Digital transformation is revolutionizing the way we live and work every day. Most industries and businesses have been affected in some way or another by this radical change, and the development of modern digital products naturally has to adapt. In fact, Software AG’s 2021 ‘Situation Report’, a global survey looking into the digital transformation strategies of IT leaders, found that 97% of its respondents had undergone some form of digital transformation in 2020 alone. If you’re unsure whether to embark on a digital transformation journey of your own, read on to discover the 5 top advantages of digitizing your product development process!
What is digital transformation or “digitization”?
Before we dive into the 5 advantages of digitizing your product development process, let’s take a quick look at what digital transformation means in this context. The Institute for Digital Transformation defines digital transformation as the “integration of digital technologies into a business resulting in the reshaping of an organization that reorients it around the customer experience, business value and constant change.”
In other words, digital transformation:
- reimagines and redefines how companies leverage tools, people, and processes
- creates new business models to increase efficiency and productivity
- and looks for ways to deliver even more value to customers by better addressing their pain points.
And the more personalized the customer experience is, the happier the clients will be, empowering companies to grow and generate more revenue. At its core, digital transformation seeks to technologically improve how we work.
What does digital transformation mean in product engineering?
In the context of digital transformation in product development, digitization can refer to a variety of different things; we’ll highlight some of the most important elements below:
Digitization often refers to the use of new technological tools to help optimize product development. Think innovations like automation, machine learning, AI, smart and connected devices, IoT, digital platforms, cloud, and more. For instance, tools like CAD (Computer Automated Design) and 3D printing for rapid prototyping have drastically sped up the lifecycle of product development from concept to manufacturing. Leveraging automation and AI, by using virtual (digital) twins for example, can also help with carrying out tests at scale. Finally, all the data gathered by various platforms helps create new and improved products as well down the line.
New ways of working
Second, digitization can also allude to new ways of working which provide support for the innovative uses of technology and tools. Many companies are looking to Agile ways of working or hybrid models to help them scale productivity and quality. Meanwhile, the increasing use of digital platforms for product development like ALM software, enable businesses to unify their information, tasks, processes, and documentation in one source of truth, which helps cross-functional teams be as productive and efficient as possible.
Customer relationship management
Thirdly, digitization also contributes to reshaping our relationship with customers throughout the product development process. In industrial age businesses, customer requirements were typically gathered by focus groups, i.e. demographically diverse groups of people assembled to evaluate and give feedback on a product before it is launched. Then they created the product and tested it to make sure it was working as expected, and when they felt it was ready, sent it off for production and launched it on the market.
In the digital age, technology has drastically transformed and accelerated that process. Nowadays, requirements are often collected with user groups of thousands of people or potential new users through social media and market research companies. Users and prospective customers expect to be in constant contact with companies and brands, meaning that companies have to really up their game to provide the community-centered and relationship-based customer experience that has become standard nowadays.
5 benefits of digitizing your product development process
There are many benefits that come along with digitizing your product development processes; here are our top 5 that we think are worth knowing when you’re evaluating whether or not to digitally transform areas of your business. (That said, it’s important to note that digital transformation seems like a necessity that will inevitably transform the market environment of your company – therefore, making the switch sooner rather than later is favorable.)
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- Improved productivity
The variety of new tools and platforms available can be overwhelming. However, once you’ve done the groundwork to optimize workflows using these resources, development teams can carry out their tasks much more productively. To give you an idea of what’s possible, automating administrative processes can significantly accelerate the speed of digital product development, while AI and machine learning can speed up user identification and testing. Using digital platforms like ALM software to manage the entire product lifecycle also allows teams to monitor the status of their projects in real-time, spot any changes or issues, and react quickly before causing any delays and losing money. It also helps people to make solid, data-backed decisions — much more quickly than ever before — as you can avoid unnecessary meetings, emails, and calls. Making decisions quickly leads to higher productivity and ultimately, gets new products on the market faster!
- Better collaboration
When you depend on legacy solutions that have been around for decades, are out of date, and don’t interface well with modern tools, you typically run into trouble. Product development teams inevitably end up working in silos, which isn’t helpful for clear communication and efficient collaboration. This can be especially difficult in digital product engineering teams which include employees from different areas of the business who don’t automatically have clear oversight of what’s going on in other departments. Digitizing communication and project administration combined with Agile ways of working and an emphasis on solid communication, breaks down silos and enhances overall project transparency. This helps teams stay on the same page at every stage of the development journey and makes collaboration more efficient.
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- Increased speed to market
One of the biggest motivators for companies to embark on a digital transformation journey is to increase their speed to market, as this helps them stay relevant and a step ahead of the competition. By putting the tools, processes, and the right talent in place in their organizations, businesses can drastically accelerate how fast they bring new products to market. Other benefits like the ability to create rapid prototypes, test products before they have even been created, and incorporate customer feedback early on to adjust along the way also makes it easier to get products ready for the market. Finally, using digital platforms which collect data also contributes to go-to-market efforts as product development teams can leverage insights from previous prototypes and iterations to make smart decisions, fast.
- Save money and achieve higher profitability
With increased productivity and speed to market also comes the opportunity to save money and achieve higher profitability. Agile ways of working support early problem detection and resolution, as well as the consistent incorporation of customer feedback. Rapid prototyping and AI-powered testing help to reduce the cost and turnaround time of samples. And the more satisfied customers are, the more they tend to adopt the product and engage with it, meaning that product developers can avoid making samples that won’t be used and focus their efforts on the ones which will actually go to production. In general, PLM solutions help businesses focusing on digital product engineering stay within timelines, on budget, and make better overall sourcing decisions based on data.
- Higher customer satisfaction
Customers nowadays are much more empowered and know what they want, when they want it. They have overwhelming access to information and are determined to get the most out of the products and services they purchase – and digital transformation provides the means (as well as the communities) for them to express this. This is why in the age of digital transformation, customer experience comes first. As a result, there is a heavy emphasis on incorporating customer feedback throughout the product lifecycle to ensure that the final product is as close to ideal for them as humanly possible, and then building in customer feedback to further iterations of the product. With a constantly shifting market and increasingly demanding customer requirements, digitally agile businesses are able to keep up with customer expectations to create experiences that delight them and keep them coming back for more.
Companies of different sizes and spanning the full spectrum of industries are embarking on digital transformation journeys of their own in order to meet ever-shifting customer needs and market demands. Digital product development, in particular, really zooms in on customer obsession and harnessing the kind of business agility you need to stay a step ahead of the competition. For more information on digital transformation in product engineering, check out our eBook on the topic here: