2012 APAC Portfolio Management and Open Collaboration

growth team m e m b e r s h i p™ 1 asia pacific Portfolio Management and Open Collaboration 2012 r & d /innovation and product development priorities survey results TWEET ABOUT THE SURVEYS #2012priorities Co-SponsorThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.

growth team m e m b e r s h i p™ 2012 survey results 2 CONTENTS Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 INTRO Survey Purpose and Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 What is the Growth Team Membership™ . . . . . . . . . . . . . . . . . . . . . . . . .5 R&D/Innovation and Product Development Overarching Challenges . . . . . . . . . . .6 SECTION 1 Key R&D/Innovation and Product Development Challenges . . . . . . . . . . . . . . . .7 SECTION 2 R&D/Innovation and Product Development Resource Trends . . . . . . . . . . . . . . 10 SECTION 3 Special Interest Topic: Open Innovation . . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 4 Respondent Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.

growth team m e m b e r s h i p™ 2012 survey results Introduction 3 R&D/Innovation and Product Development Executive Summary SECTION 1: Key R&D/Innovation and Product Development Challenges Key Internal Challenge Key Internal Challenge Root Cause Generating an accurate and relevant technology roadmap Insufficient personnel SECTION 2: R&D/Innovation and Product Development Resource Trends Budgets Resources Portfolio Allocation R&D typically has an annual budget Budgets and staffing levels are expected to More resources are being allocated to short- below $500,000 ($USD) increase and medium-term innovation projects SECTION 3: Open Innovation (OI) OI Team Key OI Challenge External OI Sources Majority of companies have some form of Creating an open innovation collaboration Customers are the primary source of OI ideas OI team frameworkThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Introduction 4 Survey Purpose and Respondents 67 survey respondents Research Objective Methodology Survey Population Co-Sponsor To understand the most pressing Web-based survey platform Manager-level and above challenges shaping R&D/innovation R&D/innovation and product and product development development executives from executives’ 2012 planning companies throughout Asia PacificThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Introduction 5 What is the Growth Team Membership™? GTM is a subscription program that supports executives GTM provides best practices, events, and services that enable within the functions that report to the CEO executives to address challenges within their companies CEO’s Growth Team™ GTM: Creating Client Value R&D/ GTM’s case-based best practices help executives: R&D/ Innovation Innovation Corporate Sales Strategy Leadership Speed the design and implementation of initiatives by not reinventing the wheel Marketing CEO Corporate Development Save money and reduce risk by avoiding mistakes made by other companies Investors/ Market Finance Research Accelerate problem-solving with a cross‑industry perspective Competitive Intelligence Improve their functions’ and companies’ performance and productivity GTMresearch@frost.com www.gtm.frost.com twitter.com/Frost_GTM slideshare.net/FrostandSullivanThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Introduction 6 What’s Keeping R&D/Innovation and Product Development Executives Up at Night in 2012? R&D/Innovation and Product Development Overarching Challenges Sample Solutions from GTM Portfolio Management R&D/innovation executives need to develop Learn how ConvaTec developed a portfolio management process a methodology that allows them to prioritize that makes efficient use of cross-functional governing teams and innovation projects based on their economic value phase reviews. and role in the portfolio. Open Innovation As open innovation continues to gain momentum, Learn how Amway Corp. establishes an Open Innovation (OI) team R&D executives need to establish a process for to draw on ideas and technologies outside of the company and identifying, screening, and nurturing emerging increase its capacity for systematically identifying and developing technologies. breakthrough innovations. Open Innovation and Partnerships As R&D executives apply open innovation to their Learn how our Strategic Partnerships toolkit helps you screen product development processes, they often struggle and evaluate potential partners based on their degree of strategic to evaluate and establish trust with strategic partners. alignment and willingness to collaborate. Contact us at GTMResearch@frost.com.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 7 INTRO SECTION 1 Key R&D/Innovation and Product Development Challenges SECTION 2 SECTION 3 SECTION 4The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 1 8 Top Five R&D/Innovation and Product Development Challenges Challenge 1 Generating an accurate and relevant technology roadmap (29%) Challenge 2 Prioritizing innovation ideas and projects (14%) Challenge 3 Integrating input from partners in Sales, Marketing, etc. (17%) Allocating portfolio spend across short-, medium-, and long- term Challenge 4 projects (15%) Embedding the voice of the customer into the innovation process Challenge 5 (15%) Note: The respondents were asked to rank their top five challenges. The percentage values indicate how many respondents listed that particular challenge as their first through fifth challenge. SURVEY QUESTION: What are the top five functional challenges shaping your R&D/innovation and product development strategy?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 1 9 R&D executives’ challenges are mostly attributed to staff and process limitations Top Five R&D/Innovation and Root Cause of Top Five R&D/Innovation Product Development Challenges and Product Development Challenges Generating an accurate and relevant Challenge 1 Staff: Limited resources (33%) technology roadmap Challenge 2 Prioritizing innovation ideas and projects Process: Ineffective process (33%) Integrating input from partners in Sales, Challenge 3 Staff: Limited resources (100%) Marketing, etc. Allocating portfolio spend across short-, Strategic Alignment: Lack of common Challenge 4 medium-, and long- term projects objectives (33%) Embedding the voice of the customer Challenge 5 Process: Inadequate communication (60%) into the innovation process SURVEY QUESTION: lease indicate the root cause—staff, process, technology/systems, or strategic alignment—of your top five R&D/innovation and product P development challenges.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 10 INTRO SECTION 1 SECTION 2 R&D/Innovation and Product Development Resource Trends SECTION 3 SECTION 4The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 11 R&D budgets are typically under $500,000 ($USD) 2012 R&D/Innovation and Product Development Budgets 40% percentage of company revenue allocated to r&d Companies dedicated approximately 5% of their 2011 revenue to their 2012 R&D/innovation and 33% product development budgets. 30% 20% 20% 15% 12% 12% 10% 5% 3% 0% Below $500,000 $500,000 to $1 Million to $3 Million to $5 Million to $10 Million to $20 Million $999,999 $2.99 Million $4.99 Million $9.99 Million $19.99 Million or more SURVEY QUESTION: hich of the above ranges (in $USD) best describes your 2012 total R&D/innovation and product development budget (all expenditures W on R&D/innovation and product development activities and general & administrative—including staff)?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 12 Budget allocations are on the rise for short- and medium-term projects Change in Portfolio Allocations Short-Term, Incremental Medium-Term Innovation Long-Term Innovation Disruptive Technologies Innovation (adoption in 2 to 4 years) (adoption in 4 to 10+ years) (adoption within 2 years) INCREASE 68% 59% 35% 18% STAY THE 34% SAME 25% 47% 55% DECREASE 7% 7% 18% 17% SURVEY QUESTION: In comparison to 2011, your 2012 R&D/innovation and product development budget for each of the above project categories will…The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 13 R&D executives foresee additional resources in 2012 R&D/Innovation and Product Development Staffing and Budget Changes Staffing Budget Decrease Moderately 2% Increase Substantially Increase Substantially 10% 15% Stay the Same Stay the Same 41% 33% 49% 50% Increase Moderately Increase Moderately SURVEY QUESTION: In comparison to 2011, your 2012 R&D/innovation and product development staffing and budget will…The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 14 Most R&D executives rank their functions’ effectiveness “Above Average” R&D/Innovation and Product Development Effectiveness Exceptional 10% 41% Average 49% Above Average SURVEY QUESTION: How would you rate the performance or effectiveness of your function compared to others within your industry?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 15 INTRO SECTION 1 SECTION 2 SECTION 3 Special Interest Topic: Open Innovation SECTION 4The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 16 The majority of companies employ a dedicated open innovation (OI) team OI Teams Within R&D OI Team Structure Yes Sub-group within R&D/product 72% development (20%) SURVEY QUESTION: o you have staff dedicated to open innovation? If so which of the above describes your open innovation team structure? D number of oi staff The majority of companies that employ open innovation have 10 dedicated OI staff members. This number is based on the median value for this question. SURVEY QUESTION: Approximately how many people in your company are assigned to open innovation?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 17 Respondents are focused on challenges associated with establishing an OI process Top Five Open Innovation Challenges Creating an effective open innovation collaboration framework (33%) Establishing buy-in internally for open innovation (15%) Overcoming the fear of lost IP and competitive advantage (21%) Developing a process to assess innovation concepts’ feasibility (20%) Garnering the internal resources needed to test innovation concepts’ feasibility (18%) SURVEY QUESTION: Rank the above open innovation challenges in order of importance.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 18 Open innovation is used predominantly for idea generation and concept testing Use OI in the Product Development Cycle Concept testing Idea generation Idea screening Product launch and development 33% 24% 30% 11% SURVEY QUESTION: During which stage(s) of the product development process does your company use open innovation (check all that apply)? Top Three OI Sources Suppliers (19%) Customers (33%) Adjacent businesses (30%) Academia (19%) SURVEY QUESTION: Please rank your top three sources of open innovation ideas.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 19 INTRO SECTION 1 SECTION 2 SECTION 3 SECTION 4 Respondent DemographicsThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 4 20 Respondent Demographics Enterprise Type Business Model Not for Profit 2% B-to-C Government/Public Sector Company The majority of (Indirect) respondents come from Venture Capital 9% 5% B-to-B companies. Hybrid 3% 20% 38% Public B-to-C 60% Company 20% 43% (Direct) B-to-B CompanyMost of the respondents Private N = 65 N = 66work in privately heldcompanies. Company Revenue 50% 30% 31% 25% 17% 17% 5% 0% N = 66 Below $100 Million to $500 Million to $1 Billion to More than $100 Million $499.99 Million $999.99 Million $11 Billion $11 Billion SURVEY QUESTION: Please indicate the type of enterprise, business model, and revenue ($USD) that best represents your company.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 4 21 Respondent Demographics: Top Five Participating Industries Healthcare and Life Sciences 20% Electronics and Security 20% Government/Public Sector 21% Automotive and Transportation 21% Information and Communication Technologies 29% 0% 20% 40% N = 66 SURVEY QUESTION: Please indicate which region you are located in and which industry categories best describe your company (check all that apply).The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

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2012 APAC Portfolio Management and Open Collaboration

by Frost & Sullivan on Jun 20, 2012

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