New Product Introduction (NPI)
Ask engineers and product marketing directors: there is no greater professional satisfaction than guiding a new product from conception through to successful launch. Creating a novel, successful product is often the most rewarding experience in a career. For executives shepherding the process, it provides the unequivocal thrill of accomplishment in a job otherwise often cluttered with politics and compromise. And for two decades now the mantra of survival in telecom is “more new services.” So how come everyone uniformly hates the classic telco New Product Introduction (NPI) process?
We see a lot of marketing around the notion that fielding new services is essential to each service provider’s survival. To a lesser extent we also see this extolled for vendors of equipment and OSS or BSS applications. There is also a lot of hype about various new approaches to assuring rapid and successful new product introductions. “Time to market” is a universal cry. “Innovate or die” is another popular catch phrase, along with “the customer is king,” and the currently popular “customer experience management.”
We all know that “speed to market” does not always equate to “good customer experience.” Speeding up product introduction can introduce significant flaws in the products, or the supporting processes, or the infrastructure systems. These flaws can cause the product to fail. In today’s world of oversight and litigation, product failures cost not just lost revenue and lost market share, they can also bring fines, penalties, and adverse judgments in litigation, and can destroy vendor-buyer partnerships.
We all also know that customers have demonstrated time and time again that speed to the next big thing is not as critical as a product that works as expected. They will wait (at least a little while) for a product that works as promised and is available at a price point they believe provides value for money. Successful NPI is truly about finding that balance between speed and performance.
Many product introductions simply fail. Several studies of product introductions in the last decade of the 20th Century found four out of five failed to furnish the expected positive returns for their company. Almost half of the product introductions actually lost money:
“An ongoing study conducted by PDMA shows that over 40% of product introductions are considered failures. 46% of the money spent by companies on the conception, development, and launch of new products is spent on losers.” [Dave Brock, Partners In EXCELLENCE]