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Innovation at telecom and high tech firms being jeopardized, Accenture study finds

Seven out of 10 telecommunications carriers, high tech companies and media firms stopped new product development pr...


February 17, 2009  


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Seven out of 10 telecommunications carriers, high tech companies and media firms stopped new product development projects last year due to budget over-runs, rising costs and a shortage of expertise, according to findings of an Accenture www.accenture.com  study released today at the GSMA Mobile World Congress in Barcelona, Spain.

 

Accenture queried more than 270 senior executives involved with product development at major companies in Europe and North America to find out if their pace of development has slowed, despite the need for these companies to introduce new, innovative products and services in an increasingly competitive market.

 

The survey found that:

 

* More than two-thirds (70%) of the companies stopped developing at least some services in the past year.

 

* More than half (58%) said the primary reason for discontinuing services was budget over-runs during new product development.

 

* Nearly one-third (30%) of companies said they were unable to attract the right level of in-house expertise for new product innovation.

 

“Carriers, software companies, high-tech firms, media enterprises and entertainment conglomerates can find themselves collaborating or teaming one day and competing against each other the next,” said Angelo Morelli, senior executive, new product development and innovation, Accenture’s Communications industry group.

 

 “The question is whether companies have the business, technology and operations capabilities in place to innovate quickly and cost-effectively. Unfortunately, although innovation is absolutely the key to profitable growth, many companies scale back on product development when money is tight because their development process might not be completely efficient.”

 

The main contributor to increased costs, according to the survey, is project delays that translate into additional expense. In fact, 42% of companies surveyed reported an overly slow pace as they move a product from idea to prototype to launch.