The product is to be sold for use in homes in the UK.
The main elements of the development proposal are:-
You may be able to think of more but these are sufficient for our purposes.
It may seem unreasonable to try and plan and cost the items in the above list but it must be remembered that EEL has been operational for several years and has an active product development program.
The product specification would mainly be the responsibility of Marketing, R&D and Quality, but they would be expected to interact with other departments and access external sources of information as necessary. We have suggested a structured form for a product specification and if this available in template form the process of formulating the specification is made much easier.
It is almost impossible to complete a specification at the proposal stage but it should be possible to specify the main elements of it. Perhaps about 85% to 90% of the specification should be defined at proposal time. Note, if this is not possible it may well be that the proposal is rejected.
The product development is essential for providing:-
The product specification provides essential information to the people producing the development plan.
It is likely that the development plan would be created in a software package, such as Microsoft Project.
The marketing plan for the product should identify end users, customers and sales outlets.
The main customer base for a domestic energy management system is likely to be upmarket- but the marketing plan would show this anyway.
It is likely that Marketing and R&D have already produced a brief marketing plan prior to engaging in the formulating of a full development proposal.
The system would probably designed for existing houses as well as for installation in new properties.
Upmarket building firms and specifying architects would probably be identified as potential customers for the product- note in commercial terms customers are those people that pay us.
Note that it is not that easy to identify sales outlets for existing house owners- do executives visit DIY stores like B&Q?
Competitors would also be identified and analysed.
Of major importance is projected sales of the product over several years.
There should be some contingency built into these projections and they should be made as honestly as possible- it is not the intention to persuade senior management to embark on our project.
End user profiles would have been developed by Marketing to allow the products features to be developed- this would allow the functional aspects of the product specification to be defined. However they should be used throughout the development of the product especially by R&D development staff and technical sales.
Again it may seem unreasonable to attempt to define production requirements and costs at the proposal stage, but some of the examples we have worked through in the notes show that you can plan production at a high level without knowing in detail what the product is actually made up of.
Including production in the proposal ensures it will be considered during the development stage- production set up etc. will be part of the development plan.
An other factor to remember is that we may have access to a competitor product which should help us in estimating production requirements once we have projected target sales.
Risks should be identified and quantified, preferably in financial terms. Risks should be identified at task level and preventive measures taken to reduce them.
Note that the topic of risk is covered in some detail in the Project Management Module of the ami course.
A major risk is always "will the product sell".
The question and its solution are intended to show that product development is a serious undertaking and should involve people in several departments working closely together.
The commercial life of products are diminishing as well as the time to market for new products.
A development proposal for the type of product we have considered would probably take about 1 month and the development itself, that is the time to market would be about one year. The commercial life of the product may be as little as 4 to 5 years.
It is likely that the proposal is put to senior management (The Board of Directors) in the form of a presentation. Staff from R&D would be expected to participate.