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INSIGHTS
Save or spend? Solution providers have to decide how much to invest in technical development, without going into debt. a&s finds out how manufacturers maintain an edge in innovation while ensuring the ROI is right.

Secrets to Success: How Businesses Balance R&D Spending against ROI

Date: 2011/09/07
Source: a&s International

ENGINEERING INTEROPERABILITY
Integration with third-party components and solutions can be difficult. “Even with ‘standards' there is a difference of the way it actually works as opposed to the way it is written it should work — just ask Microsoft,” Salzman said.

Ideally, companies should disclose interfaces and provide “how to” information for product use to third parties, without many hurdles. “It depends on the intentions of the other parties, if they are using the open standards as a marketing tool or if they really want to cooperate and integrate,” Rietschel said.

Clear documentation helps smooth integration between hardware and software. “MegaLab was developed to make it easy for platform designers to test and modify their software and hardware for use with Arecont Vision cameras,” Zhou said.

ImmerVision ensures its lenses will work with different products through a compliance check. “Manufacturers submit their product for testing, then the certification is signed by our chief engineer stating product XYZ is ImmerVision-enabled,” Gasparini said. “This is the case for lenses, software and products.”

STREAMLINING PRODUCTION
While some companies did not reduce R&D funding, they made moves to make production more efficient. This includes greater factory automation as well as relocating production facilities to other countries. However, nearly all hardware companies interviewed felt there was no place like home. Outsourced labor may be cheaper, but domestic production enables tighter control over product development.

While Dallmeier visited many international production facilities, it chose to keep manufacturing base in Germany. “Dallmeier is the only manufacturer in Germany that develops and manufactures all components on its own,” said Konrad Hechtbauer, Director of Project and Application Development at Dallmeier electronic.

Companies with overseas production select partnerscarefully. Theia's lenses are made by a partner with plants in Japan as well as Indonesia, Iniguez said. March Networks manufactures hardware in Mexico and Asia, but software is developed in-house. “Our central R&D location is in Canada, with 80 percent of it in Ottawa, or more than 100 people,” Colciago said. Barix moved production to China 10 years ago. “We are considering opening a second production location outside of China for various reasons now,” Rietschel said. Its R&D is based in Switzerland and Germany.


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