Editor's Note: This article originally appeared in the March issue of SMT Magazine.

The medical device industry is exploding with innovative new products. In 2010, worldwide medical device revenue topped US $300 billion, according to Kalorama Information's, The Global Market for Medical Devices, with significant growth in many high-tech segments. In such a highly-competitive and lucrative market, many of the larger, more established companies are finding stiff competition from much smaller start-up companies that are designing and building high-tech medical devices in a fraction of the time it took only a few years ago.

As with most other high-tech product industries, software is a key component of products today. In fact, software is estimated to make up more than 50% of the R&D costs of the average high-tech device. One engineering director put it this way: "Hardware is the platform and software is the product." Software allows product engineering organizations to deliver more features and more variants of their products to the market in less time while streamlining costs for both manufacturing and maintenance. This is making many traditional product manufacturers rethink the way they engineer products. Many are actually hiring software engineers at a rate of two to five times the rate of traditional mechanical and electrical engineers.

Unfortunately, with all of these benefits, software intensive products also come with significant challenges. As I speak with customers, there are several common software-driven challenges that, if not solved, can impede an organization's ability to innovate rapidly, improve product quality, reduce costs and streamline compliance.

Challenge #1: Inability to Manage the High-Velocity and Volume of Change

A recent Ovum case study cited that software engineering accounts for 10 times the change of electrical engineering and up to 100 times the change of mechanical engineering. This accounts for both planned and unplanned change. Traditional hardware companies are actually planning for up to 90% of all product changes to occur in software for several reasons including:

• Reduced development costs: Designing and building software can significantly reduce the overall manufacturing costs of a product. As software replaces product specific hardware components, reproducing the software across thousands of products is essentially free.
• More change flexibility: Organizations find that they can implement software changes much closer to the release to manufacturing date, which allows development cycles to be shortened and products to better meet customer expectations.
• Lower maintenance and service costs: If updating a product only requires a software patch update to fix defects and enable new features, maintenance and service costs are slashed significantly.