,” June 22, 2020.2 McKinsey & Company, “Innovation in a crisis: Why it is more critical than ever,” June 17, 20203 PWC, US CFO Pulse Survey, June 15, 2020.

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Jeff BlattnerDIRECTOR OF IT, TITAN INTERNATIONAL

We wanted to standardize on a system that could grow with us and ensure our systems are always up to date. Oracle Cloud applications give us access to constant innovation and enable us to benefit from emerging technology to gain an advantage over the market.”

“The reality is that many organizations find it difficult to access the critical data they need to get new ideas to market quickly and optimize them over time. Traditional, on-premises business systems weren’t designed to manage the complexities of launching and scaling global products and services, or to support the speed and number of today’s customer demands. Older systems employ a linear and fairly rigid, siloed approach to innovation that often leaves data hidden in departmental silos that are constrained by legacy tools. This makes it especially hard to find the right data when you need it most to drive innovation.

These older solutions simply leave too many places for projects to fail. They lock up a consolidated view of the product record in systems only used by engineering and development teams. Left unchecked, multiple conflicting and often fragmented sources of information can continue to grow across each departmental silo.

Creating an accessible, single version of truth—a single, unified product record—has been a priority, but also an elusive goal. Organizations have attempted to build additional manual controls and customize their current on-premises systems. But ultimately, this only leads to increasing IT costs and mounting technical debt, without delivering the intended business improvements. Continuous innovation cannot be sustained by this traditional, disconnected approach. It’s ineffective.

A more effective model for innovation requires companies to transform their disconnected or engineering-centric methods into a connected, customer-centric approach. This commitment to customer excellence requires a single source of truth and a well-coordinated contribution from all areas of the enterprise. This is why top-performing organizations are connecting product lifecycle management, supply chain and manufacturing processes, and data—in the cloud. This delivers what some refer to as the “digital thread,” which can help improve collaboration and produce a unified, lifecycle-controlled version of the product record across the business. It’s this connectedness—when integrated with customer user feedback, IoT-enabled product usage analysis, and automated machine learning capabilities—that is essential to unlocking continuous innovation.

Why most traditionalbusiness applicationsfall short

A recent McKinsey & Company survey found that only 6% of CEOs were satisfied with their company’s innovation efforts. One of the top reasons is that “companies too often follow a traditional, siloed approach that creates blindspots, handoff issues, and inefficiencies. All of these scenarios have a significant impact on product revenue, profitability, and ROI.”4

The digital thread can be defined as a collaborative, single data platform, which only next-generation PLM software can deliver. This platform ties together all elements of the enterprise and its data to produce a holistic view of a product’s physical and digital data throughout its lifecycle.”

4 McKinsey & Company, “Modern CPG product development calls for a new kind of product manager,” October 22, 2020. Learn more about PLM and the digital thread

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DevelopTurn your best ideas intovaluable innovations

Your company’s growth depends on how quickly you can spin up the ideas that your customers value. But with so many ideas coming from different sources, it’s easy for the best ideas to go unnoticed—and even worse, for poor ideas to get to market.

Top innovators engage both their workforce and key suppliers directly in the innovation process to foster a culture of creativity by offering easy-to-use cloud applications that are highly visual, mobile, and collaborative—the way tech-savvy innovators prefer to work. By making innovation more structured and collaborative, they establish best practices to help incubate their ideas and align innovation with their strategic goals.

Today’s innovators don’t just rely on crowdsourced ideas to continuously develop what their customers value. They leverage analytics and tightly link feedback from their customers, products, and factories to help promote winning ideas into successful development projects.

For example, with an innovation platform in place, Addiko Bank is able to focus on feeding their innovation pipeline with a balanced and steady stream of high-value ideas that are both achievable and linked to their business strategy. Addiko can now capture and refine ideas for innovations and develop concepts of profitable banking products and services based on their customer’s requirements.

1 What are the five steps to innovation success?

Take a holistic view A connected, collaborative, and data-centric approach enables faster, more profitable product and service innovations.

Structure processesCreating a structured process makes it easier to create a companywide culture of innovation and ensure the best ideas are never wasted.

Provide clear oversightEnsure every process within your innovation structure is carefully managed so you can quickly pivot when required, ensure alignment, and resource optimally.

Use the right toolsWhen all relevant data is gathered and accessible on a single platform, organizations can drive faster innovation and leverage best practices throughout the product innovation and development process.

Make it repeatableDon’t reinvent the wheel. Learn from your successes and failures to make it easier to enforce a best-practice process that’s repeatable and scalable.

Learn more about how the top innovators are outperforming the market.

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“ When we chose Oracle’s cloud-based platform, we got something to help transform our business. Now that we’re on the cloud, everyone’s aligned. The solutions are fully functional and updated quarterly. If you’re worried about where they are today, they’re ready. And they’ll improve tomorrow.” Joe ButtsASSOCIATE DIRECTOR OF ERP AT BISSELL HOMECAREREAD THE COMPLETE STORY

“What is the calculus of innovation? The calculus of innovation is really quite simple: Knowledge drives innovation, innovation drives productivity, productivity drives economic growth.” —William Brody, former President of Johns Hopkins University and the Salk Institute.

Development and supply chain planning organizations have commonly worked off of different systems and in siloed processes. This meant that when development was ready to release a new product to planners, they simply “threw it over the wall” to what quickly became an exercise in assimilating and synchronizing data. Managing innovation this way makes it difficult to achieve the end-to-end visibility needed to drive faster and more frequent innovation. It’s no surprise that in a recent 2020 spotlight survey on resiliency, IDC estimated that companies without a single, collaborative supply chain platform can find themselves spending 10% more on innovation with 42% longer product lead times.

This is why top innovators are leveraging a unified platform for continuous innovation. Now their supply chain planners can accurately align their supply with forecasted demand and optimize their costs to manufacture. When combined with flexible sourcing capabilities, they have a systematic

way to qualify suppliers and keep their trusted sources of supply flowing to support new product and service aspirations.

Whether you’re developing new products or improving current ones, a platform for innovation is designed to let real-time demand data seamlessly flow back and forth to design teams. It turns out that opening up these lines of communication also lets you to respond to customer needs more quickly. Now, planning for new introductions and offerings can happen in tandem with design. And having this symbiotic relationship between teams helps bring your best ideas to market faster while optimizing them and your supply chain.

PlanGet a 360-degree view of data to better anticipate and adapt to market demand2

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What’s the most effective way for companies to ensure that value creation can happen anywhere across their extended ecosystem? By ensuring that R&D is a collaborative process with their supply partners. But increased customer demand for innovative products and the need to source greater portions of materials from suppliers around the globe can present many challenges. These complexities are driving companies to increasingly involve their suppliers throughout the product lifecycle. Top manufacturers recognize that strategic supplier collaboration can help unlock new opportunities, and they’re implementing a single end-to-end solution to standardize how they collaborate, source, qualify, and integrate suppliers into the process.

With a unified solution, procurement organizations can play a strategic role in continuous innovation. A good example of this is Alcar Ruote, a Swiss manufacturer of steel wheels for the automotive aftermarket. Alcar Ruote leverages one system across the supply chain to design, source, and manufacture new wheels in just a few weeks. “We want to be able to have access to consistent and transparent information to be able to innovate products and get them to market as quickly as possible,” says Stefano Mariani, Alcar Ruote’s manager of IT. “With a unified solution, we are able to source the raw materials we need early in the new product development process to reduce lead time and qualify the best supplies that are cost effective, so that we are ready to start manufacturing right away and can offer great prices to our customers. Now, we have tight interaction with product development leveraging a single product record and BOM across the entire supply chain.”

Modern product innovation requires a single platform that allows development and engineering teams at both manufacturer and supplier to collaborate easily on new product designs. By leveraging a single cloud platform that extends the enterprise product record across both internal teams and external suppliers, procurement teams can source more effectively and access accurate and real-time information they need to reuse existing items and reduce waste. This platform also enables companies to properly qualify suppliers and assess their abilities to deliver against requirements such as sustainability, production capacity, and corporate codes of conduct to

SourceQualify and select suppliers to turn collaboration into faster innovation3

assure that design partners can also be effective suppliers as the transition is made from design to production. With modern qualification solutions, companies can rapidly qualify and select new suppliers that can help them turn ideas into successful commercialized products, faster. Now, development and procurement teams have insights into supplier contributions to their designs, material sourcing, and reliability, while keeping costs under control. Proactive supplier management allows companies to become more resilient and innovative to keep customers satisfied and pave the way to competitive advantage.

5 McKinsey & Company, “Taking supplier collaboration to the next level,” July 7, 2020.

According to McKinsey & Company, leaders in supplier development and innovation often find ways to unlock significant new sources of value, beating industry trends by 2X in growth and achieving nearly 5% greater profitability.5

Outperform with supplier collaboration

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In today’s competitive marketplace, making quality products needs to happen faster, better, and in a more customer-focused way than ever before. As product complexity and customer expectations for more personalized products increase and margins diminish, manufacturers must enhance their agility, improve their decision-making, and achieve more with fewer resources. Visibility and collaboration across the innovation cycle and supply chain network is foundational to success. Manufacturers need to leverage capabilities such as Internet of Things (IoT), artificial intelligence, and robotics to tie together customer, product, and factory feedback across the value chain to maximize efficiency.

For this reason, Precision Group, U.A.E., a market leader in the manufacturing of aluminium extrusion dies, tools, press tools, and blow and injection moulds, adopted a modern innovation platform to stay ahead of the competition. “We were running on a legacy system for more than 25 years, which resulted in many process inefficiencies,” says Ameer Ali, manager of IT Applications and Infrastructure at Precision Group, U.A.E.

6 PWC, Manufacturing COO Pulse Survey, 2021.

“To address these challenges and make sure that we are ahead of the competition, it was very critical for us to modernize our systems. With Oracle Cloud, we are able to achieve increased efficiency and end-to-end visibility into the supply chain. This helps us streamline our manufacturing operations and get actionable insights in our factories to drive efficiency, flexibility, and speed.”

With a single platform for innovation, manufacturing organizations can better understand what customers want and then design, produce, and deliver products to market more quickly. This enables the entire value chain to contribute to a superior customer experience and transform manufacturing operations at every level. The result? Exceeding quality standards, minimizing downtime, increasing utilization, and reducing costly scrap and rework. In this way, you can develop and commercialize tailored, quality product more quickly to better meet your customers’ needs.

MakeProduce personalized offerings to meet customer needs quickly and continuously4

According to a recent PWC COO Pulse Survey6, manufacturing leaders are measuring their performances by prioritizing:

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Nearly everything can be offered as a service—from streaming music to heavy equipment to software. What was once a “sell it and forget it” interaction with your customers is now just the start of a long-lasting relationship. Customers benefit from these new business models because now they simply rent, subscribe, and pay as they go. No need to maintain depreciating assets. And if they don’t like the service, it’s easy for them to switch.

The shift to “anything-as-a-service” offers a better way to predict revenue, generate customer loyalty, and provide a steadier flow of aftermarket service work. It’s the reason why a recent MIT survey found that four out of five companies are evaluating these approaches. But, although these models provide new revenue opportunities, they don’t come without their challenges. For example, now, as a service provider, it’s your burden to keep the music streaming, the equipment maintained and running smoothly, and your software forever up to date and secureTo thrive and maximize a return on investment, successful innovators build their services around their customers.

ServePrioritize feedback to continuously maintain, deliver and monetize services5

According to ChainLink Research, the value of a holistic and unified platform can help support an ideal process where:

Design engineers provide input to service analytics.

PLM systems ensure accurate product records are being used.

Supply chain planners receive better forward-looking indicators of demand and are better able to optimize.

Suppliers collaborate early on product design, ensure capacity and compliance with production schedules.

Maintenance and service professionals receive highly accurate information about equipment configurations, status, and reliable remote diagnosis of issues.

Logistics and field service personnel are able to more efficiently allocate resources and make cost-effective plans.

Design engineers receive highly granular data on usage, failure rates, and failure modes, enabling them to improve future designs and shift investments towards continuous innovation.

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(Serve cont.)

FPO

Leading with innovation doesn’t come without challenges. When Broadcom acquired Brocade Communications Systems to diversify beyond its core semiconductor business, it added a whole new category of products—and increased complexity—to its portfolio. This also meant tracking new revenue models, such as the subscription services Brocade offered its customers. To handle new challenges, Broadcom moved to Oracle Cloud.

Watch what happened (2:16):

They use a single cloud-based platform with integrated IoT and AI capabilities to turn real-time data into actionable insights. Top innovators capture and analyze feedback anywhere the voice of the customer, the product, and the factory is and leverage it to prioritize the continuous innovations that keep customers satisfied and from switching vendors. Simultaneously, this approach also equips your field service teams to deliver the right service every time.

Look no further than Oracle. As a multibillion-dollar high-tech manufacturer with a complex supply chain, Oracle experienced all of this firsthand as we evolved from selling software and hardware products to becoming a leading provider of cloud infrastructure and software-as-a-service solutions. You can read how we did it and our lessons learned here.

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Innovation starts with having a customer-centric vision. Bringing that vision to life and unlocking continuous innovation—from an idea to a service—requires a unified platform. This offers the clarity and applications you need to always deliver state-of-the-art, quality offerings that captivate your customers and grow market share.

Turn your best ideas into profitable money-making machines—and keep them running continuously with Oracle Cloud SCM.

Drawing it all together

“ If our product teams are not innovating, the rest of us wouldn’t be here. So, at the end of the day, we have to support that innovation.”Ajmere DaleCHIEF ACCOUNTING OFFICER, SQUARE

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