Articles
Software is everywhere. Software is putting the intelligence in all of the smart products we interact with, from the alarms on our mobile phones to the navigation in cars. Now the functionality and differentiation in many everyday products is found in the software. As this trend continues, software may in fact become the product, while hardware will be the platform.
Realising the importance of software, many manufacturers are making changes in the way they develop products, taking on new approaches. These include driving innovation and differentiation – software allows manufacturers to create a unique user experience with products. Ford’s chief technical officer said that over 50% of the buyers of the company’s vehicles do so in part because of the Ford Sync and My Touch technologies – features driven by software.
Software also provides more product variants. The software is often the only difference between car models. Some offer infotainment systems, while some provide packages that improve safety. By simply changing software-controlled functionality, carmakers can offer a variety of models on one vehicle platform.
A company that makes 10 million units of a product and saves $5 per device by moving functionality from hardware into custom software that runs on a commoditised component saves $50 million in costs.
Customer satisfaction can also be raised – software updates allow a product to improve over time.
But the rapid transition towards the industrialisation of software has caught many manufacturers off guard. The growth in the complexity of product development has exceeded the ability of many to cope with the changes required. Companies that we once thought of as hardware specialists are in effect becoming software firms facing new design and development challenges. These challenges include:
Balancing innovation and the proliferation of product variants – in struggling to manage variants, manufacturers often use manual processes that result in significant overheads and cripple innovation.
Coping with the high velocity of change – software often accounts for the most significant portion of engineering changes. And changes have to be managed across software, mechanical and electrical teams to avoid negative impacts on time to market, quality or cost.
Visibility into software release readiness – historically, firms have tracked development and production by seeing the physical results, but software readiness is harder to understand. Without the proper tools, it is nearly impossible to track progress and quality.
Ensuring product quality – while software does drive innovation, it does not implicitly improve product quality, making it imperative that quality is designed into the software development process.
Meeting customer requirements – manufacturers must be able to seamlessly incorporate requirements in product planning and throughout the entire development lifecycle.
These challenges can be managed. First, the significance of software must be recognised by elevating software management roles to match those of other disciplines. Second, it is critical that key software development processes are standardised across the enterprise. Finally, an integral lifecycle management solution should be considered such that development artefacts can be managed and connected and processes can be automated.
Organisations that ensure that software development is effectively managed to accelerate innovation in products will achieve a sustained competitive advantage.