Insights into how digital technologies are impacting the time to demo in high-tech industries are firm impacts and process impacts. Firm impact refers to how applications of digital technologies impact on the business activities of the firm, and process impacts are limited to impacts on the product development process. Insights into how the sales cycle is shortened by the application of digital technologies are examined through the prism of artificial intelligence and extended realities. Further information on these insights can be found in the brief below.
Product Demo Insights
- Digital technologies have impacted the product development cycle for high-tech firms by changing the type of technology used in product development from the norm of physical science and invention to software driven technology, the teams required to operate the new technology, the introduction of digital platforms to support the introduction of software driven product development, and the tool mix used in product development.
- Digital technologies have also introduced changes to methodologies used in product development as well as processes that enhance a fully integrated product life management cycle, agile development principles, and partner co-creation that occurs in real-time.
- The National Institute of Standards and Technology reports that for US firms, higher productivity ranks at number four for firms with growth over 10% and at number one for firms with moderate growth between 4 and 10% and for firms with no growth on the list of top five technology priorities.
- Reduced time to market is also a top five technology priority for firms with low to no growth, ranking at number two. The top operational challenge for manufacturers is centered around improving internal processes for production. It was also the top concern for the vice president, director, and manager leadership positions. Enhanced production flexibility and reduced time to market placed eleventh and twelfth on a list of eighteen technology investment priorities.
- Time reduction targets for the product development life cycle is absent for 45% of firms, targeted at 20% or more for 12 % of firms, 16-20% by 9% of firms, 11-15% by 11% of firms, 6-10% by 16% of firms, and 1-5% by 8% of firms.
- Twenty-nine percent of firms that have successfully deployed digital technology to the product development process have earned over 30% of their revenues from new products within two years of market deployment, and 14% gain 30% of their annual revenue from wholly digital products and services.
- Although companies that have introduced digital technologies into the product development process have seen revenue and market gains, PWC cautions that companies need to address the risk to cybersecurity inherent in data intensive development processes. The Consultancy notes that 71% of companies are not in possession of a matured mitigation approach for cybersecurity.
Impact on Product Development
- PWC predicts that digital product development will reduce the time to market by 17%, production costs by 13%, and increase efficiency by 19%.
- Expenditure improvements from digital technologies in product development is expected to benefit overall production costs to the tune of 13%, in addition to reductions in R&D expenses.
- PWC looked at the top 10% of companies leading in the application of digital technologies to the product development process and noted that those companies can expect a 28% reduction in the time-to-market and 20% reduction in operations and productions costs in the next five years.
- For companies that are in the nascent stages of applying digital technologies to the production process, the 26% of companies at the bottom of the survey, the reduction in time-to-market stood at 6%, and operations and production costs stood at 9%.
- The tools of digital technology impact product development by aiding and accelerating the process. Among the tools used are algorithms and bots that determine customer desires by scanning social media, crowd funding platforms, forums and blogs, 3D printing to assist with prototyping, simulations for product testing before demo production, and augmented reality and virtual reality that is used to test products in the very early stages.
- In a PWC survey conducted in 2019, 41% of firms benefited from the deployments of data analytics and AI to design, validation, and process optimization in the product development cycle.
- Among the tools in use by companies are co-creation (64%), process simulation (50%), product portfolio management (52%), data analytics and AI (41%), digital prototyping (51%), social listening (41%), agile development (34%), digital twin (33%), and product life cycle management (29%).
- Usage of these tools are expected to increase in the next three years by 12% for co-creation, 24% for process simulation, 21% for product portfolio management, 30% for data analytics and AI, 16% for digital prototyping, 26% for social listening, 25% for agile development, 25% for digital twins, and 23% for product life cycle management.
- Thus, far, data, analytics, and AI is not being used by 58% of firms, partly used by 36%, and comprehensively used by 5%. One percent of firms preferred not to disclose their usage of data, analytics, and AI.
- Data is used for quality and process optimization in production by 100% of the advanced adopters of digital technologies in product development, and 75% of the nascent adopters. In terms of reducing expenses, 68% of advanced adopters, and 25% of nascent adopters use data to reduce costs, while 91% of advanced adopters and 69% of nascent adopters use it for product and service validation.
- Firms are increasingly using AI-based customer analytics and social listening to inform product development. The data is sourced from websites, search engines, and social media, before being subjected to natural language processing, and complex event processing to product customer related insights.
- The customer data is used by 31% of firms in the nascent stage of digital product development, and by 73% of firms that are at an advanced stage, to optimise the production of new and existing products and services. As such the share of personalized products produced by the companies at the nascent stage is expected to increase by 2%, and 26% for firms at the advanced stage.
- General Electric made changes to its design and production processes using digital technologies and reduced the time to market for its giant gas turbines by 50%.
Sales Cycle Insights
- The stages of the sales cycle are prospect, connect, research, present, meet objections, close, follow up and referral.
- Three insights into how digital trends are impacting the sales cycle are shortened sales cycles from the application of artificial intelligence and augmented reality, and predictive analysis improving sales decision.
- Artificial Intelligence (AI) can be applied process automation, sales guidance, and conversation guidance during the sales cycle. Marketers have taken notice of this, as evidenced by the 186% increase in the use of AI over the two years between 2018 and 2020. In 2018, 29% of marketers used AI, while 84% reported use of AI in 2020.
- Process automation can be used to automate administrative tasks such as manual data entry, personalizing contacts, and deal closure, that take away from time actually selling by sales persons. An AI driven sales assistant can reduce the time it takes for calendar management, contact management, email drafting, connecting the right content to the right client, and setting reminders.
- AI can also assist with identifying contacts that are ready to buy, prioritize leads based on point within the sales journey, and suggest the best time of day to call particular prospects. This is particularly useful when there are many sales leads generated. When leads are prioritized using AI applications, it results in a high performing team 1.6 times more than an under performing team.
- Conversation analytics can be used to train sales representatives in determining their talk to listen ratios, the appropriate time to segue into a discussion on the product and it’s pricing, and the best choice of words per client.
- These applications of AI to sales helps to shorten the sales cycle by making the completion of routine tasks more efficient, thereby allowing the sales representative to focus on the actual sale of the product. Sales guidance helps the sales representative to reduce planning time while simultaneously preparing the salesperson for the interaction with the potential client, and conversation guidance provides feedback and ideas to tailor pitches for maximum effectiveness.
- Harvard Business review notes the applicability of AI to the sales process, stating that lead scoring, forecasting, up selling and cross-selling, and performance management are all areas that can be impacted. They state that for sales teams to harness AI for their purposes they should first identify the different types of data sets that are within a company that can assist in the sales cycle and then combine the data sets with a customer relationship management platform to access the analytic tools.
- Extended reality is an umbrella term used to combine augmented reality, virtual reality, and mixed reality. Augmented reality refers to situations where a view of the real world is augmented with virtual images and sensory overlays. Virtual reality refers to a simulated three-dimensional environment such as Google Earth VR. Mixed reality refers to instances where the real and virtual worlds are merged.
- These technologies are not very prevalent in the sales industry because it can be expensive, complex and can be seen to have no practical usage.
- However, AR/VR can be useful in sales as they can turn a sales pitch into something that feels like a live demonstration, a potential positive when there is a surfeit of content and ads are blocked by ad blockers. By providing a multi-sensory experience, AR/VR can also help to appeal to the emotions of the potential user by bringing the buyer into the world of the brand and engaging with them on a deeper level.
- In B2B sales, where there are buying committees, AR/VR can provide an immersive and realistic experience with the product prior to decision-making. Through these factors alone, “weeks” can be taken off the sales cycle through the application of the following use cases: demonstrating a product, experience marketing, and to create content for brand storytelling that is dynamic and unique.
- Applications of AR/VR technology in the sales cycle places the product into its environmental context, and reduces the occurrences of multiple demos. Because the AR/VR application can be distributed within teams, decision-making is improved when team members that do not have to schedule physical demos. Augmented reality can accelerate the sales cycle by as much as 30%.
- Saritasa notes that VR has been leveraged in reducing the time for the sales cycle in the electrical industry, aerospace industry to demonstrate in flight engine failures without the real world damages, in the automotive industry to explore how cargo can be most effectively used in commercial transport, and in custom manufacturing to manipulate virtual prototypes without the need to create physical prototypes that can be expensive, and take long to produce.
- For Fujitsu, AR shortened the sales cycle when the sales team only needed a mobile device to provide a demo, allowing customers to be more empowered and engaged in making confident purchase decisions.