PwC’s study «Digital Product Development 2025 – Agile, Collaborative, AI-Driven and Customer-Centric» shows how digital product development drives performance and makes customers happier. It also uncovers what Digital Champions are doing differently to achieve their results.
It’s a match: digital transformation meets digital development
Today’s customers want personalised products and services that are uncompromisingly tailored to their requirements. The need to remain competitive globally and offer a supreme customer experience at the same time resolutely pushes industrial companies to keep their latest designs, technologies, products and integrated solutions up-to-date. As a result, companies must develop innovative, customer-focused products and services at ever shorter intervals. Such speed and need for innovation is undoubtedly a challenge that developers and manufacturers must respond to by increasing the efficiency and output of their product development, and thereby keep both time and costs under control.
Digital Champions are already deploying key technologies including web-based, next generation product development techniques, data analytics and AI-based solution designs, integrated product lifecycle management (PLM) systems and agile development techniques. Companies that have adopted digital product development, integrate their activities with key partners and are becoming leaders of an integrated development ecosystem. The benefit for customers is evident: integrated complete solutions, rather than individual products and services. Effective co-creation tools, common standards and simultaneous access to joint product development platforms are becoming part of an integrated ecosystem.
Based on data of a survey conducted in December 2018 and January 2019 with 200 executives from industrial companies in central and northern Europe and additional in-depth interviews, we have identified a number of key findings that provide insights into how companies can use digital product development to keep their edge in a competitive and challenging business environment.
Seven reasons for digital product development
It is all about meeting your customers’ expectations. A strong commitment to digital product development is therefore ultimately rewarding. Spend smarter, not more. Digital Champions embrace digital product development and benefit from an array of advantages. Here are the seven most prominent findings from the study:
- Digital product development drives performance
Digital product development promises an increase in efficiency by 19%, is expected to reduce time-to-market by 17% and facilitate the reduction of production costs by 13% over the next five years.
- Customer focus is key
Digital Champions have more customer focus in product development than others. They tap into data and analytics to increase value for customers and develop individually-tailored products.
- New digital products drive competitiveness
Digital Champions are top generators of revenue from new products and services. A total of 14% of champions manage to generate more than 30% of revenue from fully digital products and services, and 29% earn more than a third of revenues from new products within two years of introduction. They also reap far greater benefits from personalisation.
- Data analytics and artificial intelligence (AI) are the new backbone of digital product development
41% of all companies are using data analytics and AI in product development to optimise processes and quality and to better design and validate new products and services. Digital Champions employ data analytics and AI more extensively to achieve better Design for X performance and customer-centric design.
- Digital tools, methodologies and processes boost effectiveness
No need to spend more on product development to get better performance: Digital Champions have introduced effective tools, methodologies and underlying processes to include fully-integrated PLM, digital twins of products and processes, real time co-creation with partners, and agile development principles.
- Cybersecurity is a must
Significant investments in cyber security and sensitive data protection are a must. A total of 71% of the companies still lack an approach that is mature enough to mitigate the cyber risks inherent in data-intensive development processes.
- Vision: product development is part of an agile, integrated ecosystem
Companies need to become part of an integrated partner ecosystem that focuses on internal and external co-creation with agile and digitised development processes and methods with a clear customer focus.