Project and innovation management

Project And Innovation Management With An It Focus
Abstract:
Today’s technology has focused on the senses of sight, sound and touch. To enhance the sensibility of technology we have introduced our innovative project “Digital Olfactory System”. This is the area of virtual reality which also have very vast applications e.g. entertainment (games, movies etc), Internet and e-commerce. On successful implementation of this technology a videogame player or a viewer watching movie could feel the scent of the scenes of the game or movie. And an online buyer would be able to smell products online before buying them.
Concept Generation And Selection
This chapter gives a brief introduction of our innovation and defines how it will bring a change in the world of e-commerce and virtual reality and give competitive advantage to our company in the market.
Introduction
Every human being is granted with five senses i.e. sight, sound, smell, taste and touch. Our nose is the one that has more relegated in our sensitive surroundings. The sense of smell brings us into harmony with nature. It warns us of dangers and sharpens our awareness of other people, places and things. It helps us to respond the people we meet, can influence our mood. Our nose allows us to make sense out of scents about what’s going on in the world around us. Right on the roof of the nasal cavity is the olfactory epithelium, contains special receptors which are sensitive to scent molecules that travel through the air. These receptors are microscopic and there are at about 10 million of them in human nose.
By the time all the technology in the world has worked mostly on vision and the voice, similarly sufficient work has been done in technology to sense touch. We found that very fewer efforts are done to approach the sense of smell. So far, computers today can work with only 3 out of 5 senses.
Innovation Description
Scent is one of the most attractive phenomena of life. Use of the scent in environment has become an issue in society. Most companies today want to market their products though direct marketing, though which there is a desire to have an advertising ability which appeals to all five senses.
To detect odours of different things we have the ability to smell. We have a special portion in our brain called Olfactory Lobe which senses smell. Human could only smell seven basic odours and their combination it is similar like four basic colours make all the colours. Smell has a great impact on how we perceive our surroundings or a new thing. It is the sense of human being which never turns off as a person smells with each of his breath and an adult person breath as often as 20,000 times a day. There are about 400000 different odours in the world, as human we can distinguish 10,000 different smells.
Our aim is to develop a digital system which have the ability sense, capture and reproduce the most common smells. The sense of smell is closely related to memory and emotion which makes odour a powerful way to reinforce ideas.
Product Description
Digital Olfactory System will be a combination of both hardware and software. The hardware will capture and regenerate the smell while software evaluate the smell equation (e-smell equation) and generate bits (electrical signal) for a specific type of smell and finally the smell will be regenerated on the other receiving end. The hardware of the system will be comprised of two parts, i.e. one to sniff the smell and other is to regenerate the smell. The device will be connected with a computer system. The software part of this system will be a driver for this device which will analyse the sniffed smell and generate a digital equation to reproduce a specific odour. The software will also be able to convert the smell in to digital signals and broadcast on the web.

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The coded odour would be downloadable to the computer like images and sound files. Users will be able to modify, regenerate their own smells and post on internet. This technology will be able to produce scented emails, scented websites. In future it could also be possible that these devices play a vital role in our life like in movie theatre, TV and internet etc.
Our product will not only be sold as a separate peripheral device for computer but it will also be integrated in Apple laptops, digital cams and cell phones.
Implementing The Idea
As discussed earlier that Digital Olfactory System will be a combination of both hardware and software. The hardware of the system will be comprised of two parts, i.e. one to sniff the smell and other is to regenerate the smell. To capture smell a device like smell detector could be used. As discussed above that there are seven basic smells which are minty, floral, ethereal, musky, resinous, foul, and acrid. These basic smells combine together to make 400000 smells in the world.
Prototype
The device to sniff odour have the special circuitry to detect each of the individual smell from a sniffed smell and pass its signals to the device driver which have the built-in capability to calculate the equation of the sniffed aroma on the basis of the intensity of each basic smell. While on the regenerating side this scent will be reproduces by reversing the e-smell equation. The smell reproducing device will have the cartridge filled with seven basic scents. The device driver software will send the e-smell equation to the micro controller of the smell generator. The microcontroller will than mix the appropriate quantity (as per equation) of each of the basic smell to reproduce the sniffed smell.
Applications of Digital Olfactory System
Digital olfactory system aims to manufacture the hardware for smelling device (recording the smell), storing the smell (in the shape of digital signals) and regenerating device to regenerate the smell as output. It develops the software and the hardware for the entire process. Digital olfactory system would with a driver package that could be installed on any computer to make the system compatible with the computer. The idea is to make all these devices function independently ,which means that the regenerating device can be installed independently on any computer and can act as a receiver which has its own advantages especially in future when the laptops , computers and televisions could be manufactured with built in digital olfactory receiver system. Similarly by manufacturing the receiver or the smell sensor separately, it can be used in digital cameras as an additional feature and the pictures can give a real time feel if viewed on a television or a computer with a regenerator that is  built in or attached as a peripheral device. The regenerators could also be designed as just generators that can be used as room fresheners for big rooms and car fresheners for cars.
There could be many applications for digital scent such as:

 Cameras equipped with digital scent technology can capture image as well as smell
 Send scented email (how romantic)
 Watch scented DVD’s
 Play scented video games
 Try a perfume from a product’s website

Why We Want To Do This?
There could be many applications of our product but the four basic types of applications that Digital Olfactory System seems a logic fit for at the moment.

 Marketing
 Entertainment
 Education
 Medical

Company Structure And Market Research Phase
In this chapter we have discussed our business model and defined that how the internal and external factor can affect the market.
Our product – Digital Olfactory System
As we have discussed our product in detail in previous sections as far as design and application of our product is concerned it will be a small device with inbuilt smell sniffer and smell synthesiser connected with a computer or some other equipment like digital camera, gaming console, TV, Digital Projector etc. Our technology will make it possible to send scented emails. This product will be sold as peripheral device for computer and it will also be integrated in laptops, digital cameras and cell phones.
Our Vision
Our vision is to enhance the experience of viewing by making it livelier and giving it a feel of real time experience, through this innovation we could also to some extend replace the use of natural fragrance by using artificial perfumes ,this could also boost the advertisement companies for making advertisement with smell sensors ,this would give out a clear idea of their product ,especially in industries in perfumes ,deodorants business and more so in food industries .It could  attract more customers ,which is what any company intends to do through  any advertisement. This innovation can be used for security purpose as well; a more sensitive smell sensor could as a bomb sensor which could be of high to help locating and diffusing a bomb. By manufacturing dedicated smell regenerators the use of artificial flowers could be increased because the only thing missing in today’s artificial flowers made of plastic or synthetic fibre is fragrance and by adding fragrance to them the experience though arterial could be felt as very real and natural. The scope of this product is wide and the demand would only increase with the technological advancement in various sectors of IT and non IT sectors.
Business Model
(Source, Hedman and Kaling (2002), IT and Business Models, Pg 113)
As seen in the business model the important factors effecting a business are, Suppliers, resources, Activities and organization, the scope of management ,the offerings and  the market/industry that has the competitors and the customers.
As we intend to manufacture the digital olfactory system, there can be a company that is dedicated to manufacture the digital olfactory systems or it can be used by various companies in various industries who could manufacture customized digital olfactory system. We will try to relate the components of  business model  with the companies who might use it as a customized  additional feature in their already existing products, we would like the digital camera industry Canon to use the digital olfactory system  technology for recording the real time smell or fragrance by introducing a build in smell sensor in their cameras, and we would like apple to use the digital olfactory system technology for regenerating the real time smell or fragrance by introducing a build in smell regenerator in their laptops and computers. We would explain the business model and the components of the business model of these two companies relating with the addition of this new feature in their product.
According to Barney’s Resource Based View (Hedman and Kalling, 2002) the Activities are performed by a business to use the companies resources, offerings are the products and the services the firm has to offer through their sales. If a firm utilizes its resources in the best possible manner then invariable they will have more to offer to the customers.
The camera company Canon and the laptop company Apple could use their resources to built this technology and use it for their product which would improve on what they have to offer to their customers, if they be the first ones to come up with this feature then their competitors like Nikon, Sony and other in camera industry and dell, hp and other in computer industry would lack this competitive advantage, hence this would give Canon and apple a clear edge over their competitors.
External Context
It is important to analyze the external environment for any product of a company as it has a lot of forces acting on it that it has to deal with to be successful in the market.
Market Segments
Since we choose to add the feature of a smell sensor in the cameras of Canon and a smell regenerator in the laptops and desktops of Apple, we will focus on the camera and computer manufacturing companies and the market pertaining to it. We would describe further how this added feature can give Cannon and Apple a competitive advantage over their competitors and give more value for the product to their customers. The product will also face the forces in the external market like the suppliers, buyer’s substitutes, potential entrants and competitors which are the porters five forces we will discuss how and what extent these forces tries to hamper the success of this product.
Competitors
Some of the competitors of Cannon are Nikon, Sony, Samsung, Sony Ericson and others while the competitors of Apple are other computer manufactures like Dell, Hp, IBM and others, if Canon and Apple come up with the additional feature of digital olfactory system in their product it will surely give them a competitive advantage over their other competitors as it would be first of its kind of a product launched in the market.
Buyers
Buyers are the customers of the product, the buyers of this new product from Canon would be worldwide, and this could attract all the age groups that are interested in photography and also the professional photographers. While the customers of Apple who are already impressed by Apples innovative products would want to buy this product which would increase their sales and hence increase their profit.
Potential Entrant
Since it will be a product which will be first of its kind the threat from a new entrant will be less at least in the initial stages of the product life after the launch.
Suppliers
The suppliers of this additional feature could be the highly eminent staffs that work in R&D department of Apple and Canon. The product will be developed by renowned computer, digital cam and cell phone manufacturing companies like Samsung, Sony Ericson, Canon and Apple. The companies already have their suppliers.  Although this is a totally new idea the companies might have to use their own resources to develop specialised hardware like sniffer and smell regenerator. 
Substitutes
Threats from the substitute can be assumed to be low as this being an innovative product it will surely take time for other companies to come up with the same technology.
Internal Context
Internal context can be seen through following factors
Related Product Line
The intention is to add an additional feature, the Digital olfactory system in cameras and computers, that is the smell sensor in Canon cameras and smell regenerator in Apple computers.
Factors Affecting Product Development
Some of the possible factors affecting product development are Market research and knowledge, risk management, coordination.
Market Research
It is important that the company is aware of the public demand, as eventually it’s the buyers that make the market for a product so there can be a research carried out for a product that we intend to launch. It can be done by the research teams of Apple and Cannon.
Risk Management
The project managers of Cannon and Apple will have to plan a risk management plan for the proper running of this new project, with innovation comes a lot of risk, since it’s a completely new technology there will be no references available to work out a plan so it is up to the project managers to make a plan and decide how to move along in this innovative project.
Knowledge Management
Knowledge management is not very easy to define precisely and simply. According to Brian (Bo) Newman, 1991 “Knowledge Management is the collection of processes that govern the creation, dissemination, and utilization of knowledge”. Our project is a complex project which not only involves an innovative hardware and software to make it. There are different people from different fields (e.g. electronic engineers, microchip programmers, system developers etc) have to work on this project. To make every detail of the project available to each member of the development team there should be a common (shared) repository and database to manage the knowledge carefully. (Bessant & Tidd, p 194).
Coordination
The success of any depends on how well it has been coordinated, in this case it is even so true because there will have to be good coordination between the different sectors and set of engineers working in the company to make the project successful.
Quality Assurance
Quality is intangible and is often considered unimportant in development.
Quality assurance is a planned and systematic set of several activities
implemented in a system to verify that quality requirements for a product or
service will be fulfilled
Cost
It is one of the major factors of product development. Our idea includes lots of research and development both in hardware and software. For this project initial estimate is about 6 million Krons. A small amount of about 5 to 10% of the total cost will be reserved in lieu of the unpredictable costs.
Market Research
Market Research is a collection and analysis of data about a particular product in a target market it also performs the analysis of the competition and environment of the market. It allows the companies to learn more about past, current and potential customers, including their specific likes and dislikes. The data can be collected either from primary research or secondary research. The aim of the market research is to get more understanding about a product to launch it in the market or to analyses the consumption of a product in the market and for many other different purposes. This research could be qualitative or quantitative.
Market Interaction
As we are going to introduce a digital nose and named it “Digital Olfactory System”. It is a totally new idea. We are intended to include our digital olfactory system in computers, digital cameras and cell phones.
Apple computers are popular for its Mac computers; similarly Sony and Canon are renowned for their digital cameras and throughout the world. These companies will include our system in their products as an additional feature and introduce these products worldwide. So the users of Mac based computers, digital cam and cell phone users (of the whole world) who want to capture scent and enjoy it while playing movies and games, retrieving pictures, would be our target customers.
To research on market interaction we have to use 4P model to examine the market in the context of product, price, promotion and placement.
Product: Apple computers, Sony and Canon’s digital cams and Sony Ericsson are very famous in the whole world for good quality of their products. Including the new feature in their system will give them a competitive advantage in the market and boost their profit.
Price: Average prices of products Apple, Canon, Sony, Samsung and Sony Ericson are quite high and demand of their products is also very high. Addition of a completely new feature in their products will increase the products’ price up to 30 to 50%. But the high demand of the products in market justifies the higher price to some extent.
Promotion: before the launch of product there would be promotional campaigns of the product line which include a stunningly new feature of sensing and regenerating scene in digital format. For these campaigns all the communication channels and media will be used. All of our companies mentioned above already have their brand names worldwide. Customers’ satisfaction (word of mouth) on the product line of these companies would also be helpful in product promotion.
Placement: The product line equipped with new feature will be placed at thousand of sales points spanned over the world, of Apple, Sony, Canon, Samsung, and Sony Ericson.
Implementation Phase
This chapter gives a brief overview of implementation phase of our product. We will see how the team will be organised, what are the responsibilities of each team member; time and cost factors will be calculated. And finally the successful launch of the product.
Product Innovations And Development Process
To implement our innovation project stage gate model will be used. Below is given the detailed description of the model:
Initial Screen: At initial Screen Two Criteria Are Defined Which Are:

 Must meet
 Should meet

Must meet criteria would define the standards which will mandatory for the project in order to move to the next stage. It will define the prerequisites (the minimum requirements) for each stage.
Should meet will be some extra requirements, which will not be necessary to fulfil but they will add more value to the product if met.
After analysing the “must meet” and “should meet” criteria a feasibility report will be prepared by the Financial Analyst to check that both criteria are fulfilled.
Preliminary Assessment: it is the 1st stage at which the project is accessed on the basis of market research in which the scope of the project is assessed and success factors are calculated. We are confident that no other company is working on this new idea. The customers’ requirements and demands will be found out during market research and we will try to implement the final design of our product according to the requirements of the customers. Funding of the project will be started and total time required for the completion of project will be analysed at this stage. Detailed investigation will be done focusing on the scope and cost of the project. Analysis will be made prior to the product development and must meet and should meet criteria will be made sure. Innovative idea will be reviewed finally.
Post-Implementation Analysis: product performance will be analysed by calculating the profit earned through its sale in the market. Required improvements in marketing plans and product’s performance will be made in the light of the results gained.
Product Development Model
Spiral Model
The product could be developed using the Spiral development model as shown below:
Spiral model gives an incremental approach towards the development of any system. It is also used if the risk factor is quite high in development process. As our idea is new and it requires lots of research and development. Spiral model gives an opportunity to reconsider the product design and development at several different stages.
Requirement Stage
The requirement stage is the first stage where all the information about the requirements of the project is collected efficiently by the research team or a dedicated team chosen for the project and then the data is delivered for the next stage.
System Design
This stage has the designing of the product, a design of product is necessary before the implementation of the product; the design is built based on the information from the requirement stage.
Implementation And Coding
The software code will be written at this stage and hardware will be produced on test level. This stage sees the implementation of the design created for the product, this is one of the most crucial stages as the risk management plan has a dedicated time and budget to get the product manufactured and everything has to be done as planed of foreseen for the product to be successful.
Testing And Verification
After the product is manufactured it has to be verified and tested before it could go into production stage at commercial level, verification stage allows the glitches if any in the product (either in hardware or software) to be fixed through a feed back to the implementation stage. This has to repeat till the product is as per desire. This all be done keeping in mind the time constraint. As the longer it takes the more time it gives to the competitors.
Commercial Production
Once the product is verified and passed as okay to be manufactured then it hits the production stage where it is manufactured in a number that is according to the plan that is made before the designing of the product starts .once in the production it can be increased or decreased based on the sales and market of the product.
Product Development Team Model
For successful development of each product good man power is the key resource. Skilled work force acts as the backbone in every project. To complete our project successfully we require a team of about 9 members which include:

1 Project Manager

1 Electronics Design Engineer

1 Embedded Systems Engineer

1 Software Developer

1 Engineer for Quality Assurance

1 Financial Advisor

2 Sales and Marketing Personnel

Project manager will manage the overall project and will be responsible to manage and monitor all the project activities and mange for the project development. Project manager will also be responsible to bridge the gap between top management and the members of the project development team.
Role of the electronics design engineer would be to design the circuitry of sniffer and smell regenerator. He will also responsible to design the digital circuits of the system and selection of appropriate microchips which will be used in the hardware of the Digital Olfactory System.
Embedded System engineer will be responsible to write the device drivers and to design routines for microchips which will be used in scent sniffer and regenerator these microchips will coordinate with computer through device driver software which will also be developed by the system programmer.
Software developer will be responsible to design the system interface and coordinate with embedded programmer to develop a mutual plan of software development for the DOS.
Quality assurance engineer will monitor the quality of the product at each level he will also give his recommendations to the product development team to improve the quality and performance of the product at all phases of development.
Role of Financial Advisor would be to keep track of the finances at each phase. He will also provide feasible financial solutions in a particular situation.
Marketing and sales executives will make the plans and strategies to promote the product. They conduct market research and launch advertising campaigns.
Development Process For Finance And Time
Finances
We have a budget of about 5 million Swedish Krons to accomplish our project. We are intended to allocate the financial resources mentioned below:
Intellectual Property Rights Issue
To protect our innovation from imitation and illegal copying we will get the intellectual property rights of our product. Our product is combination of hardware and software. The hardware will be patented and the software will be copy righted. To get the patent rights of our product we have reserved an amount of 200,000 SEK in our budget.
Commercialization Phase
In this chapter we discuss the diffusion model of commercialization phase of our product. Commercialization is the last phase of innovation process model according to our stage gate model.
Type Of Market Launch
This is the final and very important stage of the project, as it decides the success or failure of the product in the market. A good marketing strategy leads towards the success of the product in the market. For our project we have focused on market research in a great detail, we will also going to induct two marketing and sales executive to make business plans and do market research. Before launching the product into market we will test it in all conditions and perspectives.
After the careful testing of our product we will perform the test marketing (Pilot Launch) of our product. According to businessdictonary.com the definition of test marketing is:
“Product development stage where the product and its marketing plan are exposed to a carefully chosen sample of the population for deciding if to reject it before its full scale launch. Test marketing is an experiment conducted in a field laboratory (the test market) comprising of actual stores and real-life buying situations, without the buyers knowing they are participating in an evaluation exercise. It simulates the eventual market-mix to ascertain consumer reaction. Depending on the quality and quantity of sales data required for the final decision, test marketing may last from few weeks to several months. Due to its high cost, however, test marketing is more suitable for fast moving packaged goods than for consumer durables”
Any marketing strategy is incomplete without advertising. (I have seen an interesting quote about advertising somewhere “without advertising its like smiling in the darkness”) On successful completion of the pilot launch of the product the product will be advertise trough all the media e.g. TV, radio, Internet, newspapers, magazines, hand bills etc.
Diffusion Model
The Product Diffusion Curve is a useful model that helps a company to think about who it should be targeting at different stages of the life of its product or service. Understanding the Product Diffusion Curve, we can target our marketing efforts intelligently, getting the best returns from our efforts.
At the start of launch of our product sales is expected very low. Our product will not only be sold as a separate peripheral device for computer but it will also be integrated in Apple laptops, digital cams and cell phones. So all the customer of these products will be attracted to a revolutionary new feature of transmitting and saving smell. This will increase the sales of the product and companies will earn a maximum profit within a time period of one year.
According to Bessant and Tidd (2007, P342) there are several characteristics which effect the diffusion of the product.
Relative Advantage: Our technology is a totally new idea and there is no company using such technology in their products. Due this new feature the people will be attracted to buy those products which will be equipped with digital olfactory system.
Compatibility: Our system will be compatible with all the existing products (in which we are going to add it) in the market e.g. laptops, digital cameras and cell phones.
Complexity: The working of the products equipped with DOS will be very simple there would be only one button on computers, cameras and cell phones to activate / deactivate whether the smell capturing or not. Similarly on retrieving the scented file the system will prompt that the file has extra feature of scent and on activating that feature the user can enjoy the real scent while retrieving the file.
Trail ability: The demonstration of functionality of our system will be given at every sales point and this feature will be used for the marketing of the products having DOS.
Observe ability: The functionality and performance of the products having DOS will be observed keenly for a period of 6 months and if any problem occurs it will be try to resolve. There would also be a parallel research to improve quality of our system.
References
Websites:
http://library.thinkquest.org/05aug/00386/smell/funtosmell.htm (Accessed on 2010-03-01)
http://www.insyte-consulting.com/Home/InTheNews/Newsletter/JanuaryFebruary2009/AlternativeModelsHelpManageProductDevelopmentRisk (Accessed on 2010-03-04)
Books: