ACKNOWLEDGEMENT

The successful completion of any task would be incomplete without mentioning the people who have made it possible. So it`s with the gratitude that I acknowledge the help, which crowned my efforts with success. Life is a process of accumulating and discharging debts, not all of those can be measured. We cannot hope to discharge them with simple words of thanks but we can certainly acknowledge them. I owe my gratitude to miss. Savita Panwar for his constant guidance and support. I would also like to thank the various department officials and staff who not only provided me with required opportunity but also extended their valuable time and I have no words to express my gratefulness to them.

Abhinav Raghav Dadhich M.B.A. Pt. I

PREFACE

Product innovation is the creation and subsequent introduction of a good or service that is either new, or improved on previous goods or services of its kind. This is broader than the normally accepted definition of innovation to include invention of new products which, in this context, are still considered innovative. New product development describes the complete process of bringing a new product or service to market. There are two parallel paths involved in the process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. This includes but is not limited to improvements in functional characteristics, technical abilities, or ease of use. This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use.

CONTENTS

Acknowledgement Preface Contents 1 3 5 11 12 19

Product Innovation Innovation Strategy Product Innovatin examples Why Product Innovation Product Innvation Process Process Innovation

Conclusion Bibliography

PRODUCT INNOVATION
Product innovation is defined as: the development of new products, changes in design of established products, or use of new materials or components in the manufacture of established product. Thus product innovation can be divided into two categories of innovation: development of new products, and improvement of existing products. Product innovation is the creation and subsequent introduction of a good or service that is either new, or improved on previous goods or services of its kind. This is broader than the normally accepted definition of innovation to include invention of new products which, in this context, are still considered innovative. New product development New product development describes the complete process of bringing a new product or service to market. There are two parallel paths involved in the process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Improvement of existing products This includes but is not limited to improvements in functional characteristics, technical abilities, or ease of use. This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use. An integrated approach to new product development Product Innovation Ltd is an established New Product Development consultancy specialising in inventing and developing new products for manufacturing companies. The company has been in business for more than 25 years and in that time has been involved in a wide range of new products many of which have worldwide patents. Product Innovation is an inventing new products that will fit a clients existing marketing and manufacturing strengths. In addition the Company has Consulted

Itself and produced several products of its own. A selection of these and other nonconfidential products are shown in the Products section. New product development that is creative, cost effective and practical When setting out to deliver new breakthrough product offerings to your market, I have found that a key first step is to construct a picture of your current business, market and offer. By taking stock of your current situation in a multidimensional way you can set an innovation context to help you target future opportunities in a more effective way. When I work with my clients to create market breakthrough products, because Im often new to their business and I need to get up to speed quickly, I run through a discussion guide covering all aspects of the innovation space available to their business in future.

Product innovation at a glance

Product innovation means different things to different people. Some, for example, tend to think in terms of a product which is first of its kind, whether in the UK or in some larger market. Naturally, few small firms achieve innovation of that degree. And such radical innovation is not necessarily more important than the steady, incremental improvements to existing ranges of products, which far more firms take part in. Indeed, since about 1970 there seems to have been a steady swing towards product improvement rather than totally new products, throughout the industrial world1. We felt there was good reason, therefore, to adopt a broad rather than a narrow view of product innovation. As we stated briefly in the Introduction, we defined it as development of new products, changes in design of established products, or use of new materials or components in manufacture of established products. In other words, anything which is new to the business and its product range is counted as innovation, even if similar products are available elsewhere or if the change is an incremental one.

Innovation Strategy
The 3 Pillars of Innovative Business/ Marketing Strategies Innovation strategy in any business or industry involves aligning the product life cycles of the company with their various research and development activities. This article takes a look at the three pillars of innovation strategies that are fundamental to making sure that innovation, research and development and new product development are all working in harmony. 1. Research and development ideation The first pillar of innovation strategy involves the nurturing of idea creation within the company. This is often within a research and development department as a means to centralize the creation of new ideas for products/services. Note: An innovation strategy can be used for both physical products or services. This article, and website, makes no distinction between whether it is a physical item or service, except where explicitly stated. However, new ideas can (and should) come from all departments and should feed back into the research and development group whether directly or indirectly using whatever type of idea tracking software or content management/knowledge management systems the company uses. Many business management degree courses fail to point out this fact that inter-department communication is key to ideation. Business growth strategies can also inform idea creation by focusing staff upon certain areas of particular interest. For example, a business growth strategy for a software development house could involve outsourcing some elements of their products development. As a result, new ideas could be created to look into ways of architecting new software solutions that incorporate the ability to outsource developing sub-components of the application (i.e. coding by contract). See our post on innovative business card designs to see how innovation can be applied to even the most basic products.

2.

Life cycles and product innovation strategy The second pillar for innovation strategies is to align your companies focus on

innovation to match up with the companies product life cycles. Product life cycles can vary from company to company and industry to industry. Some more traditional companies/industries (e.g. mining) have long life cycles where the products architecture design is reused for several years, and perhaps even decades. As a result, innovative new ideas can only be incrementally added as a way to gradually improve products/services. By contrast, companies with short life cycles (e.g. software development) are constantly upgrading products and looking for new ways to outdo competitors. With a shorter life cycle, the research and development group can incorporate cutting edge technologies at a much faster rate into their lines of products and come up with entirely new architectures and product platforms on a monthly basis. For example, the Google marketing strategy can incorporate quick turnaround times and the concept of the eternal beta in order to be constantly innovate their product line. 3. Information/idea transference and customer feedback The third and final pillar of innovation strategy requires that there should be a constant stream of information and ideas between the research and development element of the company and the actual product creation departments. To add to this, there should additionally be an information channel from customers (i.e. customer feedback) which feeds back into improvements and ideation. This constant cycle of information and idea transfers should be included as part of business growth strategies to assess what type of innovative marketing strategies can be used to target customer needs. There is no point coming up with a groundbreaking product innovation strategy that is not at least partly based upon some form of market research or customer feedback which show that there is a genuine need for these features. Likewise, innovative marketing strategies that are solely looking at what existing customer needs are will often miss out on considering new technologies that

are entering the market place (use online marketing tools and keyword research to assess current trends). These new technologies can then be used to target customers with groundbreaking new products that fulfill customer needs which were previously not identified. For a company to have effective innovation strategies which work correctly within their business, they really need to establish these three pillars of innovation in order for the new ideas to make the best use of new technology while still being informed by business growth strategies and market research.

Product innovation examples

Innovative Product Lunch Boxes with Built-In Ice I was recently shopping for new lunch boxes for my kids to carry their lunch to school. If you have not shopped for lunch boxes/bags lately, you may be surprised at the number of options. Hard-sided lunch boxes made of metal or hard plastic. Soft-sided bags of varying shapes and sizes. And, of course, a huge variety of colors, designs and cartoon characters. With previous lunch boxes, we have included a re-usable ice pack to keep the contents of the lunch box cold. This approach works pretty well, but sometimes the ice pack crushes the food or the ice pack begins to leak blue liquid all over the contents of the lunch box. As I reviewed the vast selection of lunch boxes at a local store, I noticed a new type of soft-sided lunch bag that had built-in ice. The advertising materials for the lunch bag said No Ice Needed! Its Built-In!. This innovative design includes a freezable gel in the sides of the lunch bag. So, instead of putting an ice pack into the lunch bag to keep the contents cool, you put the entire lunch bag in the freezer overnight to chill the gel in the sides of the bag. In the morning, you take the lunch bag out of the freezer and put the lunch inside. The frozen gel keeps the contents of the lunch bag cool until lunch time. I love this idea. The lunch bag does a wonderful job of keeping the contents cool until lunch time. I believe it does a better job than the old ice packs we used in

the past. Now I dont have to worry about leaking ice packs or a shifting ice pack that slides to one end of the lunch bag and only keeps part of the lunch cool. This creative product is an innovation example that combines two existing products to generate a new product providing new benefits to the customer. This innovation adds a new feature that simplifies use of the product, rather than making it more complicated. When looking for ways to provide more value to your own clients, dont forget to consider simplifying your product or service for the benefit of your client. Innovative Product Design Shoes Shoe manufacturer Adidas has developed an innovative soccer shoe that weighs only 5.8 ounces. The manufacturer says these are the lightest soccer shoes on the market the average soccer shoe weighs about 10 ounces. Adidas applied several innovations in developing this new shoe including a new approach to manufacturing the sole of the shoe as well as a new material used in the upper portion of the shoe. To see all the details about this new soccer shoe, New Innovation for Kids with Diabetes Many innovations solve problems or simply make life easier. Heres a wonderful example of using innovation to solve a current problem. Problem: Kids with Diabetes need to monitor their blood sugar level throughout the day. This involves an uncomfortable finger prick each time their blood sugar level is tested. Kids may attempt to avoid this daily testing, which may jeopardize their health.
Solution: Combine the blood sugar testing procedure with something kids enjoy

Small Business Innovation Ive met many business leaders and entrepreneurs that dont understand how to leverage innovation in small businesses. These individuals often believe that business innovation is for large companies that employ scientists and have a large research and development department. However, many small businesses can enjoy significant benefits from a well-designed innovation strategy.

In some cases, small businesses can do a better job at identifying and implementing innovations than a larger company. These smaller companies can often act quickly to take advantage of creative ideas and get those ideas into the market by incorporating them into the companys product or service. This quick action gives the smaller company a competitive edge when they are Managing Innovation to Create a Competitive Advantage Innovations can expand a companys existing product line or add new services related to those existing products. For example, a company may find a new use for their products that lets them expand into a new market, which attracts a new group of customers. Selling products in multiple markets increases overall sales and reduces the impact on the bottom line if theres a slow-down in one market. Other business innovations may add new features to existing products. One way to identify new features that may boost sales is to review customer feedback, market research and problems identified by market commentators. If your existing customers are requesting a particular feature, there are likely. Fabrication and Assembly Company (FAC) is an example of diversified, opportunistic development of new products. After being set up in 1972 it initially made bridge parapet anchorages, but found that this was too narrow a base on which to build a business. It subsequently tried knitting machine components and alternator casings, but these also were unstable markets. Better results were obtained with heat exchangers for the steel industry; and in 1978 water table cutting beds for oxy-fuel or plasma-arc cutting were introduced, with considerable subsequent development. In 1987, FAC was introducing a new machine to remove slag deposits from flame-cut steel, and was assessing the possibility of making a computerized handling system for heavy steel plates, under licence from Finland. Farm Machinery Manufacturer (FMM) built up a successful business on the basis of one highly innovative idea. This was a cattle feeding system in which a transponder attached to the animal activated an electronically controlled feed dispenser. This led to a series of developments with increasingly sophisticated options. After this narrow specialization led to serious market setbacks in 1983, the company began to diversify, and developed a successful sow feeding system. It also

began to apply its expertise to non-agricultural problems, for example the design of light-controlled pedestrian crossings for disabled people. Specialized Knitting Machines (SKM) was based on a single technology (knitting) but was applying this to new or specialised problems. It established itself by buying the manufacturing and distribution rights of a range of machines from an American company. Subsequently it has developed a computer controlled jersey knitting machine, which greatly increased the range of patterns and styles which could be produced. It also developed a machine for knitting fibres of meat compound into a continuous material, which required knitting concepts new to the industry. Incinerator Company (IC) is an example of both planned and opportunistic innovation. It began as a supplier and sub-contractor of fabricated components. Over a period it investigated the possibility of entering the market for advanced incinerators. However it was only when a customer firm, which was installing an incinerator, asked it to take over the contract with which it was having technical difficulties, that it was able to carry out its plan. The company subsequently introduced a new type of incinerator offering more complete combustion and reduced smoke emission. This had become the main source of the companys growth and had permitted it to enter export markets.

BASIC DATA FOR PRODUCT INNOVATION REQUIRED :

How to develop an innovation strategy. Best practices in new product development that separate the best firms from the rest in different industries. Results from a first-of-the-kind benchmarking study for marketing research practices to build voice of the customer. How to develop a new product development process that incorporates the best practices and is based on cutting-edge frameworks and approaches. How to adapt the new product development process for: Different types of projects: lower risk short-term versus breakthrough projects, in-house versus out sourced projects, platform projects.

 Different strategic decision situations: speed to market versus extensive development, proactive versus reactive strategies. Building flexibility into the process. How to implement the new product development process. How to create new market space by identifying a new value curve that better meets customer needs. How to identify new product opportunities using both resource-based and market-based approaches. How to uncover breakthrough consumer needs and develop and test new product concepts that serve those needs. How to apply leading-edge voice of the customer techniques. How to create a value proposition for your new product and develop a positioning strategy.
.How to use latest tools and techniques that will help you to design new

product offerings that deliver customer value through differentiating benefits. How to use tools such as conjoint analysis for new product design, sales forecasting and pricing, and perceptual mapping for identifying unique valuepropositions and developing positioning strategy. How to develop sales forecasts for your new products and services. How to develop a launch plan.

How much product innovation?

The senior executives responding to the survey were told our definition and asked to look back over the preceding two years (a period finishing in late 1985). They were asked, first of all, whether they had brought in any change in products within this period. We found that some product innovation, in our broad sense, had been carried through in this period by 57 per cent of our whole UK 14 sample. In other words, out of every 10 small firms, six were likely to be (to some degree) innovators, while four were likely to be non-innovators. However, as noted in the Introduction, we must be careful not to generalize from this figure, which could be

substantially affected by non-response to the survey. This is because firms not involved in product development and innovation might be less likely tofind the survey interesting than would firms which were innovators. The result would therefore tend to overstate the proportion of firms which were innovators. We are on firmer ground when we turn to comparisons of various groups within the survey. We designed the survey in the expectation of finding higher levels of innovation in the East Midlands than the North-East. If non-response acts selectively to reduce the proportion of non-innovators in the sample, then the expected difference between the two regions would be weakened. If a difference persists despite his, it can be regarded as reliable. In fact, we found that 60 per cent in the East Midlands, as against 54 per cent in the North, had brought innew products. This difference is in the expected direction, but it is not striking, and on that basis alone it would be unsafe to claim any distinct advantage for the East Midlands. Because our definition of innovation was a broad one, a firm could be counted as innovative even if it had made only a marginal product improvement. But we checked this in other ways. The firms were asked a more detailed question, to classify the innovations by type. They indicated whether their innovation was (i) a modified version of an existing product range (ii) a new model in the existing product range (iii) a new product outside the existing range but in a similar field of technology (iv) a totally new product in a new field of technology. Evidently, as one moves up the scale from (i) to (iv), the degree of innovative effort and risk-taking on the part of the firm is likely to increase significantly. This is not to say that developing totally new products is better than incremental improvement; that would depend Product innovation on the business circumstances of a particular firm. But it does represent a greater degree of commitment. Quite large proportions of those firms reporting innovation had, in fact, brought in new products of types (iii) or (iv) where the innovative effort was higher.

WHY PRODUCT INNOVATION

Why some firms had no new products

On average, it seems, the innovators do better financially than the noninnovators. Is a lack of new products, then, an indication either of lack of enterprise or of financial weakness which shackles development? Not necessarily. Those without any new products during 1983-85 were directly asked to state the main reasons for this lack. The reason most frequently given was making to the customers order, and another frequently given explanation was that customer industries demanded standard products. In other words, so far as these small firms were concerned, their market was not one which required new or modified products. A lack of innovation arose from giving the customers what they wanted. However, other non-innovating firms (a much smaller number)stated that they had been unable to find suitable new products, with a proven or reliable level of demand. In these cases, some search for new products was implied, but it had failed. Alternatively, one can interpret these cases in terms of an unwillingness to bear risk.nly one firm out of 42 non-innovators stated that inability to obtain development capital was the

reason for lack of new products. The reasons given, therefore, point to customer markets and customer relationships as the key to product innovation or noninnovation, rather than access to finance

Product innovation process

How can you structure the Product Innovation Process?
In a modern industrial company the design of a new product is not an isolated activity. Product design is embedded in a larger process, which is called product development. Product development includes the development of a new product together with the plans for its production, distribution and sales. This larger process is also called new business development. Product development in turn is part of the product innovation process. Product innovation encompasses all activities that precede the adoption of a new product in a market. Thus, innovation comprises the development as well as the realisation of a new product or production process by a company. Which part does product design play in the product innovation process, and how can we systematically approach this process? In this chapter we shall outline two models of the product innovation process that provide answers to these questions.

Product Innovation according to Roozenburg and Eekels

Figure : The structure of the innovation process (Roozenburg and Eekels, 1995)

A company that wants to innovate must know very well what it wants to achieve. It must produce fruitful ideas for innovation, work them out skilfully into comprehensive plans for action and then realise those plans tenaciously yet flexible. Figure 1 shows a very simple model of this process; in figure 2 this model is worked out in more detail. Product Planning The first part of the innovation process is called product planning. In this phase it is decided what product(s) will be developed and when. Product planning has two parts: policy formulation and idea finding. What a company wants to achieve is shown by its policy. Proclamation of goals only is not enough for a proper policy formulation. What are the strategies for fulfilling the goals? That is the complimentary part of the policy. In product development the product-market strategy (or product-market scope) lays down the kinds of products the company is going to apply itself to, now and in the future, and the markets it is going to attend. A proper crystallised policy is the basis for the next activity: idea finding. Before a product can be developed, someone has to come with the idea for it. In a new product idea two elements come together: a technical possibility and a market need. The discussion whether the development should be market-pull or technology-push is in this context less important; both elements are needed. How does a company find new product ideas? Simply put, this comes to: Keeping informed about markets and consumer needs (external research, opportunities and threats). Investigating the strengths and weaknesses of the company (internal investigation). Getting inspired by those studies and generating new product ideas. Selecting the most promising product ideas and formulating them into an assignment for further development.

When searching for new product ideas it is wise not to search at random, but first to demarcate the areas in which you want to be active. These areas are called search fields. A search field is a strategic idea of future activities of a company, which is based on knowledge of external opportunities and awareness of internal capabilities (strengths). Idea finding has much in common with exploration. Its success depends on the activity itself, but also strongly on luck and chance. The product policy directs the idea-finding process and provides normative information for

making choices in that process.

Strict development Promising ideas for new products must be worked out into detailed plans for the product, the production and the sale. This phase is here called strict development. The plans are developed with the new business idea, as point of departure and it is very important that the plans are properly attuned to one another. To that end the product development process must be arranged concentrically.

Concentric development means that at first all plans are worked out in outline, to be able to estimate the technical and commercial feasibility of the new business activity as a whole. Whenever a product idea survives the first round, the plans are further worked out in a second round, etc., until they are completed and fit one to another (see figure 3). Of course the number of rounds is arbitrary. Essential is that in each round all aspects of the new business activity (function, appearance, use, manufacturing, cost, environment, etc) are taken into consideration. Other names for

this fundamental methodological principle are integrated product development, simultaneous engineering and concurrent engineering. By concentric development two important things are achieved. Concentric development prevents that more time and money is spent in the development of eventual non-successful product ideas than necessary. Besides that, as concentric development stimulates the interaction between product design, production development and marketing planning, it raises the quality of the product and shortens the lead times. Realisation In this phase the detailed plans out of the strict development phase are transformed into reality. This phase includes production, distribution, sales and the actual use of the product. The model of the product innovation process in figure 2 shows how product design is embedded within the larger industrial innovation process. Product design is preceded by product planning activities that define the kind of products to design and it proceeds in interaction with production development and marketing planning. The development of a new product will be successful in so far as these activities are properly attuned. Product Innovation Process according to Buijs

Figure : Four stages Product Innovation Model

J. Buijs (see figure) introduced a four-stage innovation model based on the assumption that the product innovation process is similar to an (experiential) learning process (Buijs, 2003). Coming up with new products and services is the response of a company to its changing competitive environment. The four-stage product innovation model consists of: Strategy formulation (i.e. policy and strategy formulation). Design brief formulation (i.e. idea finding). Product development (i.e. strict development). Product launch and use (i.e. realisation). From this point of departure Buijs and Valkenburg (2000, 2nd ed.) developed a more detailed model of the product innovation process consisting of 17 steps in a given order (see figure 5). This model puts more emphasis on the first phase of the product innovation process, the Strategy Formulation (or product planning). For the explanation of product innovation in relation to the corporation, its brands and the kind of new product the company should develop, a very detailed description of the first stage of the innovation model is presented. The strategy formulation stage is subdivided into six activities:

Analysis of the present situation, which leads to the strategic situation of the company;

Internal analysis; External analysis; Search area generation; Search area evaluation; and Search area selection. Based on an analysis, the strategic situation of the company is formulated. The strategic need for innovation is made explicit by estimating the future corporate situation when no strategic changes are made. During the internal analysis, the strategic strengths, the core competences are defined. In the external analysis, the

competitive environment is analysed and the opportunities and threats are made explicit. Search areas are strategic ideas for innovation and potential new business opportunities. A search area is a combination of a strategic strength and an external opportunity. During search area evaluation, the strategic innovation ideas are checked with the outside world by interviewing experts, looking at patents, observing potential clients/users, etc. In search area selection, a definite choice is made. The selected search areas form the starting point for the next phase: design brief formulation.

Circular Chaos: the Delft Innovation Model Inspired by the circular four-stage innovation model, the linear and sequential 17-step model was adapted (see figure 6). Product innovation processes are intended to help companies design and introduce new products, which customers are willing to buy and use. Therefore, in product use the innovation process ends, but at the same time this forms the starting point of a new product innovation process. Visualizing the innovation process as a circular model suggests that there is neither beginning nor end, which is true in the sense that introducing a new product on the market will lead to reactions from competitors. These in turn will cause the original innovating company to start the next new product innovation process in order to regain its competitive advantage.

Process Innovation
Introduction Business must come to grips with the importance of innovation. But how does an organization ensure that it goes about innovation in a consistent way and then achieves the benefits associated with effective innovation. In our engagements as BPM consultants we have noticed that process innovation is quite commonly misunderstood and undervalued. Many people think that innovation is a lucky flash of inspiration or a unique skill set mastered by a fortunate few. The abundant literature on innovation showcases the examples of enlightened and successful CEOs who have completely revamped their business model to provide their organization with significant innovation. This article shows that innovation itself is a process that can be mastered by everyone in the organization, and that innovation can, and should, occur at different levels in the organization. We will describe several examples of process innovation and trust that you will be inspired by them. Howard Smith stated, To satisfy shareholders, innovation must be repeatable, procedural, and algorithmic. Making effective progress requires much more than inspiration. Blockers For Process Innovation It is remarkable how many ideas originating from the work floor have the potential to radically improve business processes. Unfortunately, these people are rarely asked to share their views, and, if they do, the ideas are often discarded by middle management as too radical or not worthy of consideration, and this can be used as an excuse for not asking for or contributing further suggestions. In order to create an environment that will allow and encourage people to provide their innovative ideas, an organization must provide a trusting, caring organization where all personnel feel an ownership for the innovative process. Trust is critical, and personnel must feel that they can trust their leaders and the environment in which they function. Caring is about respect and empathy for

others, and ownership is about providing people with as much control over their own destiny as is possible. The following syndromes are also often seen within organizations (Jeston & Nelis 2006): Around the edges syndrome where the processes and associated people are treated like sacred objects: They cannot, or do not want to, discuss efficiency and effectiveness, or ask the tough questions. Executives keep looking at the edges of the problem and not at the heart solving symptoms rather than the cause. For most of these organizations. innovation is limited to bringing in new technology rather than addressing the fundamental issues. Black box syndrome where executives see their processes as a black box. They dont know the details, but somehow the processes produce outcomes. The executives have a feeling that these processes may not be as efficient, or as effective, as they could be (quality and rework are not measured), but at least the processes work and the executives are afraid to change anything because change might disrupt these fragile black box processes, and fixing a problem is tough when you do not understand it. Tom Davenport (in BP Trends September 2004) highlighted the lack of process-centric middle management. This lack of a process view can block new ideas reaching executive management, and stop new directions from executive management being fully understood and implemented at the working level. Various Level Of Process Innovation Process innovation can and should happen at various levels within the organization as no organization can depend solely upon innovation occurring at one level only. Successful organizations have an innovation process working its way through all levels of the organization. Hamel (Harvard Business Review) states, Innovation has become a mantra: Innovate or Die. A company cant outgrow its competitors unless it can out-innovate them. Surely everyone knows that corporate growth true growth, not just agglomeration springs from innovation. This article will provide various examples

of process innovation, using the various innovation drivers, which include technology.

Levels of Process Innovation

Redesign Of Industry Value Chain Customer Self Service: Booking travel tickets online has drastically changed the travel industry. More and more customers book online, which provides two main benefits: firstly, customers have more control; and, secondly, it provides a more optimal process, not just because the customer enters the required information, but it also ensures that there is a higher level of data integrity. A question the organization should ask itself: How much information do you capture from your customers and how much do you allow your customer to enter? Customer-to-customer interactions : Customers do not only exchange ideas, information, and opinions; they are also able to purchase and sell goods and services, for example, on eBay. This forces organizations to refocus its attention on the value that it Small improvements Redesign Of Business Processes developed around customer wishes: A car insurance company representative who visits customers at a location convenient for the customer, offering on-the-spot assessments and providing the customer the choice between getting the damage repaired or providing immediate payment to enable the customer to arrange for the repairs is fundamentally a different process from insurance companies where the customer has to visit a predesignated repairer. This company was successful by fundamentally redesigning their business rather than making marginal changes; and by ensuring that customer wishes, value proposition, and their business processes were all aligned.

A question the organization should ask itself: How many processes are designed around customer wishes rather than processes inherited from the past? Flexibility is the process rather than the exception. Dell is a great example that undermines the commonly held idea that a reduction of customer choice leads to more efficient processes. If you ensure that customer choice (or, in other words, flexibility) is embedded in the process, it is possible to achieve very competitive flexible customer focused processes. This sounds simple, but many organizations still struggle with this concept: A white-good manufacturer produces fridges with various options. Only after a detailed activity based costing does he realize that the additional revenue for a few minor options (e.g., a few extra lights and buttons) does not cover the additional costs such as, additional handling costs, storage costs. and reduced economies of scale. Conclusion: If you do not build flexibility into your process, your true cost of flexibility might outweigh thebenefits. Redesign Of Processes Use of real-time and geographical information. The logistics industry has been able to improve its processes significantly: RFID (Radio Frequency Identification) technology is a cheap way to track goods. The use of real time information provides not just the current status, but also the predicted future status. For example, the industry can assess what SLA penalties will be levied without any pro-active correction action and what is the optimal action to ensure that the SLA penalty will either be removed or reduced to a minimum, e.g., through re-routing of the route. Furthermore, these options provide the customer with the ability to track or trace their products real-time, at the same time reducing workload for the call center, which previously would have had to answer calls from customers seeking this information. A question the organization should ask itself: Are you applying the latest technology in supporting your business, or are you still relying on old or outdated technology?

Workflow management and document management. Many companies still rely too much on paper-based files, making it difficult to assess and track information. Companies have reported improving efficiency of up to 300% by using these technologies. A European bank faced increasing processing times; these caused the organization to enter a negative spiral: Longer processing times caused an increase in customer inquiries about the status of their transaction, resulting in more time spent answering these queries and less time in processing, which had the effect of causing even more delay. An integrated workflow management and document management system ensured that the processes became faster, more predictable, independent of individuals (e.g.,sickness and holidays), and the answering of queries could be completed in real time, saving significant time and effort. A question the organization should ask itself: How much data are we reentering and how accessible is this information for other relevant and authorized people in the organization?

Improvement Of Subprocesses Avoid having one standard process for a variety of situations. A mortgage company was able to reduce the processing time for 95% of its mortgages from 3 weeks to 3 days by separating the odd 5% that require substantial additional checking from the main stream straight-through processing, which could be done by an automated solution. Mobile communication allows employees and customers to access timecritical, location-based information. Utility companies use mobile devices for a wide range of applications providing real-time details about customers through access to the back office. Sales staff are able to process on-site quotations and process orders with instant and built-in validation as to whether the order is complete and correct and that the required resources are available. Our research has shown that up to 40% of orders contain errors where forms are incomplete (not all fields filled), inconsistent (fields contradicting each other or where a proposed configuration is impossible) or incorrect information (e.g., wrong address).

Indicators For Innovation Ask the Why do we do processes this way? question? If the answer is merely Because we have always done it like this, it is a clear indication that the process/organization needs innovation. Think from the customers perspective: What would I want if I were a customer? and as Peter Fingar states in his book Extreme Competition(2006): The customer is no longer king, the customer is now a never satisfied dictator. Look for innovative ideas from other organizations and other industries, and see how the organization can apply them. A starting point would be to look at all the ideas in this article and see which ones are applicable in your organization. Do not fall into the trap of dismissing a radical idea before serious consideration and thought has been given to it, as you do not want to become one of the innovator blockers. Ask, Where is the current pain and frustration in my business processes? These may reveal strong indications that a process does not flow smoothly. Addressing these issues also provides good visibility of the initiatives required. Biggest Challenge Of All The biggest challenge for innovation has often proven to be the actual implementation. This article has shown that there is a wide range of innovation drivers with significant business benefits. Unfortunately, many organizations have not yet realized the full benefits, mainly because of three reasons: Many initiatives are not aligned with the organizations strategy. Successful organizations have a close interaction between organization strategy and the business initiatives supporting the strategy. Porter has argued that many organizations talk strategy, but have not followed through with the implications of the strategy. It didn't make the hard choices required to actually implement a specific strategy, and hence, it did not create the highly integrated business processes that are very difficult for rivals to duplicate. . He doesn't suggest that senior executives should get into the design or redesign of specific business

processes, but he does suggest that they think of the themes that will be required to implement their strategies, which are ultimately defined by products and 5 customers, and think about the hard choices that will need to be made to assure that the themes and key processes will fit together and be mutually reinforcing. When organizations do make the hard choices they find that the themes reinforce one another and the activities fit together to optimize the strategic position, BPTrends Mar06. Many organizations take ad-hoc and isolated initiatives for process

improvements. This is often broken down into various isolated initiatives in the same value chain or the purchase of separate technologies (e.g., workflow management and document management systems). A business-driven and dynamic enterprise architecture, with a lead role for the business choices and a supporting role of the processes and IT, is required. However, no enterprise architecture will be successful unless it is considered by management and the business as a useful tool to make choices for the future, rather than a cumbersome mechanism that just records the past. Many organizations fail in obtaining the benefits of their initiatives. The main cause is that true business process innovation requires a variety of skills business knowledge, process thinking, IT literacy, people change management capability, project management skills, and, last but not least, excellent stakeholder management. Many organizations embark on this journey without a clear approach (way forward) and get lost on the way. A proven and pragmatic BPM approach certainly helps. All these three challenges relate to management. Thus, management must be both more open to process innovation and they must actively encourage innovation to show the way forward.

CONCLUSIONS
At the beginning of the Introduction we pointed out that small firms have attracted increasing attention as important sources of product innovation. Among our samples of small or small-to-medium sized firms, product innovation was extremely common, even though we were covering only the mechanical engineering or machine building industry and not the high-tech areas of electronics or instrumentation. In the Federal German Republic, virtually all the firms were engaged in innovation: it was a day-to-day activity. In the British sample, the proportion was lower but this was substantially accounted for by differences in average size; and even among British firms with less than 20 employees, there were many with a high commitment to product innovation. Following on from this, we have also shown that much of the product innovation was in depth, involving improved functions, completely new departures, patenting, or the use of microelectronics within the design. Although some of the innovation consists only of minor details, this by no means applies to the majority of the innovations revealed by the study. In this Chapter we have begun to explore regional differences in product innovation. And we have immediately shown that, at least so far as the particular regions selected were concerned, the differences were not of a gross kind. Innovations were widespread among small firms even in the economically depressed regions of the North-East or of Bochum/Dortmund. Yet differences of important qualitative types did exist. In Britain, every comparison of a qualitative kind showed that the small firms in the East Midlands were innovating at a higher intensity than the firms of the North-East. And in the Federal German Republic, the qualitative difference was particularly clearly brought out by the relative use of microelectronics components. These findings set much of the agenda for subsequent chapters. Clearly, we cannot be content with a programme limited to contrasting innovators and non-innovators. In the German sample, there would be few indeed in the latter group; and in both countries, the interesting distinctions only become apparent when one looks into the type and quality of innovation. Our aim must be, not only to clarify the conditions for innovation, but also to understand what leads to innovation of differing intensity and effectiveness.

BIBLIOGRAPHY
www.coolbusinessideas.com www.eatnineghost.com/26-really-creative-and-innovative-products www.sardi-innovation.com www.ideo.com www.red-dot.de www.grandesign.it www.wikipedia.com www.google.co.in