Interview “Personalised products present a clear competitive advantage”

The digital transformation of manufacturing – often called Industry 4.0 – continues apace. To what extent does this also apply to product development?

Reinhard Geissbauer: Business innovation and product cycles have dramatically accelerated in recent years, across almost all sectors. Any company that does not want to lag behind has to bring new products and services to market faster, more efficiently and above all with clear customer focus. Our study shows that using digital tools and processes for product development clearly leads to better results.

Fundamental process changes usually demand significant upfront investment…

Geissbauer: That is true, but significant investment is not the only critical factor. On average, leaders in digital transformation – we call them Digital Champions – certainly spend more on research and development. However, most of them still remain well below the expenditure of the 1,000 most research-intensive companies worldwide. If we factor in expected efficiency gains, faster product launches and general cost savings, there is a strong argument for digitising the product development process.

So, what are digital leaders doing better than the rest?

Geissbauer: As an example, our study shows that four out of ten businesses are already using data analytics and artificial intelligence for product development – but often in a rather fragmented way. Digital leaders stand out by using digital tools and capabilities not only more often, but also more consistently. This allows them to generate a deeper understanding of customer needs and develop personalised, individually adaptable products – giving them a clear competitive advantage.

Can you give us an example?

Geissbauer: When developing and refining a modular product range, it is crucial to have in-depth knowledge of your customers’ needs. Digital Champions are able to provide the exact products that their customers need, every time. They also keep the engineering aspect of customisation to a minimum and can therefore produce personalised products at a significantly reduced cost. For our study, we spoke to several businesses that are already using this strategy very successfully.

More data also brings greater cybersecurity risks. How are companies dealing with this issue?

Geissbauer: Our study shows that many of them are still shockingly careless: one third has not implemented any standardised security measures at all. Even digitally leading companies still have some way to go. This situation not only leads to security risks – it is also a missed opportunity in terms of costs. If businesses clearly clustered and prioritised their risks, for example, they could allocate their resources much more efficiently.