The 2012 U.S. election is now history, and Washington is beginning to refocus from stump to legislature. While the fiscal cliff and automatic spending cuts (sequestration) that politicians argued about may be averted, we would do best to prepare for the worst-case scenario. Imagine if existing programs (like military spending) are reduced in scope or even cancelled. If this occurs, product development organizations need to prepare by identifying how they can maintain margins when the top line is reduced.

When we think about the product development process for defense technology, we see extensive use of physics-based simulation. Using physics-based simulation makes the product development process significantly more efficient. However, these tools sometimes lead organizations to focus only on products features, benefits and costs — yet, on the other hand, to simply accept inefficiencies in how these products are used as a “cost of business” or “departmental overhead.”

In the long term, inefficiency costs an organization orders-of-magnitude more than the cost of physics-based simulation tools. As the potential fiscal cliff looms, these engineering simulation process inefficiencies must be addressed as part of diligence into operational cost savings. In my conversations with executives in the defense community, key areas of process inefficiency include poor interaction and data exchange between engineering disciplines, a failure to re-use simulation data and knowledge across the organization, and a failure to invest even modest amounts in developing skills of the end-user base.

So I ask, as you prepare for the worst-case scenario, are you investigating how to really move the needle on operational cost by addressing process inefficiencies, or are you simply looking at your software renewal quote? The reality is that with or without the impending cliff and sequestration, as a physics-based simulation software community, we can do things today and tomorrow to reduce the organizational cost of business, to become more profitable, to be more competitive, and to operate a more sustainable product development process. And this means we have to think outside the box, well beyond software products.