FFE activities

A large number of the activities implemented in the actual product development (PD) phase does not apply to the front-end as the nature of the work, commercialization date, funding level, revenue expectations, and other factors are fundamentally different (Koen et al., 2001). Koen et al. (2014) created a comprehensive list of empirical studies of front-end practices, as illustrated in Appendix 2.

Opportunity identification

Koen et al. (2001) describe opportunity identification as the phase when an organization identifies the opportunities that the organization desires to pursue and considers business and technological resources so that resources will be allocated to new avenues of market growth and operating efficiency. Opportunity identification is typically driven by business goals such as responses to competitive threat, breakthrough possibility for competitive advantage, or operations improvement (Koen et al. 2001). Poskela (2009) describes opportunity identification as a critical but often underestimated front-end activity where companies typically lack systematic and effective practices that would enable them to proactively identify emerging opportunities.

An organization may use formal opportunity identification with creativity tools and techniques (brainstorming, mind-mapping, lateral thinking), problem-solving techniques (such as causal analysis, fishbone diagrams, process mapping, theory of constraints), or alternatively informal opportunity identification activities (ad hoc sessions, cyberspace discussions, individual insights, or edicts from senior management) (Koen et al., 2001).

Opportunity analysis

During the opportunity analysis phase, additional information is needed to translate opportunity identification into specific business and technology opportunities and making early and often uncertain technology and market assessments. Hard quantifiable templates are typically not applied in front-end opportunity analysis; rather, more informal activities are engaged in, such as focus groups, market studies, scientific experiments, competitive intelligence, and trend analysis. (Koen et al., 2001)

Idea genesis

Idea genesis is the birth, development, and maturation of an opportunity into a concrete idea; it is an evolutionary and iterative process in which ideas are built, torn, combined, reshaped, modified, and upgraded. Idea genesis can be a formal process that includes brainstorming events and idea banks to inspire the organization to generate new ideas for the identified opportunity; however, a new idea can be generated outside of any formal process. Idea genesis can be enhanced by direct contact with customers or users, linkages with cross-functional teams, and collaboration with other companies and institutions (Koen et al., 2001).

Idea selection

In most businesses, there are numerous product or process ideas that the critical activity is to select which ones must actually be implemented. Idea selection is a critical activity that is necessary to choose which idea to be pursued in order to reach the most business value. Selection can be as straightforward as an individual’s preference among alternatives or as formalized as a prescribed portfolio method. Extremely formalized project selection and resource allocation in the front-end is difficult due to the limited information and understanding at that phase and due to the uncertain definition of financial returns (Koen et al., 2001).

Concept and technology development

Concept and technology development is the final element in Koen’s FEI machine. This stage involves the generation of a business case based on approximations of market potential, customer requirements, investment needs, competitor

assessments, technology unknowns, and general project risk. The level of formality of the business case can vary according to the nature of the opportunity (new market, new technology, new platform, etc.), level of resources, organizational requirements, and the business culture (Koen et al., 2001).

Jarno Poskela (2009) has summarized front-end activities as opportunity identification, idea generation, idea screening and selection, concept development, concept testing, customer need assessment, technology verification, and business analysis; this is illustrated in greater detail in Table 4.

Table 4. FFE activities. Adapted from Poskela (2009).

Activity Key aspects References

Opportunity identification

Identification of new product opportunities driven by the

organization’s strategies and business goals.

Cagan and Vogel (2002), Nobelius and Trygg (2002), Koen et al. (2001), Khurana and Rosenthal (1997), Gorski and Heinekamp (2002), Afuah (1998), Von Hippel (1988), Cooper (1998), Koen and Kohli (1998)

Idea generation

Generating, developing, and expanding alternatives for the identified

opportunity. Must be separated from idea evaluation.

Koen et al. (2001), McAdam and McClelland (2002), Gorski and Heinekamp (2002), Tidd et al. (2001), de Bono (1970) Idea screening and

selection

Identification and selection of the most potential ideas for further development with the help of screening criteria.

Cooper 1998, Ozer (1999), Bacon et al. (1994)

Concept development Concretizing ideas into new product _concepts.

Nobelius and Trygg (2002), Koen et al. (2001), Khurana and Rosenthal (1997), Tidd et al. (2001), Ulrich and Eppinger (2003), Cagan and Vogel (2002), Bacon et al. (1994)

Concept testing Testing of concept viability internally _{and externally with potential customers.} Lees and Wright (2004), Ozer _{(1999), Tidd et al. (2001)}

Customer need assessment

Acquiring timely and reliable information on customer needs and user requirements.

Bacon et al. (1994), Gruner and Homburg (2000), Lukas and Ferrell (2000), Atuahene-Gima (1995), Montoya-Weiss and Calantone (1994), Salomo et al. (2003), Vicari and Troilo (1998) Technology verification Detailed technical investigation of concepts that have been proposed to

assure appropriate functionality.

Cooper (1998), Koen et al. (2001), Bacon et al. (1994)

Business analysis Estimating market potential, investment requirements, competitors’ reactions, and generic development risks.

Nobelius and Trygg (2002), Koen et al. (2001), Murphy and Kumar (1996)

There is a risk associated with focusing too much on one of the FFE activities (Cooper, 1993). Cooper highlighted the importance of proficiency in predevelopment activities and emphasized the danger of avoiding any vital activity (Cooper, 1993). Similarly, front-end activities must be considered as being interrelated and avoiding even one of them contributes to project failure (Khurana and Rosenthal, 1997).

The following subsection focuses on performance in the front-end phase and the associated performance evaluation metrics.