The Effect of Project and Process Characteristics on Product Development Cycle Time

Abstract

As global competitive pressure increases and product life cycles compress, companies are trying to shorten product development cycle times. The author investigates the relationship between the actual length of product development cycle times (in months) and several basic product development project strategy and process characteristics. The research quantifies how product development cycle times increase with increased product complexity and with product newness, how using a cross-functional team interacts with product newness in the way it acts to reduce cycle time, and how using a formal product development process interacts with product complexity in the way it acts to decrease cycle time. The findings suggest that using cross-functional teams is more important in projects in which less of the design is a carryover from a previous generation. Teams then had a large impact in reducing product development cycle times. In contrast, implementing a well thought-out process is more important in firms (or divisions of firms) developing complex products or services. The more complex a product, the more time a formal process eliminates from the development cycle.