As we welcome the new year, we asked our team of product innovation experts and thought leaders to identify trends they’re seeing across the industry and within our customer implementations. Ten key trends surfaced from that request with great potential for driving innovation, reshaping R&D practices, and redefining product portfolio management.
The trends outlined in this blog offer a glimpse into the future of product development and some exciting opportunities for product-driven companies to achieve real ROI regarding cost savings, efficiency, productivity, digital transformation benefits, and employee satisfaction.
Trend #1: Greater Financial Scrutiny on New Product Development Balanced Against Innovation Opportunity
While the U.S. was able to avoid recession in 2023 and consumer confidence is optimistic entering 2024, companies are still proceeding with caution, given the elevated (56%) chance of recession sometime in the next 12 months, according to the New York Fed’s recession probability model.
This economic uncertainty, combined with higher interest rates for lending and the U.S. presidential election, often means purse tightening, hiring freezes, and a slow in new product development innovation. Companies will have to carefully weigh investments in the product portfolio, balancing the desire to slash product spending with the immense options available for faster and cheaper product development offered via 3D printing, AI, AR (augmented reality), and VR (virtual reality) capabilities.
Simple cost analysis and prioritization methods for complex portfolios and criteria will likely fall short.
In this way, organizations can gain more confidence and clarity that resources are allocated to the products with the highest potential for success and profitability.
Trend #2: Measuring the Product Portfolio Differently
The considerations for measuring product success in the marketplace are evolving beyond traditional criteria like revenue, market share, and customer satisfaction. Factors influencing product development and delivery, like environmental impact (e.g., CO2 emissions), sustainable packaging, and social responsibility, are critical factors in driving brand choice with consumers and, thus, the company’s bottom line.
The variety of success indicators will only grow and get more diverse, with more organizations incorporating circular economy principles into their product innovation practices, emphasizing product reuse, recycling, and refurbishment to drive resource efficiency and minimize waste.
As the additional data points evaluated to produce a winning new product development roadmap increase and get more diverse, managing, tracking, and pivoting this information instantly will become vital for informed decision-making and product performance.
Trend #3: More Innovative Products with Reduced Concept Development Time and Cost
Innovation is poised to accelerate in 2024, fueled by technological advancements such as 3D printing, AI, AR, and VR. These tools will play a significant role in product design, testing, and marketing, enabling companies, regardless of size, to prototype new products faster and more cost-effectively, leading to reduced cycle times and lower development costs.
The reduced risk and lower upfront investment that these technologies bring will encourage manufacturers of all kinds to take more innovative bets, leading to greater efficiency and a more dynamic product landscape.
These same tools will enable immersive collaboration experiences, allowing teams to easily connect, iterate, and innovate across geographies, bringing the best and brightest to the same (virtual) table to deliver new ideas faster and at a lower cost.
Trend #4: Greater Coopetition
By partnering with competitors to offer complementary products or services, companies can expand their market reach, reduce costs, and drive innovation. Coopetition also fosters a collaborative ecosystem that benefits all parties, increasing efficiency and productivity.
Companies seeking additional revenue streams beyond traditional product sales will seek ways to monetize their best practices, facilities, research, and services. We are seeing this trend gain a lot of traction in the Life Sciences sector, with companies leveraging their expertise and resources with competitors, making it a win-win-win for partnering companies and patients.
Trend #5: An Amplified Voice of the Customer
In 2024, one of the most significant trends we’re predicting in product development will be the heightened amplification of the voice of the customer (VoC), leveraging AI, machine learning, and crowdsourcing to deliver enhanced customer and user experiences along with more personalized products.
Greater collaboration and crowdsourcing will take place through every stage of the gated product development process, involving activities like:
- Enhanced experimentation
- Ideation sourced from both current and prospective customers
- Product testing
- Gauging customer sentiment
- And even some cooperative competition (coopetition)
Taking a page from their IT counterparts, product development organizations are adopting more iterative processes. This shift reveals more significant opportunities to tap into the collective intelligence of diverse internal teams and external communities. In addition, it enhances creativity, fosters a sense of inclusivity and engagement among employees, and helps build brand affinity amongst customers. All of these residual effects can improve employee satisfaction and revenue.
The wisdom of the crowd, combined with advances in technology, enables mass product customization tailored to individual customer needs and preferences. This personalization creates an improved user experience – a significant trend for 2024.
Trend #6: Continued Expansion of Smart, Connected Products
The expansion of 5G technology will fuel the proliferation of IoT products globally and in all industries. From the wild benefits of smart, connected medical devices to the practical simplicity of Wi-Fi-enabled household appliances and lightbulbs, IoT is reshaping and richly enhancing user experiences and how people and products interact.
Smart, connected products will also continue to deliver unique opportunities that extend far beyond our dreams. For instance, predictive maintenance will become commonplace, allowing companies to proactively identify and address issues in products before they occur, increasing safety, reducing downtime, and decreasing maintenance costs.
If improved operational efficiency and gaining a competitive edge in the market weren’t enough, savvy companies who can harness and monetize the unprecedented volumes of real-time data generated from IoT products could also use that information to create new revenue streams.
Trend #7: Data as a Service (DaaS) and Revenue-Generating Product
As the volume of data generated by smart, connected products, IoT devices, and digital platforms grows, companies have new opportunities to leverage this data to create new revenue streams. By analyzing, packaging, and monetizing data already captured, companies can uncover valuable insights that drive product innovation, enhance customer experiences, and unlock new lines of business.
As data transforms from internal information used to drive decision-making to a product or data service packaged for sale, companies face a whole host of challenges around anonymization, compliance, integrations, and consumption. The companies that can successfully address these issues will find themselves in a very profitable and advantageous position.
Trend #8: Single System of Record (Product Data)
A unified platform to manage the product development process and all the product data necessary for decision-making at the strategy and roadmap levels will be crucial in 2024. The information used to inform high-level decisions must be current and accurate, which is a difficult task amid mergers, acquisitions, and different teams using different applications.
To overcome this challenge, companies seek to integrate systems, eliminating redundancies and duplicate entries, to reduce errors and improve overall efficiency. This lowers the total cost of ownership (TCO) and, more importantly, ensures that all product leaders are making decisions based on the same information. Alignment in this arena streamlines product strategy implementation and enables the agility to pivot when disruptions and market changes occur quickly.
A unified platform that facilitates the seamless flow of information from ideation to end-of-life (EOL) is essential for efficient product portfolio management.
Trend #9: Continued Adoption of Agile Practices in Product Development
Agile methodologies will continue to gain traction within product development in the coming years, enabling companies to iterate quickly, respond to and incorporate customer feedback, and deliver products to market faster and more efficiently.
These efforts should be crucial elements of any strategy aimed at driving long-term success and profitability.
Trend #10: Volume Modeling
In 2024, companies will increasingly rely on volume modeling to forecast future projects and resource requirements. By incorporating future projects into their existing workflows, companies can gain a more accurate and comprehensive view of their product development pipeline. This trend enables companies to allocate resources better, manage capacity, and optimize their product portfolios for maximum ROI.
How Will Your Organization Stay Ahead of the Curve in 2024?
While they weren’t always classified as such, history is rife with disruptions, which now seem to arrive faster and more frequently. Geopolitical factors, the COVID-19 pandemic, and the ensuing supply chain hindrances have all proven that companies must be better prepared for these reality-changing events.
As we look ahead to 2024, become encouraged by technological change and seek out ways it can be used to amp up your digital transformation. And if your transformation isn’t already underway, act fast. Waiting for the competition to catch up is not an option. Young, nimble startups are constantly innovating with cheaper, faster, and better solutions.
Now is the time to embrace innovation, collaboration, and the strategic use of technology and data as a necessity for organizations aiming to stay ahead of the curve.
If you’re interested in seeing how technology can advance your product development portfolio in the coming year, consider exploring the practical possibilities that cover several of the predictions mentioned here.