Determining Feasibility and Calculating ROI for Using Immersive Technology in Product Development and Prototyping

Implementing immersive technologies like augmented reality (AR), virtual reality (VR), and mixed reality (MR) for improving Product Development and Prototyping requires a careful assessment of feasibility and a clear understanding of the return on investment (ROI).

In a previous post, Boston Engineering asked you to Explore Immersive Technologies in Product Development and Prototyping.

Central to the article was highlighting the Product Development and Prototyping challenges your organization is facing. Immersive technologies have emerged as powerful tools to revolutionizing how companies develop products and create prototypes. 

How do you know if these technologies are right for your company’s product development process? And once you’ve decided to explore them, how can you accurately calculate the return on investment (ROI) to justify the cost? 

In this blog, we’ll explore the best ways to assess the feasibility of implementing immersive technologies in product development and prototyping, and provide a guide on how to calculate ROI. 

Continued Below

What is Immersive Technology? Immersive Technology is the interaction of advanced software, devices, and data allowing users to experience information in new and empowering ways. Augmented Reality, Virtual Reality, and Mixed Reality from Boston Engineering are tools available today to elevate your organization’s capabilities, competitiveness, and agility.

Immersive Technology addresses today’s operational, service, and sales challenges with a nod to the future of business: better information and faster delivery that strengthens companies against uncertainty, while building competitive advantage.

Learn more about Immersive Technologies at Boston Engineering

Assessing Feasibility for Immersive Technology in Product Development 

Before diving into immersive technology, it’s important to evaluate whether these tools are a good fit for your company’s specific needs.

Here are the key steps to determine feasibility: 

Identify Your Product Development Challenges 

The first step in determining feasibility is identifying specific challenges in your product development process. Common problems that immersive technology can solve include: 

• Lengthy development cycles: Are physical prototypes slowing down iterations and decision-making? 

• High prototyping costs: Does your team spend a significant amount of budget on materials and labor for physical models? 

• Collaboration barriers: Is it difficult for geographically dispersed teams to collaborate on designs and provide real-time feedback? 

• Complex product designs: Are your products so intricate that it’s hard to communicate design ideas clearly across departments or to stakeholders? 

By pinpointing the exact pain points, you can begin to assess whether AR, VR, or MR can provide solutions. 

Evaluate Your Existing Infrastructure 

Next, examine your current technology infrastructure. Immersive technologies often require powerful hardware (VR headsets, AR glasses, etc.) and specialized software. Determine whether you have: 

• High-performance computers: Does your current setup support high-fidelity simulations? 

• Training capacity: Does your team have the skills to implement and maintain these technologies, or will additional training be required? 

• Existing digital assets: Do you already have 3D models or CAD files that could be easily converted for use in immersive environments? 

This evaluation helps you understand what level of investment will be necessary to implement immersive tools successfully. 

Assess Workflow Integration 

To ensure successful adoption, immersive technologies must integrate smoothly into your existing workflows. Evaluate whether: 

• Immersive technologies complement your current tools: Can AR/VR tools work alongside your CAD software, design platforms, or product lifecycle management (PLM) tools? 

• Team collaboration can be enhanced: Can immersive technologies facilitate better collaboration between designers, engineers, and other stakeholders? 

• Virtual prototypes will improve communication: Will AR or VR prototypes help your teams and stakeholders better visualize the product and provide meaningful feedback earlier in the development process? 

Proper integration is crucial for maximizing the benefits of immersive tools. 

Consider the Scalability 

Determine if immersive technologies can scale with your company’s growth and changing needs. Can these tools: 

• Be used across multiple departments or product lines? 

• Adapt to new products, technologies, or design methodologies? 

• Increase in usage without driving up costs significantly? 

Scalability ensures that your investment continues to pay off as your business evolves. 

How to Calculate ROI for Immersive Technology in Product Development 

Once you’ve assessed feasibility, the next step is to calculate the potential ROI. ROI for immersive technology in product development can be broken down into several key factors: 

Cost of Implementation 

The first part of the ROI equation is understanding the total cost of implementing immersive technology. This includes: 

• Hardware costs: VR headsets, AR glasses, or other devices. 

• Software licensing fees: Costs for AR/VR development platforms, simulation software, or CAD integration. 

• Training and onboarding: Costs for training your teams to use the new technology effectively. 

• Development and customization: Initial costs for creating 3D models or building custom immersive experiences tailored to your company’s products. 

This upfront investment forms the foundation for your ROI calculation. 

Cost Savings from Reduced Prototyping  

Immersive technology allows for virtual prototypes, reducing the need for physical models. Calculate how much you could save by: 

• Eliminating or reducing the number of physical prototypes: Factor in materials, labor, and any other costs involved in building traditional models. 

• Speeding up iterations: Virtual prototypes allow for quicker feedback loops, reducing the time and cost spent on revisions. 

Example: If your team currently creates 5 physical prototypes per product at a cost of $10,000 each, and immersive technology reduces this to just 1 prototype, you could save $40,000 per product. 

Increased Speed and Efficiency

By using immersive technology, product development cycles can be significantly shortened. To calculate the ROI here: 

• Estimate the reduction in time-to-market: Use data from previous projects to determine how much immersive technologies could accelerate development (e.g., fewer meetings, quicker feedback). 

• Evaluate the impact of faster product releases: If your product reaches the market faster, you may increase sales or capture market share more quickly, resulting in higher revenue. 

For example, if your average product development cycle is 12 months, and immersive technology reduces this by 25%, you could gain an extra 3 months of market presence, potentially generating earlier revenue. 

Improved Collaboration and Reduced Errors 

Immersive tools can help eliminate miscommunication, which often leads to costly errors or rework. To account for this: 

• Estimate cost reductions from fewer errors: Consider how much is typically spent on correcting design mistakes discovered late in the process. Immersive technology helps catch issues early by providing realistic visualizations and simulations. 

• Factor in improved collaboration: Better team communication and collaboration can increase productivity, further reducing costs. 

If immersive technology helps prevent just one major design flaw that would have cost $50,000 to fix later, that’s a significant ROI contribution. 

Enhanced Stakeholder Engagement 

Immersive experiences can improve stakeholder feedback and engagement. To quantify this: 

• Estimate how much faster stakeholders can approve designs: If stakeholders can make quicker decisions due to better visualizations, you can save time. 

• Evaluate improved customer satisfaction: Higher quality designs and faster iterations can lead to better customer experiences and ultimately more sales or partnerships. 

For example, if faster stakeholder approvals cut 2 months from your overall timeline, you can factor in the revenue generated by entering the market sooner. 

Long-Term Benefits: Innovation and Competitive Advantage 

Immersive technology positions your company as an innovator in product development, which can lead to long-term benefits. To quantify: 

• Estimate the impact of improved product quality: More accurate and refined products can lead to better customer reviews, increased sales, and a stronger brand reputation. 

• Factor in competitive differentiation: The ability to develop products faster and more efficiently than competitors can result in greater market share and long-term revenue growth. 

Download the Latest Immersive Technology Whitepaper from Boston Engineering

Augmented Reality (AR) is revolutionizing the way we interact with digital content, merging the physical and digital worlds in innovative ways. In this white paper, we provide a comprehensive overview of AR, exploring its definition, potential uses, challenges in adoption, and strategies for companies to embrace this transformative technology.

Download to begin Embracing the Future

Bringing It All Together: Calculating Total ROI 

Once you’ve gathered all the relevant data, calculating ROI involves comparing the total cost of implementation to the potential benefits: 

• ROI Formula: ROI=(Total Benefits - Total Costs)Total Costs×100ROI = \frac{\text{(Total Benefits - Total Costs)}}{\text{Total Costs}} \times 100ROI=Total Costs(Total Benefits - Total Costs)​×100 

For example: 

• Total Benefits (cost savings, increased speed, reduced errors): $300,000 

• Total Costs (hardware, software, training): $100,000 

• ROI = (300,000−100,000)100,000\frac{(300,000 - 100,000)}{100,000}100,000(300,000−100,000)​ × 100 = 200% ROI 

In this scenario, for every dollar spent on immersive technology, your company would gain $2 in benefits. 

Conclusion 

Determining the feasibility of immersive technology in product development and prototyping requires a thorough evaluation of your current processes, infrastructure, and scalability needs.

Once you’ve decided to move forward, calculating the ROI will help you justify the investment.

By considering the cost savings from reduced prototyping, increased development speed, and improved collaboration, your company can make a data-driven decision on how immersive technologies can enhance your product development efforts. 

Ultimately, immersive technologies can streamline product development, reduce costs, and provide a competitive advantage, making it a wise investment for many organizations.

Ready to Start the Immersive Technology Journey? 

With the capability of saving time and money in operations, improving field service, and creating efficiencies in your sales process-- Immersive Technologies are currently available to provide an advantage against competition, and a buffer against uncertainty.

Augmented Reality seamlessly blends the physical and virtual, enhancing user experiences by providing additional information and digital elements without completely detaching them from their surroundings. This intuitive integration makes AR an accessible and cost-effective solution across various industries, from education to healthcare to gaming. By overlaying digital content onto the real world, AR empowers users to access valuable insights and engage with information in a more natural and contextual manner.

Virtual Reality offers a completely immersive experience, transporting users into captivating digital realms. VR's high level of engagement and interactivity makes it an ideal medium for applications that require intense focus, such as gaming, training, and therapeutic interventions. By fully engaging the user's senses, VR has the power to inspire, educate, and transform the way we approach challenges and opportunities.

Mixed Reality seamlessly blends the physical and virtual, enabling users to interact with digital elements as if they were physical objects. This enhanced level of interaction and collaboration opens up new possibilities for product design, maintenance, and training. MR is revolutionizing the way we tackle complex tasks and collaborate across different locations.

Whether you’re seeking to meet rising manufacturing demands, offer more efficient training and service delivery, or revamp marketing & sales efforts, Boston Engineering has the tools to tackle these issues head on and incorporate your specific needs. Let us help you create the roadmap to success: Get the full ROI through Immersive Technologies by working with Boston Engineering.

Let's start the Immersive Technology Conversation

No matter the challenge, our team possesses the expertise in the engineering disciplines and technologies you need to bring your vision to life. Impossible Challenge? Try Us.

Imagine your Impact: Stay up-to date- with the latest insights and trends we're watching. Add your email address below and sign up for a Monthly Summary of our most impactful posts!