Archive for the ‘Best Practices’ Category

Back in the mid 1960’s American Airlines ran a very successful ad program (the ad was “Take me along if you Love me”) in which business travelers were allowed to bring their wives along on their business trip – at no additional cost.

Thousands of business travelers took advantage of the offer and sales soared. Leave it to some marketing moron to contact the traveling “wives” and ask them how they enjoyed their trip. Seems that many of the “take me alongers” were not the wives but someone else.

Hundreds of divorces ensued and the airline was sued by many and sales took a turn for the worse.

Fast forward to 2011 and it seems that the grandsons/granddaughters of those hapless AA marketing mavens might now be working for Freescale.

Freescale is giving away free the MQX operating system – but is Freescale helping or handicapping their customers?

In a recent EMF survey of 660 embedded developers, we were able to compare design outcomes among all of the major operating systems (using our unique Dashboard tool – see video).

Citing just a few highlights,

	ThreadX	Micrium	VxWorks	MQX
Time from design start to shipment (months)	10.5	11.3	16.3	15.8
Percent of Designs completed Behind Schedule	29.8%	40.0%	51.1%	56.6%

 

So we are left wondering whether Freescale realizes what they are doing to their customers – and whether the grandsons/granddaughters of American Airlines marketers can find a place where their efforts can’t do any more harm. The Obama administration comes to mind.

 

Considerable attention and speculation has been given to the use of COTS hardware across different vertical markets, and whether this trend is expanding, remaining stable or declining. If the use of COTS is expanding, one would expect to see an economic benefit to its use – hence, a more important measure of COTS utilization would be reflected in the budgeted amount of COTS hardware as a percentage of total hardware cost.

In a recent 2011 survey of embedded developers (653 respondents), EMF asked respondents to report the percent of their total hardware budget that was devoted to COTS hardware.

Table I presents their responses according to vertical market. Whereas Aerospace/Avionics and Military had the highest response (these data reflect the percent of the COTS hardware budget compared with total hardware budget) Datacom and Electronic Instrumentation had a better than average response.

Percent of Hardware Budget Devoted to COTS Hardware
2011 EMF Survey of Embedded Developers
Industry Average	23%
Auto-Transportation	19%
Aerospace-Avionics	30%
Consumer Electronics	22%
Datacom-Networking	27%
Electronic Instrumentation	24%
Industrial Automation	20%
Medical	20%
Military	32%
Office Automation	14%
Telecom	23%

                   Table I

Table II presents developer responses according to chip architecture.

It is interesting to note that the budgeted percent of COTS hardware is consistent across all architectures, DSP and FPGA, but it is significantly larger for dual core and multi core developments. This might be due to the recent inclusion of multiple cores in embedded developments where the focus might be on software development within a mostly reusable hardware configuration. It will be interesting to see if this data is repeated in 2012.

 

 

Percent of Hardware Budget Devoted to COTS Hardware
2011 EMF Survey of Embedded Developers
Industry Average	23%
8-bit	21%
16-bit	22%
32-bit	24%
64-bit	23%
128-bit	26%
DSP	23%
FPGA	21%
Dual Core	28%
Multi-Core	35%

                             Table II

Information regarding the survey and data can be found at

www.embeddedforecast.com.

Survey data and the use of the EMF Embedded Dashboard used to compute these data can be seen at:

http://www.embeddedforecast.com/emfmip_videos.php

Ignoring important business information in order to save money is like saving up sex for your old age. Warren Buffet

An archeologist was searching along the Amazon River when he stumbled onto a tribe of warriors. They were both shocked and surprised to see each other. The archeologist cried out “Lord, please save me for I am totally screwed”. A black cloud appeared and a loud voice cried out “you are not screwed – pick up the rock in front of you and kill the chief”. He picked up the rock and threw it hitting the chief in the head killing him instantly. The archeologist looked up to see 40 tribesmen coming at him with their spears aimed at him. He looked to the cloud and a loud voice said …

“OK – NOW you’re screwed”

Sometimes market advice seems to work that way.

A decade ago the merchant computer board industry was abuzz with CompactPCI (cPCI) forecast to replace the VME Bus. Market analysts were calling cPCI the two-billion dollar marketplace. Given that cPCI was controlled by three vendors (by definition a commodity marketplace), we called it the “zero-billion dollar marketplace”. Advocates told me that I was looking at the tip of the iceberg. I said that we were looking at the tip of the ice-cube!

The outcome was a no-brainer. commodity markets don’t grow as strong and as large as polyopoly markets (those that support a broad range of vendors). In addition, virtually every cPCI design was custom – not off the shelf. So who won? Not us – we were correct in our analysis, but no one bought our research. Other market research firms made a lot of money selling what vendors wanted to hear – but those vendors (Force Computer and Motorola Computer Group, among others) are long gone.

We never regretted our strategy – although we didn’t make any money in having the correct analysis. Ten years later, we are still here and doing fine.

 

The EMF Approach to Comprehensive and Reliable Market Intelligence

EMF’s Market Intelligence Program involves three steps

• A comprehensive and statistically accurate survey statistically derived to insure randomness
• An initial series of cross-tabs to provide an overview of the survey results
• And an interactive Dashboard that enables you to explore the data set to  determine relationships in the data that can be essential to one’s efforts

No survey is adequate unless the data can be interrogated from a multitude of perspectives to establish relationships and correlations. EMF does this using a unique tool we call the Executive Dashboard.

 

A well constructed survey and the use of the Dashboard can provide the following:

 

• Determine comparisons between your competitor’s products and yours

• Determine developer metrics: number of developers per project; number of lines of written code as well as total lines of code; cancellations; designs completed ahead of or behind schedule – and how many months behind schedule; and, comparisons between pre-design expectations and final design results – and be able to do this for any vertical market, any chip architecture used, etc.

• One can look at developers’ most pressing concerns, what design processes are used and what developers believe are best practice

• Look at product line deficiencies and needs

• Look at what developers are planning to use and do

• Degree of satisfaction of customers with products and tools

• Find market messages that resonate with potential customers, and keep products aligned with these benefits

We have put together a series of videos to illustrate how our surveys are constructed and how the dashboard is used. We encourage you the reader and embedded professional to think about how you evaluate information that is critical to your success.

You don’t want that black cloud telling you that “now you’re screwed”. The only thing worse would be if you had paid for that information.

 

This is not an April Fool’s joke. The fresh snow on my Massachusetts lawn and driveway was our unexpected April Fool’s joke. If you responded to our request of our reader’s to take the same survey as did our embedded industry respondents, be proud and go ahed and ask your boss for  raise.

We recently posted a Blog comparing EMF Blog readers with their industry counterparts regarding how they stay knowledgeable about embedded products and services. There was, as might be expected, a substantial difference between the two groups. Our Blog readers were far more aggressive is gaining information than their counterparts.

In that Blog we posited the question whether such professional conduct would provide better and more cost efficient design outcomes.

For the past 15 years, EMF has conducted detailed and extensive surveys of embedded developers. Using the EMF Executive Dashboard (a data analysis tool unique to the embedded market intelligence community) we have been able to relate the decisions of embedded developers to their design outcomes. This also enables us to develop ROI and total cost of development calculations to establish the most cost effective of the many possible design undertakings. Our readers and downloaders of our many white papers are familiar with our results.

In our 2011 EMF Survey of Embedded Developers, we asked our readers to take the same survey as that of the statistically accurate industry wide survey. It has been an assumption/theory of mine that embedded professionals that take the time to research and read authentic market intelligence would produce better and more cost effective design outcomes.

We have examined this comparative data and we present it in Table I.

		Ind ave	EMF Bloggers
	Devel time Months – Start to Ship	13.9	12.5
	% behind schedule	47.0%	38.1%
	Months behind	3.8	3.8
	% cancelled	11.2%	10.9%
	Months before cancellation	4.4	3.7
	SW Developers/project	14.7	9.7
	Total Developers/project	14.7	9.7
	Average Developer months/project	204.3	121.3
	Developer months lost to schedule	26.3	14.0
	Developer months lost to cancellation	7.2	3.9
	Total developer months/ project	237.8	139.2
	At $10,000/developer month
	Average developer cost/project	$2,043,300	$1,212,500
	Average cost to delay	$262,542	$140,437
	Total developer cost/project	$2,305,842	$1,352,937
	Advantage		70.4%

 

                                                    Table I

It is clear from Table I that the EMF Blog readers (that took the time to complete the survey – congratulate yourself if you did and show this to your boss) experienced substantially lower design costs that that of their industry counterparts. One might assume that professionals that take the time to keep current with embedded information would experience better results.

Judge for yourself.

Survey respondents were asked “How close was your final design outcome to your pre-design expectation?” The choices made available were: within 10%, 20%, 30%, 40%, and 50% and not within 50%. EMF believes that design outcomes within 30% represent a good design outcome – and within 20% represent an excellent design outcome. Table II presents the comparison between the groups.

		Ind Ave	EMF Bloggers
	Performance	67.5%	67.8%
	Systems Functionality	70.6%	71.4%

                                              Table II

There is no difference between the groups. What we might deduce from Tables I and II is that although the design choices by our Blog readers were enlightened enough to produce a significant savings in design costs, their ultimate design outcomes were comparable. Of course, the pre-design expectation of the Blog readers might have been higher that that of the industry at large. This is pure speculation – the data does not support the assumption.

Nevertheless, if I was the CEO I’d go for the significant savings.

 

When we look at embedded developer’s issues - what they are doing, what issues are the most disconcerting to them in their embedded developments, and what we can take from changes that we have seen over the past several years - these stand out as emerging trends in an expanding embedded marketplace.

 

In summary:

 

• There has been a shift in the RTOS marketplace from the traditionally powerful RTOSes (e.g., Integrity, VxWorks and LynxOS) to the smaller, highly efficient RTOSes (e.g., ThreadX, Micrium, Nucleus and MontaVista Linux).

 

• Simulation-Modeling (e.g., Simulink, Rhapsody) tools are being used effectively in more designs, driven by code reuse, reporting of application software under conditions of changing of underlying hardware, and by the financial advantages that accrue.

 

• Communication middleware use is changing from RYO to commercially available middleware (e.g., RTI) as the difficulties (and cost of maintenance) of network expansion proved unmanageable.

 

• The use of testing tools is expanding in embedded applications including requirements and change management, validation and verification tools and static and dynamic testing. Companies such as LDRA are successfully integrating many of these tools into a single offering that is interoperable with DOORS and Rhapsody. EMF believes that integration with other tools sets – rather than stand alone tools – is the future.

 

• The use of dual core and multicore processors for embedded designs is growing rapidly – notwithstanding the lack of excellent tools (particularly for symmetric multiprocessing). This need will create a new and substantial addition to the development tools marketplace.

 

It will be fascinating to analyze the results from the 2011 EMF Survey of Embedded Developers to see which trends continue, what markets appear to be in decline and whether new and important market insights appear.

 

As always, we welcome your comments and insights (jerry@embeddedforecast.com)

 

EMF has recently published a detailed analysis of the Mobile Device Industry focusing on best practices and ROI analysis. This paper is available for free download from our website.

 

  Overview: It’s not easy being a mobile device manufacturer today

 

 Profound economic conditions spawn profound opportunities and challenges. As in any economic contest, there will be winners, losers and those that can’t tell the difference. Market uncertainties challenge vendors and OEMs alike to find new niches, competitive advantages and markets that will remain stable while enjoying growth potential.

 

For example, the FCC has recently adopted a regulation that could dramatically improve our wireless devices. The rule offers a brand new and much-improved slice of the radio space for unlicensed use. The new frequencies are known as “white spaces” and result from making available to the public the frequency spectrum previously used by analog TV transmissions. This spectrum will enable greatly enhanced WiFi capabilities which will provide for mile-long connectivity as well as increased and more reliable data handling capabilities. One can imagine the many new and powerful apps that will emerge – most of which will require reusing developed code.

 

EMF believes that this will both increase opportunities as well as risk for mobile device manufacturers. EMF strongly believes that the issues we present in this report are essential to those manufacturers that will dominate this emerging market opportunity. Merely maintaining a growing position in the current expanding marketplace will not be competitively sufficient.

 

As processor costs continue their downward spiral, and as fickle consumers of mobile technologies are increasingly ready to move to more interesting and useful displays and functionalities, consumer-based markets are becoming characteristically disposable. New platforms appear nearly monthly – like quantum particles appearing and disappearing into the void of consumer insanity – characterized by more functional and entertaining GUIs that enable the technologically disadvantaged to easily link to social sites, read email, text and perform acts of information magic that would have made Merlin give up his wand.

 

Points of Pain: issues that mobile device manufacturers must consider to remain competitive

  Read the rest of this entry »

We all can agree that good market information is essential for a company’s growth, competitive and strategic planning and sales support.

 

 

        

       But what is worse – bad information or no information whatsoever?

 

 

 

 

 

 

 

 

I recently read a story about an explorer looking for artifacts along the Amazon River when he happened upon some 50 or more tribesmen each carrying spears. Fearing for his life he cried out “Dear Lord I’m totally screwed”. A dark cloud appeared and a loud voice cried out, “you are NOT screwed – pick up the stone in front of you and kill the chief.” The man picked up and threw the stone hitting the chief in the head, killing him instantly.

The explorer looked up to see more than 50 tribesmen running at him aiming their spears at him. Looking up to the dark cloud, he heard the voice say “NOW you’re screwed!”

 

This is what Dolores and I ponder when we are publishing survey-based market intelligence and using it to address opportunities and threats that confront our subscribers. Giving advice is easy – giving “good” advice based on statistically accurate comprehensive surveys is essential.  

 

We carefully track what we and what others publish and how close each of us comes to correctly forecasting the marketplace. As Dolores is relatively new to our industry, she is finding it hard to understand why market research groups that have been grossly wrong made much more money than we did. Dolores was beside herself asking what happened to those companies that got it wrong. The answer is nothing – newer companies bought their research and the analysts that were wrong found new lines of work. We, on the other hand, have been here for 15 years and plan to be here a lot longer.

 

Before we get to our forecasts, let me provide some background. Perhaps some of you can help me answer some of Dolores’ questions – questions that I wish I could answer. Times have changed since I was on your side of the industry.

 

 A bit of background:

 

Dolores moved from education to the dreaded private sector when we became engaged some 5 years ago. Though having sufficient credits to complete a Ph.D. in performance analysis for validating student progress (skills that would bide her well at EMF), she was already at the highest pay level she could attain and she was more interested in seeing student improvement first hand, rather than theorizing about it and writing papers for her peers.

 

The professional environment in which she performed was union-based and raises were predicated on time on the job, degrees and post-graduate credits – actual performance was not a consideration and tenure was earned in as little as 3 years.

 

Her transition to our performance-based world was easy – she studied hard and attended many conferences and technical presentations over the years, yet her background in data analysis and performance outcomes supported her curiosity regarding how businesses grow or fail based on how they use available information for strategic planning, competitive analysis and sales support. Not only was she able to support my data-mining efforts with her experience, but she is able to ask embarrassing questions of me when she read (and schoolmarmed) my reports.

 

As embedded professionals, perhaps you can relate to the questions she has asked – and maybe provide us some feedback.

 

It usually begins with “I’m sure that this is a stupid question, but …” If I can’t explain it to her, then I probably didn’t think it through sufficiently.

 

Here are some of the many questions that she asks about companies in the embedded industry that I have a hard time answering:

 

1)     Why do companies with very smart people spend hundreds of thousands of dollars on sales development and much less on marketing?

2)     Why to companies that understand the value of marketing for sales and competitive positioning – and spend in some cases millions of dollars in their marketing efforts – spend very little on detailed, relevant and comprehensive market intelligence information?

3)     Why do these very smart people choose to ignore clear market signs (even when made aware of them) that can significantly impact current markets, future revenue streams and company survival?

4)     Why do so many European-based company CEOs micromanage their executives instead of hiring the best and freeing them up to success? Is this a better approach to corporate controls?

 

Forgive what might be construed as a commercial – what really drives her buggy is that she asks me (and not infrequently potential subscribers) “Tell me what I’m missing here; Companies can have access to detailed data that they can use for sales promotion, strategic planning, and competitive analysis for less than one-fourth what they pay for an administrative assistant. Moreover, they can have access to the information that the US military and many prime contractors have about them in order to better respond. Why isn’t someone fired?”

 

 

 What’s on the Embedded Horizon?  EMF’s look at markets that are in transition – creating opportunities as well as threats

 

Looking at Mobile Devices and Consumer Electronics

 

If you are in – or looking to get into – this market segment you will find plentiful opportunities and incredible challenges. New processors and new platforms are appearing regularly and the fickle user base will drop you without hesitation. Now that analog TV signals have gone the way of the Platypus, the FCC is assigning these “white channels” for public use. Herein we will see long range WiFi, and enhanced data handling capabilities that will provide new and dazzling apps that will drive newer markets. Time-to-market will be a crucial consideration, so the ability to reuse code and to apply such code to new interfaces and hardware will determine who will win and who will lose.

 

Do you provide mobile or consumer electronic products or applications? Do you know what processors, OSes and platforms provide better and timelier design outcomes? Does it matter to you? Is your resume up to date?

 

Looking at Medical Devices

 

If we separate medical devices into two cadres; one that supports devices that are attended to by medical staff (ultrasound, CAT scans, renal dialysis, etc.), the other that needs to operate independently of medical support staff (patient monitoring) we see that the same technology that keep military and commercial aircraft operating under secure and mission critical conditions is overkill for medical applications.

 

Did you know?

 

• The medical device marketplace has been growing at a double digit rate – and new considerations should enhance opportunities for embedded vendors in 2011 – IF they take the time to correctly understand the selling points
• Considerable attention has been given to the medical marketplace by vendors seeking a safe haven from the expected decline in mil/aero. EMF believes that many such vendors don’t understand the market segment, how to sell to it, or what the users need and will purchase
• It would be funny if it wasn’t sad that certain leading RTOS vendors are pushing their certified high power, mission critical OSes towards an industry that develops products whose defining frequency requirements are less than 100 Hz
• New CDRH/FDA initiatives are acting to create opportunities and threats.

 

Having brought many products through the 510k process and to market, and understanding the purchasing value system within the medical device marketplace, I am amused at the hundreds of thousands of dollars that vendors throw away on pursuing meaningless approaches to this marketplace. Dolores gets the “everything looks like a nail theory” and it was hard for her to keep a straight face when one colleague who is a vendor’s VP told us that it took them a year (and mucho dinero) to discover that what we gave them for free was correct.

 

The Coming Tsunami

The Aerospace and Defense Industries of the United States are poised to undergo one of the most significant changes since the end of the Cold War; perhaps the most significant since World War II. We believe that observers (embedded vendors included) who expect small changes are mistaken, thereby fostering a false and dangerous sense of security across much of the industry and government.

 

The impact to our economy goes far beyond our current financial problems and involves fundamental structural changes taking place in the industry and in the market. As in prior shifts of this nature, there will be winners and losers – however these shifts may be profound, creating more dramatic winners and losers than in the last cycle.

 

The impact of major primes shifting financial challenges to their vendors (and by association to embedded sub-vendors) will reach down into the value chain, in some cases devastating naïve second and third tier vendors.

 

To make matters more challenging for industry, as spending draws down, the effect on industry will be dramatic beyond the proportions of top line reductions.  This will be caused by a squeeze on the so called “Investment Accounts.”  These Investment Accounts are the funds used for product development and buying equipment.

 

Embedded vendors that offer “high end” OSes and tools will be hardest hit as reductions in DoD discretionary funding and the actions of prime contractors to absorb overhead within the limits of their financial structure.

 

We expect to see reductions in outsourcing to and purchasing from embedded markets defined as “mission critical” and that involve MILS security, DO-178B, and virtualization technologies as these anticipated contractions take place over the ensuing 2-3 year period. Many high-end vendors are already looking to alternative markets to shore up expected reductions – but most lack the data to determine which markets they can competitively serve.

Every year, for the past 12 years, EMF has asked embedded developers to respond to a comprehensive and detailed survey that explores all aspects of their design and development activities in a manner that permits EMF to correlate answers to any questions – or series of questions – with any other question or series of questions. The survey is constructed and conducted in a statistically accurate manner to insure valid interpretations (including the ability to create comparative ROIs between similar product offerings).

 

In 2010, 536 developers responded to the survey resulting in a statistical confidence level of 95% +/- 4.5%. This is extremely important to EMF as many of our subscribers are basing their competitive position by needing to  forecast what chip and OS usages will be two years from now.

 

We can, of course, examine these responses from the perspective of any vendor’s individual operating system (which many of our subscribers do to look at their users as well as their competitor’s users).

 

Year-over-year we ask developers to select from among many alternative responses (we limit each developer to a maximum of 4 responses) to the question regarding which factors are most important to their decision to select an operating system. We also ask what factors would enter into their decision to purchase from either a single vendor or from multiple vendors. We may publish this data in another post.

 

The following table presents comparative responses to the factors regarding the OS selection process for the periods 2009 and 2010. The top 15 responses (out of 33 possible) are presented.

 

	2010	2009
	Industry	Industry
Acquisition cost	44.6%	36.7%
Availability of source code	33.1%	26.4%
Microprocessor support	30.4%	22.9%
Real time performance	29.8%	34.8%
Compatibility with our development tools	27.6%	29.0%
Includes good development tools	26.6%	24.5%
Reliability	25.2%	31.1%
Compatible with Linux	24.1%	17.8%
Availability of perpetual license	22.7%	20.6%
Availability of req. middleware or networking protocols	18.1%	14.3%
Availability of professional services	16.7%	12.1%
Host platform support	15.0%	15.0%
Quality of support	14.4%	19.2%
Royalty cost (production licenses)	14.2%	9.8%
Must be open source	13.4%	10.7%

 

The lists are comparable between 2009 and 2010 with “realtime performance” and “reliability” taking the steepest drop (but remaining important nonetheless), and “Linux” compatibility “microprocessor support” and “source code availability” being the largest gainers.

 

This bodes well for the Linux community. Such items as “safety certifiable (DO178B, etc.)”, “visualization” and ““security certification (NSA, Common Criteria)” received middle single digit response levels.

 

We have seen this result for many years – and, due to the proliferation of communications and consumer devices, this is why we have forecast the growth in ThreadX, Micrium, MontaVista Linux and Nucleus use. These OSes have been deployed in hundreds of millions of devices worldwide. Unless the application calls for a MILS level certification, alternative OSes are being used in place of the high power OSes of the past.

Comparing Modeling Design Outcomes with Comparable non-modeling Design Outcomes

 

 

 

 

In a soon to be published EMF white paper, cadres of comparable design outcomes were developed between developers that used MBD tools and those that didn’t. Cadres were established worldwide, for North America, for Asia, and for Europe.

 

In addition, specific analyses were conducted for MBD and non-MBD cadres for Telecom/Datacom, Medical, Automotive Transportation and Industrial Automation application markets.

 

 

 

Total Cost of Development calculations were conducted using:

• Number of software and hardware engineers per project
• Time from design start to product shipment
• Percent of designs cancelled and the number of months elapsed before cancellation
• Percent of designs completed behind schedule and number of months behind

 

The following table summarizes EMF’s findings. For comparison, the cost per developer man month was chosen to be $10,000. Clearly, this dollar value is high for Asian developers. However this value was chosen for internal geographic analysis only – to establish whether MBD provided an advantage or not. These values are not to be used to compare, for example,  Asian costs with European costs.

 

				MBD
		Non-MBD Cost	MBD Cost	Advantage
	North America	$3,921,519	$3,153,452	24.4%
	Europe	$3,744,894	$2,722,134	37.6%
	Asia	$10,189,266	$3,374,067	202.0%

 

Looking at worldwide developments (that is interrogating the entire database irrespective of geographic considerations), the following table summarizes the EMF findings.

 

	World	World Industry
	Industry MBD	Not MBD
Devel time Months	13.4	13.1
% behind schedule	44.3%	49.9%
Months behind	3.7	3.7
Ave Delay Months	1.63	1.83
% cancelled	10.1%	12.1%
Months lost to cancellation	4.2	4.7
SW Developers/proj	11.0	16.3
HW Developers/proj	8.9	10.9
Total project developers	19.9	27.2
Average Developer months/project	266.2	358.1
Developer months lost to schedule	32.4	49.8
Developer months lost to cancellation	8.5	15.5
Total developer months/ project	307.1	423.4
At $10,000/developer month
Average developer cost/project	$2,662,098	$3,580,843
Average cost to delay	$323,977	$497,835
Total developer cost/project	$2,986,075	$4,078,677
	MBD Adv	36.6%

 

It is interesting to note that in every analysis, regardless of the cadres used (i.e., each vertical or geographic comparative breakout), MBD projects used fewer developers. When analyzing cost overruns (i.e., the number of developer months lost to cancellation or late completion) to total project developer months, the percent of cost overruns to total project developer months was less for MBD in every analysis.

 

EMF suggests that this data shows that the advantages in using simulation-modeling as a design methodology are real and that these practices will be adopted for reasons not only related to design outcomes, but for financial ROI reasons as well.

You Better Design Right, You Better Not Fail, if You Don’t Follow These Guidelines Your CEO’s going to Jail; The FDA/CDRH is Watching You Now

(Sung to Santa Claus is coming to town)

 

Yes indeed – and it’s about time.

The FDA’s Center for Devices and Radiological Health (CDRH) reported that in 2006, 21% of all medical device recalls were for software defects – it is also estimated that one-in-three software-based products is recalled. They haven’t updated this data since, but one can assume that it might have gotten worse.

Medical device developers and company CEOs should be aware that this is an unacceptable situation and that it is going to rapidly change. Those that don’t get it straight won’t be around when the dust settles.

Is there enough aspirin to relieve the headaches that our government is giving medical device manufacturers? Moreover, is it deserved? The answer – depending on the specific question – is yes and no.

The Obama administration under pressure from Congress has combined the medical device industry with the drug industry as one, and has proposed taxing both industries to pay for universal health insurance (Obama Care). Hopefully thoughtful senators and representatives will see that these taxes will be passed down to patients and other users and will also impact the elderly who most require such devices and can ill afford them – then again it is more realistic to depend on the Easter bunny. But logic is no relief for the headache – particularly when it comes to Washington politicians. It’s no fun being a medical device executive today.

On July 31, 2008 a Senate Bill cosponsored by Senators Edward Kennedy (D – MA) and Chuck Grassley (R– IA) was filed that  would require senior officers or directors of drug and medical device companies to certify under penalty of perjury that all information submitted for a product’s approval is accurate and in compliance with federal regulations.

The Drug and Medical Device Accountability Act Bill expired at the end of the two year Senate session on December 31, 2008, but was refiled in the Senate (2009) with the hope of amending the current legislation by the end of October 2009. This is an important piece of legislation, and medical device executives should get their house in order to accommodate the provisions.

The Bill provided that product applications later found to have contained false or misleading information would be subject to stiff fines (up to $5,000,000), assessed both to companies and their senior officers, who, in addition, could face jail sentences of up to 20 years. These are serious issues. Currently the CDRH has a forensic group that looks at device software only after a device has been recalled.

This is a bad time, and a very costly time (regardless of the Act) for a medical device manufacturer – particularly if software development hadn’t been given the detailed oversight of using best practices. The new Obama tax on medical devices – used to pay for Obama Care – is allready a blow to the industry and to smaller medical device manufacturers.

The “Drug and Medical Device Accountability Act” will change the medical devices industry similarly to how the Sarbanes-Oxley bill impacted corporate accountability. Laws being what they are, we should expect overkill from its enactment. This is why medical device company’s senior management should take time to rethink their strategic approach to the delivery of their products.

EMF has available a report presenting alternative paths for developers to produce quality software for medical devices, minimize product recalls, and affordably provide comprehensive audit trails for CDRH inspectors (Critical Issues Confronting Medical Device Manufacturers). Keeping the company alive and your CEO out of jail are bonuses.