What is the success rate of product development today? We have some research that will give you some insight.
Where Do You Stand?
If you’re like a lot of manufacturers, you’re often curious about how other people are successful with product development. A lot of people think they are uniquely poor at it in terms of hitting release dates and shifting people around, but I think the research we have shows us that there are some issues across the board. Let’s take a look at that.
So first off, let’s take a look at the rate of cancellations. We found that twenty percent of all projects were actually canceled. This number isn’t horrible, and as part of a normal portfolio management process, you do need to kill projects every once in a while. The requirements might change, or there might be a disruptive release of a new product where a subsequent release that you had planned no longer makes sense. This is okay, although twenty percent is a bit high. Something more in the range of twelve to fifteen percent probably makes sense.
Now, let’s talk about the percentage of projects that are not launched on time. This means you miss your launch date, or even worse, your delivery date. One-quarter of all projects ended this way. The paired finding that goes along with this is what percent of projects were launched on time, but required a shift in resources. So, between this one and the twenty-five percent statistic, this commentary is relevant to both of them.
On the Bright Side…
When a project is late, you will often see executives start to shift resources or reassign resources from current ongoing projects to that one project they need to get up and out. In some cases it’s successful, and the product is still launched or delivered on time. That’s forty-two percent of projects.
But in some cases, it’s still not delivered on time. Even with that extra effort, twenty-five percent of projects still miss that launch date, which is pretty amazing.
This leaves a mere thirteen percent of all projects that are launched on time, without any resource changes. This is essentially the percentage of projects that go as expected. Thirteen percent. If you’re looking at how your company runs product development internally and you see a lot of stumbling, you’re not alone. There are lots of other companies that are in this same boat.
But here’s the deal. This is where technology-led initiatives can make a difference. They often involve a change in terms of staffing roles, responsibilities, training, processes in terms of checks, steps, extra work up front so you can save on the backend.
Technology is often a key enabler for these types of initiatives. These initiatives can help you take advantage of this improvement opportunity, which is how you should look at the findings that we just reviewed. There is an improvement opportunity that will help you compete better in the market, improve your profit or your margin in a company, and see other success in product development.