A research for a methodology to decide if a potential new service concerning aviation MRO fits the organization of Capgemini

Service-organization fit?

A research for a methodology to decide if a potential new service concerning aviation MRO fits the organization of Capgemini

ing. F.M. Hensen

Utrecht, August 2008

Service-organization fit?

A research for a methodology to decide if a potential new service concerning aviation MRO fits the organization of Capgemini

Author: ing. F.M. Hensen Utrecht, August 2008

Student number: 1661256 Rijksuniversiteit Groningen

Faculty of Economics and Business Business Development

Supervisors University:

dr. W.G. Biemans dr. J. Kratzer

Supervisor Capgemini Nederland B.V.

ing. A. Eindhoven

Preface

The thesis in front of you is written for the completion of the Master of Science in Business Administration at the Rijksuniversiteit Groningen. The thesis is written as closure for the main subject ‘Business Development’. The research in the organization of Capgemini contains a methodology for identifying potential new services which fit the organization.

This thesis serves two objects. First with this thesis the student is in de position to graduate.

Second, this thesis can be used by Capgemini advisors to ground their further investigation in a new service.

Readers who are especially interested in the theoretical framework of the thesis can find this information in chapter 3.

A special thanks goes out to my Capgemini supervisors Mr. A. Eindhoven, Mr. J. Goossens, and Mr. P. Zegger for their support and giving me the opportunity to write my final thesis at Capgemini. Besides, I would like to thank all the employees of Capgemini and the interviewees of KLM for their assistance and knowledge sharing during the research. Also, I would like to thank Capgemini and KLM for allowing me to publish my research.

Furthermore, I would like to thank my supervisors of the university Mr. W. Biemans and Mr.

J. Kratzer for their support and feedback during these last few months of my study.

A special thanks to my family and friends for their unconditional support during this thesis time.

ing. F.M. Hensen

Utrecht, August 2008

Summary

The author has done research in this thesis to project selection methods in the portfolio management for the organization Capgemini. Through literature review there is concluded that Capgemini handles with services and known when one is speaking of a ‘new’ service.

After that the critical success factors were described, because they had to take into account by the choice of a method and several project selection methods were discussed in the literature review. With the project selection method the organization can determine whether or not a potential new service fits the organization. This has resulted in the next main question:

“Which methodology can the department TTU use to determine whether or not a potential new service fits the organization of Capgemini?”

By means of the theoretical research in academic literature this main question has been answered and the most suitable scoring model has the following factors:

1. Strategic alignment and importance 2. Product and competitive advantage 3. Market attractiveness

4. Leverage core competencies 5. Technical feasibility 6. Financial reward

The TTU (Telecom, Travel, and Utilities) department of Capgemini is less familiar with the Aviation MRO-market (Maintenance, Repair, Overhaul) and therefore is looked for a potential new service in that market. By means of case-study in the Aviation MRO-market including interviews at KLM E&M this main question has been illustrated and an advice could be given whether or not the chosen potential new service fits Capgemini.

The service will be rated by a group of selected evaluators at each of the scaled factors and the confidence. The project attractiveness score is the weighted addition of the six factor scores, appropriately adjusted to make the value a percent out of 100.

The research of the MRO-market leads to six most important change drivers for the MRO-

market, namely globalization, shareholder value, antiquated installations, durable society,

ageing, and technology (mechatronica). From the change drivers potential new services have

been traced back and from that list one potential new service have been chosen to fill in the

scoring model, namely a ‘knowledge base’. The service ‘knowledge base’ passed through the

operation of the scoring model, which resulted that the new potential service ‘knowledge

base’ fits the organization Capgemini and needs more research to decide if the service is

worthy a full time competence center. In the next stage of the stage-gate model further

research will be done.

Table of contents

PREFACE... III SUMMARY ... IV

1 INTRODUCTION...1

1.1 B

^ACKGROUND

...1

1.2 C

^APGEMINI

...1

1.3 KLM ...2

1.4 R

ESEARCH OUTLINE

...3

2 PROJECT APPROACH ...4

2.1 P

ROBLEM DEFINITION

...4

2.1.1 Objective ...4

2.1.2 Main question ...4

2.1.3 Sub questions ...4

2.2 P

ROJECT ASSIGNMENT

...5

2.3 D

^EFINITIONS

...5

2.4 R

ESEARCH APPROACH

...5

3 THEORETICAL FRAMEWORK...7

3.1 P

RODUCT DEVELOPMENT OR

S

ERVICE DEVELOPMENT

...7

3.2 N

EWNESS OF THE SERVICE

...10

3.3 C

RITICAL SUCCESS FACTORS

...12

3.4 G

ATE OF PROJECT SELECTION METHOD

...18

3.5 P

ROJECT SELECTION METHOD

...20

4 METHODOLOGY...28

4.1 R

ESEARCH METHOD

...28

4.2 I

NTERVIEWS

...28

4.3 C

^RITERIA

...29

5 CASE MRO-MARKET...30

5.1 D

EFINITION OF THE

MRO-

MARKET

...30

5.2 A

VIATION IN THE

MRO-

^MARKET

...33

5.3 D

EVELOPMENTS AND TRENDS IN THE

MRO-

^MARKET

...34

5.3.1 KLM E&M ...37

5.4 T

HE FUTURE OF

MRO

IN THE

N

ETHERLANDS

...38

5.5 P

OTENTIAL NEW SERVICE

...40

6 THEORY IN PRACTICE...41

6.1 T

HE OPERATION OF THE

S

CORING MODEL

...41

6.2 S

CORING MODEL IN USE

...42

7 CONCLUSIONS AND RECOMMENDATIONS ...46

7.1 C

^ONCLUSIONS

...46

7.2 R

ECOMMENDATIONS

...47

7.3 D

ISCUSSION

...47

7.3.1 The strengths and weaknesses of the research ...47

7.3.2 Scientific contribution ...48

7.3.3 Practical contribution ...48

REFERENCES...49

APPENDIX 1 ORGANIZATION CHART ...53

APPENDIX 2 SCORING MODELS ...56

APPENDIX 3 INTERVIEW QUESTIONS ...67

APPENDIX 4 SCOREBOARD OF SEVEN INTERVIEWEES: (CONFIDENTIAL) ...70

APPENDIX 5 CHARACTERISTICS OF A WCM-COMPANY ...71

1 Introduction

This chapter outlines the background of the author and the relevance of this research. Besides, the utilized organizations Capgemini and KLM Engineering & Maintenance are described briefly in this thesis. It ends with a description of the research outline.

1.1 Background

The studies at the faculty Economics & Business at the University of Groningen, where Business Administration is part of, are completed with a thesis. The thesis is a combination of assignments which, depending on the course and content, are also referred to as a final project, thesis or final assignment (van der Meer e.a., 2006, pag. 4). The student combined the writing of her thesis with an internship at Capgemini. During this four months period, she worked at the following department of Capgemini: Telecom, Travel and Utilities (TTU).

Capgemini works with a reactive approach, because their customers come across business issues in their own organization(s) for which they turn to Capgemini. The disadvantage of the approach mentioned above is that when Capgemini eventually comes up with a solution for the business issue, they are not the only company the customer has approached for a solution.

Subsequently, Capgemini has to compete with other suppliers in order to get the assignment.

As a result, Capgemini wants to make use of a more proactive approach in order to solve more complicated business issues and to create a more meaningful relationship (exclusivity and intimacy) with the customer. These consequences, and the increase of their market, are the main objects of Capgemini’s more proactive approach in the future, considering that they are now still using a reactive approach. The introduction of the proactive approach starts by developing a clear methodology which makes it possible to decide whether Capgemini should develop itself in a certain market or not. Because Capgemini is less familiar with the Aviation MRO-market, research in this area is relevant to increase the market of Capgemini. In order to collect issues from the Aviation MRO-market and have input for the developed methodology, this research is conducted at KLM Engineering & Maintenance.

1.2 Capgemini

The student writes the thesis for Capgemini Nederland B.V. (Capgemini), which offers

Consulting-services, contributing to company transformation and economic performances of

customer organizations. Capgemini offers Technology-services such as design and integrate

technological solutions, innovations for development, and transform technical surroundings

for customers. Furthermore, Capgemini constructs Outsourcing of company processes, which

is one of their main activities (Capgemini, 2008). For extra information, appendix one

contains an organizational chart of Capgemini and the TTU department.

Four fundamental objects guide the operation of Capgemini (Capgemini, 2008):

• To use their expertise to the benefit of Capgemini clients and partners through an open, collaborative approach.

• To ensure sustainable and profitable long-term growth.

• To provide a return on investment to shareholders.

• To promote employee development.

i³ is the name of the business transformation program designed to support Capgemini 2010 strategy and to establish Capgemini as an industry shaper. It is the vehicle that Capgemini will use to deliver their mission of ‘Enabling Transformation’ and to achieve their vision of

‘Enabling Freedom’. i³ is about delivering profitable, sustainable growth for Capgemini by focusing on three strategic pillars (Talent.Capgemini, 2008):

• Building client Intimacy to drive top-line growth and long-term customer relationships

• Differentiating their propositions through relevant, targeted and leveraged Innovation

• Driving effectiveness, efficiency and global leverage through the Industrialization of our operations.

1.3 KLM

KLM is an international airline company that operates worldwide. KLM is the centre of the KLM Group. Other members of this group are KLM city hopper and transavia.com. KLM merged with Air France in 2004 in a business model which is unique within the aviation industry. Within the Air France-KLM holding company, both KLM and Air France operate as a network airline: via hubs, or transfer airports, they maintain a worldwide network of services to European and intercontinental destinations. KLM and Air France complete each other through the optimal alignment of their networks and through the coordination of their three core activities: passenger transport, cargo transport and aircraft maintenance.

KLM’s strategic goal is profitable and sustainable growth. Together with Air France, KLM

will achieve this through the further development of its three core activities in the most

attractive markets, through cooperation with SkyTeam and through further reductions in unit

costs (KLM, 2008).

KLM Engineering & Maintenance

KLM Engineering & Maintenance (KLM E&M) offers a broad portfolio of tailored products and services such as various Total Aircraft Care and supporting services like engineering, line maintenance, technical training and other tailor-made services, at the MRO-market (Maintenance, Repair, and Overhaul). Apart from its location at Schiphol, KLM E&M has operations at 50 airports worldwide. KLM E&M has permanent maintenance contracts with over 20 airlines, the largest of which is KLM (KLM, 2008). Further information, appendix one contains an organizational chart of KLM E&M.

1.4 Research outline

In this chapter it became clear what the background for writing this thesis is and which

organizations determine a share in this thesis. Chapter 2 follows with an outline of the project

approach, including among other things the research question. In order to answer the research

question a literature review is executed in chapter three, in order to get a better understanding

of the approach and elements in the research question. In chapter four the methodology of the

research and the interviewees are described. A clear view of the MRO field in the aviation

market is given in chapter five. To execute the research for Capgemini the methodology of the

theoretical framework of chapter three, is applied on an potential new service of the MRO-

market in chapter 6, including the output. A conclusion and recommendations are given in the

last chapter.

2 Project approach

In this chapter the outline for carrying out this research will be clarified. In order to give a complete definition of the problem and the object of the research, they will be illustrated first.

Second the project assignment is described and after that some important definitions are given. The model of research with the research approach are reproduced at the end.

2.1 Problem definition

Capgemini has not specified a clear methodology for selecting potential new services.

Furthermore, there is no clear view of the MRO field in the aviation market.

2.1.1 Objective

The objective of this research is to create a guidebook that helps Capgemini in determining whether a potential new service fits the organization. With the help of this guidebook an advice will be given to Capgemini whether they should invest in potential new services for the Aviation MRO-market.

2.1.2 Main question

Which methodology can the department TTU use to determine whether or not a potential new service fits the organization of Capgemini?

2.1.3 Sub questions

• When is a product a service?

• When can a service be defined as ‘new’?

• Contribute the factors in the project selection method to the success of the service?

• What kind of project selection methods are present in the theory to test whether or not a potential new service fits the organization?

• What are the change drivers/business issues of aviation in the Dutch MRO-market and KLM E&M?

• Does a potential new service concerning aviation in the MRO-market fit the

organization of Capgemini?

2.2 Project assignment

The formulation of the project assignment:

The author will select a method for identifying potential new services that fit the organization.

By project selecting methods from theories concerning portfolio management, an operational guidebook is developed. By doing a case study involving change drivers and business issues of aviation in the MRO-market and at KLM E&M, potential new services will be identified.

These will be used as input for the guidebook in other to check whether to invest in the development process of a potential new service or not.

2.3 Definitions

Definitions used in the formulation of the assignment are defined as follows:

• Aviation: Development and operation of an aircraft (Britannica, 2008).

• Engineering & Maintenance (E&M): The application of techniques, engineering skills, and effort, organized to ensure that the design and development of systems and equipment provide adequately for their effective and economical maintenance (The free dictionary, 2008).

• MRO-market: Maintenance, Repair and Overhaul market (Acronyms, The free dictionary, 2008).

• New service development (NSD): The development of service products which are new to the supplier (Johne, A., e.a., 1998, pag. 185).

• New product development (NPD): The development of tangible products which are new to the supplier (Johne, A., e.a., 1998, pag. 185).

2.4 Research approach

To find the most appropriate methodology for Capgemini, a theoretical research in academic

literature has been carried out. This methodology will be used to determine whether there is a

fit between a potential new service and the organization. The potential new services follow

from the research at KLM E&M. The case MRO-market consists of a brief description of the

market movement in (aviation) MRO and interviews at KLM E&M, with the purpose of

identifying potential new services which the KLM E&M business requires. An advice will be

given whether or not a potential new service for KLM E&M fits the organization. For

conceptualization, figure 1 represents the approach of the research on the next page.

Figure 1: Model of research

Case MRO-market

(Chapter 5) Theory

(Chapter 3)

Insight in market

Methodology for Capgemini Potential new

service

Advice about;

A potential new service that fits the organization Capgemini

(Chapter 6)

3 Theoretical framework

In the previous chapter it appears that service development and the methodology to test the fit between the new service and the organization are the main concepts of this research. In this chapter these elements are profoundly described on the basis of literature. First the difference between product development and service development is explained, so that it is clear about what has been talked and searched for during the research. To give an indication of the impact of the new service, the different types of ‘new’ are set out. Success factors are better to know by forehand than afterwards, so it is known what to take into account in the methodology.

This will be clear when the point of project selection method is indicated. The methodology for the fit between service and organization will conclude this chapter.

3.1 Product development or Service development

Johne and Storey (1998) mention that the words ‘new service development’ and ‘new product development’ are often used interchangeably, because it is a fast changing area of endeavour, this in spite of the different meaning of both concepts. That is why they introduce a more detailed definition of both concepts (Johne, A., e.a., 1998, pag. 185):

• ‘New service development’ (NSD) is the development of service products which are new to the supplier.

• ‘New product development’ (NPD) is the development of tangible products which are new to the supplier.

Ramaswamy (1996, pag. 12) tends to differentiate between product and service firms from a traditional view of the industry. Product industries are commonly understood to be those that produce physical products such as cars or television sets. Service firms are those which create

“soft” outputs such as a restaurant meal or an airline passage. This differentiation has sometimes resulted in a wrong view about both products and services. Therefore, a continuum from product to service attributes is needed. One end of this continuum is the tangible end with product-related attributes. The other end is the intangible end related to service attributes. This is the same continuum Cooper and Edgett (1999) use for the recognition of services. For a clear image see figure 2.

Johne and Storey (1998) define differences between products and services from the supplier’s point of view, and also from the buying point of view in three main headers instead of one:

• Intangibility; Service products are predominantly intangible. The service products are more like processes than things. Intangibility has important operational consequences:

e.g. intangible products are especially difficult to test in concept.

A difficulty arises from intangibility because services are processes and not physical entities. The services can easily be changed instead of physical products of processes.

Thus changes in to the service offering can be made quickly and easily by individual service workers without management agreement or appropriate organizational learning taking place. This way of making changes can be at the expense of the quality of customer service.

A further difficulty resulting from intangibility is that developments easily can be copied by competitors. And, because service developments are not patentable, copying is rarely preventable (Johne and Storey, 1998, pag. 187).

• Heterogeneity; Service products are often variable in quality, because service is commonly produced and simultaneously consumed. Since it is created and consumed at the staff-customer interface, the service experience probably varies each and every time. Both staff and customers play a part in the delivery of service. The degree of variation is probably to depend on the degree of standardisation of the service and the amount of technology which will apply at the customer interface. The customers of services risk buying a result and/or experience which they cannot judge completely by forehand of purchase. Operationally, this requires, for example, constant emphasis on training and practice by supplier staff (Johne and Storey, 1998, pag. 188).

• Simultaneity; Service products are typically produced and simultaneously consumed.

This means that most services are inherently perishable and for this reason stock cannot be held. Planning of capacity is critical in service suppliers. Demand can be vary greatly, yet needs to be met promptly or stands to be lost (Johne and Storey, 1998, pag. 188).

Figure 2: The Tangible-Intangible Spectrum

Original source: G.L. Shostack, “How to Design a Service,” European Journal of Marketing 16, 1

(1982): 49-63.

Typical is that the various services all possess the three main headers. Cowell (1988) shares this interpretation of the three headers, only names ‘simultaneity’ different, namely

‘perishability’. Besides that he has a fourth and fifth header:

• Inseparability; Services often can not be separated from the person of the seller. A consequence of this is that the creating or performing of the service may occur at the same time as full or partial consumption of it. Goods will be purchased, sold and consumed whereas services are sold and than produced and consumed. Inseparability of the realization and presentation of certain kinds of services applies particularly to some personal services. One result of inseparability is that the material and/or people who produce the service to consumers are highly visible. These people need to consider their attitude, behaviour, and appearance, because it influences the perception upon the consumer of the service. In service businesses the operational staffs have to fulfil ‘operational’ and ‘marketing’ role. Their feedback and suggestions therefore provide an important source of new ideas for development.

Besides they occupy another important role. Easingwood (1986) identified that while marketing is more likely to override operations on a service launch decision, operations are more likely to override marketing on a cancel decision because of their closeness to the customer and better understanding of which services will be more acceptable in the new product development process (Cowell, 1988, pag. 305).

• Ownership; Lack of ownership is a basic difference between service and a good. With a service a consumer can only have access to or make use of a facility. Payment is normal for the use of, access to or hire of items. With the sell of goods, barring restrictions imposed by, say, a hire purchase scheme, the buyer has full use of the product (Cowell, 1988, pag. 306).

Cooper and Edgett (1999) also identified four main characteristics which are particular to services: Intangibility, Inseparability, Heterogeneity, and Perishability. They are not very different from the ones Johne & Storey (1998) and Cowell (1988) mentioned actually a combination. Brentani (1991) formulates also a combination of characteristics to indicate the difference between goods and services: Intangibility, Inseparability, Variability, and Perishability. The characteristic ‘variability’ has the same meaning as ‘heterogeneity’ which is mentioned in the other literature. Brentani (1991) mentions also that the difference between goods and services are often a question of degree, (for example, services are more intangible dominant or more variable than their physical product counterparts) however, many established marketing concepts are relevant to both the goods and the services sector.

Through the literature mentioned above it is obvious that there is a difference between both

concepts NSD and NPD, but it is not clear when there is talked about a service, so the

interpretation of both concepts is sometimes the same. The author acknowledge the difference

between both concepts and will clearly define which of the concepts is meant in this research, but also takes into account the interchangeable use in her literature research.

All literature discussed above uses the characteristic ‘intangibility’ to explain the difference between goods and services. This characteristic will be mainly used to substantiate why in this thesis is spoken of a service instead of a product. Capgemini is an organization with consultancy, technology, and outsourcing. As you can see in figure 2 consultancy is an intangible product. Besides the technology Capgemini offers is ICT which is mainly customer maid, so not tangible by purchase. Also Outsourcing of ICT is also not tangible, so in this thesis is talked about a ‘service’ that will be offered by Capgemini.

3.2 Newness of the service

To focus on better ways to develop new services, it should be exactly clear what is meant by

‘new’. First, a development process is according to Cooper and Edgett (1999) seen as one to develop and manage projects which have an impact on the customer. Second, many people would argue that most new services are versions of existing services or copies of competitors’

products. On the other hand new-to-the-world services are rare in a service environment.

Cooper and Edgett (1999, pag. 11) note here that different types of ‘new’ projects have different types of development needs and risks, from both an internal as well as an external perspective. Cooper and Edgett (1999, pag. 11) distinguish six different types of ‘new’ in service innovations from new to the company, such as a new source of revenue, or it can be new to the marketplace, or it can be both at the same time:

1. New-to-the-world service: These are services that have never before been offered to the marketplace. They are the rarest and carry the highest level of risk.

2. New service line (also named New to the Company): This type of service is one that is new to the organization but not to the marketplace; therefore, the risk is still high because the service is a new experience for the company.

3. Addition to existing service line: A service that is new to the company but fits into the existing service lines is the most common type of ‘new’ service, and such additions usually present less risk than the two options above.

4. Improvements to existing services: This type of ‘new’ is really a replacement or an update of an existing service offering. These projects are typically low-risk and are designed primarily to modernize. Very often these are presented under the banner

‘new and improved’. Although these services are usually low-risk and produce little new revenue, they are needed to retain existing revenue streams. Unfortunately, many companies expend far too many resources in this category at the expense of other types of new services.

5. Repositionings: This is essentially a new market or customer segment for an existing

6. Cost reductions: These are basically modifications to services and are usually not visible to the customer. Still, they provide benefit to the company. Service changes like these are typically operations-related and cost-driven. Though market risk is low, these types of development projects use up a considerable amount of internal resources.

Cooper (2001, pag. 11) defines ‘newness’ in two senses;

• New to the company, in the sense that the firm has never made or sold this type of product before, but other firms might have.

• New to the market or "innovative"; the product is the first of its kind on the market.

With respect to these two senses Cooper (2001) identifies the same six different types of new products in a two-dimensional map. Griffin and Page (1996) outline also the same six different types of ‘new’ in service innovations, only illustrate a conveniently arranged figure framework, figure 3, which is derived from Ansoff’s (1957) original product/market matrix, arrays projects based on newness to the market and newness to the company. With this figure Griffin and Page outline the following statement; firms following more innovative strategies have a higher percentage of projects with higher levels of newness.

Figure 3: Project strategy typology (Griffin & Page, 1996)

Only Cooper (2001, pag. 14) lines out that the impact of product innovativeness on new

product success is not nearly as straightforward as expected; failure rates do not necessarily

steadily increase (or steadily decrease) with increasing innovativeness. That is why further in

this chapter critical success factors are discussed. By the chosen potential new service for in

the project selection method the newness will be indicated.

3.3 Critical success factors

With critical success factors it is possible to indicate which points have to be in order to have a higher possibility to make a success out of your service. Only, “Success at the company or business level may differ from success at the project level” (Cooper and Kleinschmidt, 2007, pag. 55). Through this pronouncement it can be obtained that there are two levels on which success factors can be based. Distinction between the success factors of the levels mentioned by Cooper and Kleinschmidt (2007) have to be made, because research that has been done at project level is not able to identify those company practices that decide success. Cooper and Kleinschmidt (2007, pag. 2) mention three reasons:

1. First, success at the company or business-unit level may differ from success at the project level.

2. Next, often important practices are not readily apparent or measurable at the product level. Consequently, they are missed in such success/failure studies.

3. A more subtle and final reason for omissions is the way the research is designed.

When pairs of successes and failures are selected from each firm, company characteristics that may have a strong impact on success will be common to both projects. And so these company characteristics do not emerge in an analysis of factors that distinguish the successes.

In a success/failure research of 1994 by Montoya-Weiss and Calantone many product success factors in figure 4 were uncovered which at this moment are seen as natural by driving success. Further research of Cooper and Kleinschmidt (2007) uncovered nine factors that distinguish the better performing businesses, the first four factors in a very strong way. The factors of Cooper and Kleinschmidt (2007) have been laid out in figure 5 further in this paragraph.

A remark regarding the first factor is that with a high-quality of new product process it is meant that too many projects directly move from the idea

stage into the development with little or no assessment. The results of such a “ready, fire, aim” approach are usually disastrous. With the success factor they want that you do up-front homework, like preliminary market assessment and preliminary technical assessment. After

Strategic Factors:

Product advantage Marketing synergy

Technological Manufacturing synergy Availability of resources

Strategy of the new product Development Process Factors:

Proficiency of technological activities Proficiency of marketing activities

Proficiency of up-front (homework) activities Top management support

Speed to market

Proficiency of financial/business analysis Market Environment Factors:

Market potential/size Market competitiveness External environment Organizational Factors:

Internal/external relations (of team) How team was organized

Figure 4: Factors that drive new product success

at the project level (Montoya-Weiss and

Calantone, 1994)

that a more detailed market study, technical assessment, and a financial and business analysis have to be carried out. This first factor of Cooper and Kleinschmidt (2007) is also mentioned in Cooper (1997) in a list of some success factors which occur in the front end of the product development process and names that a lack of homework is the rule in product development, with serious deficiencies occurring in these early stages. So build a detailed homework stage (or two) into your new product process based on facts. Besides that Cooper (1997, pag. 1) mentioned the factors:

• Successful businesses emphasize the voice of the customer and a strong market orientation, especially in the early stages. A lack of market analysis is the number one reason for new product failures, while new product projects which feature high quality market analysis and research are blessed with more than double the success rates and seventy per cent higher market shares.

• That successful business builds in tough go/kill decision points in the process, where projects really do get killed.

In Cooper and Kleinschmidt (2007) the Performance Diamond is mentioned, what is an integral and executive framework to help management lay focus on what really is important for the success of NPD. The factors that are mentioned in the Performance Diamond are included in figure 5 further in this paragraph.

Research of Brentani (1991) in success factors of developing new business services took place with help of 17 new service factors. These service factors were classified as follows:

new service development proficiency, project synergy, market characteristics, and nature of the new service offering. With these new service factors Brentani (1991) tested what the determinants are of success in new services. Companies need to be proficient in how to develop new services, through the analysis of successful and unsuccessful new services.

Brentani (1991, pag. 55) indicated that a formal and planned approach of a new service development leads to better performance.

Aside from using a detailed new service development process, success in new service

development depends on getting the necessary commitment and interaction from management

and from the several functional specialties within the firm. With project synergy it seems that

new service offerings which feature a strong fit with existing services and which benefit from

the firm’s operating strengths and facilities, have a greater chance of success. Besides for the

market characteristics, companies need a strong market orientation while developing new

services to be able to respond to market needs, because it is superior to the sales and the

competitive performance dimension. The nature of the new service offering needs uniqueness

and superiority, since it is the firm’s reputation, rather than the service itself, which often

determines buying decisions. Since a superior image in the market can only be developed in

time, some companies focus their new service development efforts on this long term objective

of gaining a reputation for innovativeness and quality as a route to new service development

success. The success factors of Brentani (1991) are also noted in figure 5. Brentani (2001) mainly outlines the same success factors as in 1991, but also divides companies into highly innovative developments versus incremental new business services. Just like Cooper (2001, pag. 14) indicates with his pronouncement that failure rates do not necessarily steadily increase (or steadily decrease) with increasing innovativeness. The success factors of Brentani (2001) are mentioned here and not in figure 5, because the different divisions are preserved and no other literature has got the divisions of Brentani (2001). Brentani (2001, pag. 183) starts with some global success factors which have a strong performance effect in both types of development scenarios. These include:

• Basing the development of new services on an intimate knowledge of customer needs, problems and operating systems;

• Having a trained and motivated front line of experts who interact with clients during service introduction and delivery, and who are actively involved in the new service development process; and

• Implementing an NSD process that incorporates a formal and well-planned new product testing and launch phase.

The success factors for incremental new services that appear to be distinctively connected to positive outcomes include:

• That projects have a seamless fit with the firms’ strategy as well as with its specialized experiences, resources and reputation;

• A systematic approach at the front end and design stage of the NSD process-starting with up-front market studies and idea screening, to mapping out the planned new service, to testing it with customers prior to launch; and

• Ensuring that efforts to distinguish the new service from past/competitive offerings do not result in higher costs and/or buyer perceptions of increased service complexity.

For discontinuous new service innovations the distinctive features in the success equation include, first:

• An open and supportive internal innovation environment within the firm, where involvement in new product development is encouraged and where senior managers play an important entrepreneurial role.

Finally, two features that are also differentially linked to success in the high innovativeness NSD scenario are:

• Using tangible evidence to help customers visualize and assess this new and very different service offering; and

• Ensuring that there is adequate market potential to justify the costs and risks associated with the innovation effort.

In sum, for most business service firms’ success in developing both highly innovative and

incremental new services is essential for the long-term performance. Because the two

divisions of new products make up substantially different development scenarios, it is important that managers understand the several keys for reaching success in each type of venture (Brentani, 2001). Noticeable is that Cooper and Kleinschmidt (2007) make the distinction between company or business level and product level success factors, however, they do not make the distinction between companies that develop highly innovative versus incremental new business services like Brentani (2001). They only make a pronouncement of which it could be deduced. Alam (2006) describes the same success factor as Brentani (2001) has by the global success factors, namely customer interaction, only uses it to remove the fussiness from the fuzzy front-end of service innovations. The success factors of all the literature describes the high-quality of new product process and almost all the literature of success factors mentions that too many projects directly move from the idea stage into development with little or no assessment. First, a new service development process that is indicated with the method to develop helps with the success of a new service. Second, the method to develop helps by raising the gate to move a new service directly from the idea stage into development, so the necessary assessment will be done.

Besides the pronouncement of Cooper (2001) that increasing the innovativeness does not have a direct relation with the failure rates, Cooper (2001) mentioned fifteen critical success factors admitted in figure 5, which are almost the same, so like a collection of the success factors used for the development of a NewProd System in Cooper (1992), and the success factors mentioned in Cooper and Edgett (1999), Cooper (2000). In figure 5 the success factors of several writers are enumerated and show similarity. The success factors are used for optimal preparation of the service development, so the most critical success factors determine part of the project selection method if possible (Cooper & Edgett, 2006). Closely related to what causes success and failure is the question of how firms measure new product success. Because the project selection method will take place in the new service development process, which will be pointed out further in this chapter, the success measuring of the service is not yet possible.

To develop a new successful service there is need of a high-quality new product process (included in paragraph 3.4) with gates to provided early movement from the idea stage to the development stage (for gate 1 see the project selection method in paragraph 3.5). In the project selection method a potential new service has to be tested to factors which also contribute to the success of the service. Naturally, not all success factors described above and mentioned in figure 5 correspond with the factors found in the project selection method.

Therefore, in order to make a clear arrangement, figure 6 provides an overview of which success factors correspond with the factors of the project selection method. The most success factors are mentioned at the leverages core competence area of the project selection method.

Cooper & Kleinschmidt, 2007 Performance Diamond (Cooper, 1996) Brentani, 1991 Cooper, 2001 (Cooper, 1992, Cooper & Edgett, 1999, Cooper, 2000)

Nine factors Four factors Four factors Fifteen factors

1. A high-quality new product process Climate, culture, teams & leadership Project synergy

The number one success factor is a unique superior product: a differentiated product that delivers unique benefits and superior value to the customer.

2.

A defined new product strategy for the business unit

Resources: Commitment & Portfolio

management Market characteristics

A strong market orientation − a market−driven and customer−focused new product process− is critical to success.

3. Adequate resources of people and money

Product innovation & Technology strategy for the business

Classified as new service development proficiency

Look to the world product: An international orientation in product design, development, and target marketing provides the edge in product innovation.

4. R&D spending Idea-to-launch system: Stage-gate

Nature of the new service offering

More predevelopment work − the homework − must be done before product development gets under way.

5. High-quality new product project teams

Sharp and early product and project definition is one of the key differences between winning and losing at new products.

6.

Senior management committed to, and

involved in, new products

A well−conceived, properly executed launch is central to new product success. And a solid marketing plan is at the heart of the launch.

7. An innovative climate and culture The right organizational structure, design, and climate are key factors in success.

8. The use of cross-functional project teams

Top management support doesn't guarantee success, but it sure helps. But many senior managers get it wrong.

9.

Senior management accountability for new

product results Leveraging core competencies is vital to success − "step−out" projects tend to fail.

10.

Products aimed at attractive markets do better: market attractiveness Is a key project−selection criterion.

11.

Successful businesses build tough Go/Kill decision points into their new product process, where projects really do get killed: better focus is the result.

12. New product success is controllable: More emphasis is needed on completeness, consistency, and

quality of execution of key tasks from beginning to end of project.

13. The resources must be in place − there is no free lunch in product innovation.

14. Speed is everything, but not at the expense of quality of execution.

15.

Companies that follow a multistage, disciplined new product process − a Stage Gate™ process − fare much better.

Figure 5: Success factors from several literature.

17 Figure 6: Overview of success factors corresponding with the factors of the project selection method

Factors of the project selection method Success

factors

1. Strategic alignment &

importance

2. Product & Competitive advantage

3. Market attractiveness 4. Leverages core competencies 5. Technical feasibility 6. Financial reward vs.

risk 1. A defined new product strategy

for the business unit (Cooper & Kleinschmidt, 2007)

Successful businesses emphasize the voice of the customer (Cooper, 1997)

A strong market orientation (Cooper, 1997)

An innovative climate and culture (Cooper & Kleinschmidt, 2007)

Product innovation &

Technology strategy for the business

(Cooper, 1996)

To justify the costs and risks associated with the innovation effort (Brentani, 2001) 2. That projects have a seamless

fit with the firms’ strategy as well as with its specialized experiences, resources and reputation (Brentani, 2001)

Basing the development of new services on an intimate knowledge of customer needs, problems and operating systems

(Brentani, 2001)

Ensuring that there is adequate market potential (Brentani, 2001)

Adequate resources of people and money (Cooper & Kleinschmidt, 2007)

3. Having a trained and motivated

front line of experts who interact with clients during service introduction and delivery, and who are actively involved in the new service development process (Brentani, 2001)

Market characteristics (Brentani, 1991)

Climate, culture, teams & leadership (Cooper, 1996)

4. Customer−focused new product

process (Cooper, 2001)

A market−driven (Cooper, 2001)

Resources: Commitment & Portfolio management (Cooper, 1996)

5. The number one success factor is a

unique superior product: a differentiated product that delivers unique benefits and superior value to the customer.

(Cooper, 2001)

Products aimed at attractive markets do better: market attractiveness. Is a key project−selection criterion (Cooper, 2001)

Project synergy (Brentani, 1991)

6. The right organizational structure, design, and

climate are key factors in success.

(Cooper, 2001)

7. Leveraging core competencies is vital to

success − "step−out" projects tend to fail.

(Cooper, 2001)

8. The resources must be in place − there is no

free lunch in product innovation.

(Cooper, 2001)

3.4 Gate of project selection method

As mentioned in the success factors, companies that follow a multistage for disciplined new product process, like with a Stage Gate model, function much better. This is the reason why the project selection method to decide if the service fits the organization, is admitted in a Stage Gate model. But what is a Stage Gate model exactly? A Stage Gate is a conceptual and operational model for developing a new product or service and/or moving a project from an idea to launch on the market. It is a blueprint for managing the innovation process to improve effectiveness and efficiency (Cooper, 1990, 2000, 2001; Cooper & Edgett, 1999, pag. 76).

Stage Gate approach breaks the innovation process into a predetermined set of stages, with each one consisting of a set of prescribed, cross-functional and parallel activities, see figure 7.

At the entrance of each stage is a gate, which serves as the quality control and Go/Kill check point in the process (Cooper, 2000, 2001; Cooper & Edgett, 1999).

Figure 7: an overview of a Stage-gate system (Cooper, 1990, 2000, 2001; Cooper & Edgett, 1999)

In the Stages the work is performed. At the Gates this work is checked. The Gates are actual resource allocation decision points (Cooper e.a., 2001). At these points the decisions are made to let the project through to the next phase (=Go), or the project will be killed (=Kill) or the project gets a Go-decision but will stand on hold because there are not enough resources (=Hold) or the work in the Stage must be adapted (=Recycle) (Cooper, 1990, 2001). In an ideal new product development process, management must identify potential winners (=Value maximalization) rapidly in the process and the resource allocation should be tuned to those

Gate 1

Stage

1

Gate

2

Stage

2 Gate

3 Stage

3

Gate

Stage

4

4

Gate

Stage

5

$

5

Idea

Initial Screen

Preliminary Assessment

Second

Screen Decision on

Business Case

Development

Post- Development Review Testing &

Validation Pre-commer-

cialization Business Analysis Full

production &

market launch Post-

implemen- tation review

Business

Case

projects. Making mistakes would be restricted to a minimum. The same applies to the wrong allocation of resources. The projects would show alignment with the strategy of the organization. This way the output should be optimum (Cooper, 2001). Cooper (1990, 2001) distinguishes seven aims, which must be reached to get a successful product development process:

Goal 1: Quality of execution;

Goal 2: Sharper focus, better prioritization;

Goal 3: Fast-Paced parallel processing;

Goal 4: A true cross-functional team approach;

Goal 5: A strong market orientation with the voice of the customer builds in;

Goal 6: Better homework up-front;

Goal 7: Products with competitive advantage.

Figure 8: The First Few Stages in the Stage−gate Process (Cooper, 2001)

Essential for a new product or project to succeed is goal 6, what are the stages and gates up to and including gate 3, which are laid out in the flow model in figure 8, the so-called fuzzy front end (Alam, 2006; Cooper, 2001). Briefly said, the organization in the fuzzy front-end must couple the project in detail to the complete strategy of the organization (Wheelwright &

Clark, 1992). These early stages are critical because they lay down the foundations upon

which the overall new service development project is built. Therefore, a growing body of

research suggests that a firm shall proactively manage and optimize the fuzzy front-end to

boost the chances of developing successful innovations (Alam, 2006, pag. 470). The work in

the fuzzy front-end, the upfront homework (Cooper, 2001), is relatively cheap in comparison

to the expensive development phase (stage 3) and the stages afterwards. But organizations conduct this work frequently badly or even skip the phases, often with dramatic consequences for the success of the new product or project (Alam, 2006; Cooper & Kleinschmidt, 2007;

Cooper, 1990, 2001; Cooper e.a., 2004). The Research & Development activities (=technical part) are often carried out well, but in general they often pay less time on the marketing activities (Arleth & Cooper, 2001).

The project selection method, which is placed central in this research, takes place in Gate 1 (see the blue arrow in figure 7). The sooner someone finds out the service is time worthy and fits the organization the better. Gate 1 is a “gentle screen” and amounts to subjecting the project to a handful of key must-meet and should-meet criteria. Combined, these criteria often concern strategic alignment, project feasibility, magnitude of opportunity and market attractiveness, competitive advantage, synergy with the business’s resources, and fit company policies. Typical is that mostly financial criteria are not part of this first screen. A checklist for the must-meet criteria and a scoring model (weighted rating scales) for the should-meet criteria can be used to help to focus on the discussion and to rank projects in this early screen (Cooper & Edgett, 1999). How the project selection method will look like and which criteria’s are part of it is described in the next paragraph.

3.5 Project selection method

For a project selection method the literature of portfolio management has been consulted. To gain the objects of optimum performance for the portfolio management, a number of methods have been developed, which must realize this. Cooper e.a. (2001a, 2001b) distinguishes the following methods:

• Financial Methods;

• Strategic Methods;

• Scoring Models;

• Bubble Diagrams;

• Checklists.

Some methods are more popular than others, like financial methods which are often used by organizations, but show the worst results (Cooper, 2001; Cooper & Edgett, 2006). Cooper e.a.

(1998, 2001a, 2006) show, in the figure 9, in what way the first four methods perform on six metrics for 205 businesses using each of these four methods as their dominant portfolio tool.

Because those methods are dominant in plenty businesses, conclusions about performance

strengths and weaknesses could be drawn. The 205 businesses in the survey sample of

Cooper, e.a. (1998) cover a wide variety of industries, with the chemicals and advanced

materials industry representing the largest group. Almost half the businesses in the sample

have annual revenues in the $100 million to $1 billion range, with 37.9 percent exceeding $1 billion annual revenue.

Performance Metrics

Strategic Methods Financial Methods Scoring Models Bubble Diagrams Projects are aligned

with business objectives

4,08 D 3,76 U 3,95 4,11 D

Portfolio contains very high value projects

3,77 3,37 U 3,82 D 3,70

Spending reflects the

business strategy 3,72 D 3,50 3,59 3,00 U

Projects are done on

time, no gridlock 3,22 D 2,79 U 3,13 2,90

Portfolio has good

balance of projects 3,08 2,80 U 3,20 D 3,20 D

Portfolio has the right number of projects

2,93 D 2,50 2,70 2,25

Figure 9: Strengths and weaknesses for each portfolio method (Cooper e.a., 1998, 2001a, 2006) Notes: Ratings are 1–5 mean scores for each method when used as dominant portfolio method. Here 1

= poor and 5 = excellent.

D= Best method on each performance criterion U= Worst method on each performance criterion

Concluding, there is no dominant method present that meets all criteria. Cooper e.a. (2001a) conclude that an organization must use a hybrid method. Other conclusions are: (1) use strategic methods to manage the portfolio, (2) do not rely on financial methods too much, (3) see scoring models as an effective tool to rank order projects for selecting the right projects, (4) bubble diagrams must be a component of the entire portfolio methods (Cooper e.a., 2001a, 2001b), (5) a formal portfolio management method works and leads to a better performance (Cáñez & Garfias, 2006).

Scoring models are categorized as the general category ‘benefit measurement techniques’. It requires a well-informed management group to assess the project at a variety of characteristics. Usually such a method relies less on conventional economic data, such as project sales, profit margins and costs. Instead it relies more on subjective assessments of strategic variables such as fit with corporate objectives, competitive advantage, and market attractiveness (Cooper e.a., 2001a, pag. 2). Benefit measurement techniques recognize the lack of concrete financial data at earlier stages of the project and the fact that financial analyses are likely to yield unreliable results. So, scoring models rely primarily on subjective inputs of characteristics that are more likely to be known. These techniques are most useful at the early points in a project, for example, at the initial idea screen (Cooper e.a., 2001a).

Because a scoring model is a ‘benefit measurement technique’ and contains the quality of that

technique which was just mentioned. The scoring model relies on subjective assessments of strategic variables which are more known in the early points of a project and they help to make the decision if there is a fit. This method is used as a project selection method in this research.

In a scoring model system, a list of criteria has been developed to rate projects. These criteria are thought of or known to discriminate between high-profit, high-success-rate projects and poor projects. Projects are rated on each criterion, typically on 1-5 or 0-10 scales with anchor phrases. Next, these rating scores are often multiplied by weightings and summed across all criteria to yield attractive scores for each project (Cooper e.a., 2001a, pag. 17). For conceptualization of the scoring models, which are described beneath, the figures are shown in appendix two. Through a research of Cooper e.a. (2001a) different excellent scoring models of firms were seen. These are:

• Celanese scoring model (Cooper e.a., 2001a; Cooper e.a., 2001b) is to develop and commercialize new products that are outside the scope of the traditional business units, mainly for major technology projects. The scoring portfolio model comprises a list of nineteen questions in five categories. Simple addition of the items within each factor yields the five factor scores. After this the five factor scores are added together in a weighted fashion to yield an overall score for the project, namely the program attractiveness score. The program attractiveness score is one input into the Go/Kill decision at each gate: A score of 50 percent is the boundary between a successful and a none successful service.

• DuPont scoring model is based on criteria that seem to discriminate between excellent and poor new product projects, mainly for new product selection in the own respective industry. The seven criteria are; strategy alignment, value, competitive advantage, market attractiveness, fit to existing supply chain, time to break-even, and NPV (Net Present Value) which are tailored more on traditional product development.

• Not every firm uses a long list of screening criteria. Because so many projects must be reviewed at the same time and every quarter, the aim is to keep the criteria and scoring system as simple as possible. EXFO Engineering has boiled the scoring criteria down to these major questions for new product selection in the own industry:

- Does the project fit the company’s strategy? How well?

- What is the market potential? How large is the market?

- Are the financial estimates positive?

- Do we have the R&D know-how? Can we do the project?

And to make a simple financial index that avoids the complexities of NPV, EXFO uses: Financial index = S x P cs / [D x (1-P ts)]

Where S = expected annual sales for the product ($000) D = development costs ($000)

P cs= probability of commercial success P ts= probability of technical success The minimum cut off for this index is 8.0.

• The Royal Bank of Canada (RBC) begins with voting with a sorting technique. The facilitator requests that each attendee selects his or her top and bottom 15 projects out of the 100 projects. The results are displayed. After this point anyone is allowed to lobby for any project in the middle group. Note that the very positive and very negative projects are not being discussed because there was general concurrence on these. Only the uncertain ones are debated. Next, the facilitator calls for a scoring vote (between 1 and 9) for each project on each two major factors, each of which contains three criteria:

Factor 1: project importance, consisting of - strategic importance

- magnitude of impact on the bank - economic benefits to the bank Factor 2: ease of doing, consisting of

- cost of doing (negative scale)

- complexity of project (negative scale) - resource availability

• The composite, best practices scoring model (Cooper e.a. 2001a, pag. 23; Cooper &

Edgett, 2006, pag. 5) is a generic scoring system developed for rating and ranking new product projects. There are six major factors, and each factor has a number of sub items:

1. Strategic alignment and importance: Is the project aligned with strategy, and is it strategically important?

2. Product and competitive advantage: Does the product offer unique customer benefits? Meets customer needs better than competitors? Provides good value for money?

3. Market attractiveness: Is the target market an attractive one-size, growth, margins, competition?

4. Leverage core competencies: Does the project build on strengths, experiences, and competences in marketing, technology, and operations?

5. Technical feasibility: What is the likelihood of technical feasibility-size of

gap? Complexity? Uncertainty?

6. Financial reward: Can this project make money? How sure are we? Is it worth the risk?

The boundary to decide if a service might be successful or not is 60 out of 100 points with the six factors scoring models (Cooper e.a., 2001a; Cooper & Edgett, 2006). This is of another height than the five factors scoring models (Cooper e.a. 2001a, 2001b). An explanation of this different boundary height could be the number of factors. Another score card that is discussed has also got a different boundary of at least 70 points out of 120 points perhaps to be a successful service which also has a connection with the number of factors. Merrifield (1978) has an expanded constraint analysis and score card for comparing program opportunities.

Twelve factors rated from 0 to 10, are more of less the same categories Cooper e.a. (2001a, 2001b) and Cooper & Edgett (2006) have in their score cards. The only difference is that Merrifield (1978) makes a distinction in the factors between business attractiveness which contains 60 points and company strengths for 60 points. The distinction Merrifield (1978) makes is not of additive value in comparison with the score cards of Cooper e.a. (2001a, 2001b) and Cooper & Edgett (2006), because Merrifield (1978) judges the total score of all the factors together.

O’Brien & Fadem (1999) and Belliveau e.a. (2002) name evaluation criteria which in total can be seen as a project selection method like the scoring models, because the new business evaluation process provides a bridge between the generation of ideas and the development of new businesses. It is a disciplined, converging process to achieve value in the form of new business ventures. The process has gates to reduce uncertainty and force go/kill decisions at each step. The method is sufficiently flexible that changes in the marketplace or developments in technology can result in evaluation efforts are being accelerated, scaled back, or put on hold (O’Brien & Fadem, 1999). The evaluation criteria have a DuPont competence factor, which indicate on similarity with some criteria of the DuPont scoring model. The evaluation criteria contains the same criteria as the DuPont scoring model accept for strategy alignment.

Also the evaluation criteria of Belliveau e.a. (2002) do not have strategy alignment as a factor.

They do have technology as a factor just like the scoring models. The classification of evaluation criteria contains (+) and (-) what indicates attractive or unattractive indication as answer to the criteria. However it is not indicated how many (+) or (-) are needed to know if the opportunity is attractive or unattractive.

Another project selection method is a culling process when you think about the gating process

according to Cooper (2001). He describes an approach that is to subject projects initially to

simple, easy-to-ask questions; so the list of projects is pared down to a more manageable

subset, which is next subjected to more thorough evaluation. The first part of each gate, the

initial culling questions, is a simple quality check if the deliverables are in place and that the underlying activities of the deliverables have been executed in a quality fashion: the deliverables check. Followed by a set of must-meet questions which determine whether the project meets minimum standards in terms of strategic alignment, magnitude of the opportunity, technical feasibility, and so on. These questions do not give a green light, they are designed to weed out more obvious loser and misfit projects. The must-meet criteria are applied in a relatively gentle fashion at Gate 1, but with increasing rigor at successive gates 2 and 3 (Cooper, 2001).

Finally, there is one project selection method left which actually can be used in each gate of the stage-gate system, named NewProd. Project evaluation and diagnosis continues to be an area where many organizations are insufficient. Yet it is central to the profitability of a firm’s new product efforts. The NewProd system is one software-based tool that can assist in this process. By bringing together a cross-functional team of evaluators with different points of view, by providing an agenda of proven discriminating questions for the team and by displaying the results for discussion in a visual and graphic format, NewProd facilitates this project evaluation and analysis. By answering the questions, two answers per question are sought: a rating and a confidence in one’s rating. This confidence feature enables an evaluator to give an opinion, but then indicate, for example, that his opinion was a guess for the main part. The direct result is a heightened understanding of project strengths and weaknesses and more insight risks, uncertainties and critical areas of ignorance. NewProd brings key inputs to Go/Kill decisions, resulting in improved resource allocation and focus, acceleration of good projects and avoidance of poor ones. Perhaps most important, NewProd enables team building, it supports the members of the project team to develop a common vision and appropriate direction for their project (Cooper, 1992, pag. 125).

The choice of a method will be made by the drivers of success in the method, because of the pronouncement made by Cooper & Edgett (2006, pag. 6), namely “The proponents of the scorecard approach argues that many qualitative factors are known drivers of success in NPD” and the usability of the method in practice.

The scoring models that are outlined by Cooper (2001a) contain a composite best practices criteria scorecard. In comparison with the other scoring models, this is the best score card of all, because:

• The NewProd system of Cooper (1992) is not the method for this research, because in

general it is able for all gates of the stage-gate system which makes the method too

complex. Also the organization is not ready for a software-based tool, because the

organization is not yet working with such methods. The organization can start by