In a fully connected and networked world, very few limits remain. Today, products have such an advanced degree of intelligence that companies should be able to seamlessly ensure their continuous optimization into the future, in a dynamic environment where the organization’s entire internal processes are also aligned accordingly. Practically speaking, this is the only way to create ecosystems that are fit for the future. Very often, however, we see super-cool front-end solutions accompanies by back ends and supply chains that have not been similarly adjusted. Nor have internal processes or mindsets been adapted in line with this NEW way of thinking and working. This is a key challenge facing many industries at this pivotal time.
In short, the supply chain and, by extension, the value chain will only improve if a product can become an agent of change for a company. In this transformative scenario, traceable conclusions, new technologies and networked value chains will be highly visible and processable.
Today, we frequently see situations where lots of great new ideas are generated within an organization. More often than not, these are excellent initiatives, driven and backed up by a wealth of technology. However, they frequently fail because the product’s backbone ─ its supply chain, value chain, PIM system and ERP ─ haven’t yet been adapted to the NEW. How often do we see scenarios where the really demanding interactions have been done well but, in the end, the momentum falls away completely in sales, ordering, trading or development because processes are not properly linked together? It is only by adapting the entire value chain, either simultaneously or sequentially, that a positive overall impression of moments of real achievement (I call them our “happy moments”) can be made tangible to the customer.
I’m noticing more and more that a growing number of medium-sized companies in particular, which arguably have the most to lose from this failure to adapt, end up mired in what I call “actionism”. New incubators are started, innovation companies are brought in to advise and internal processes for the NEW are created. That’s all well and good but they are rarely sustainable in the medium term, because each individual function operates as an ‘island’ and is not networked in the overall context of the system.
I often focus my discussions on future readiness ─ in other words, how well prepared is a company to master a connected and agile future?
It’s not a question of simply building a tool but of understanding the entire process chain in order to transform the company.
A new product portfolio with services or offers that are being developed in dialogue with users faces enormous challenges. The entire initiative needs constant improvement which can then be integrated into an iterative development process in an agile way.
Today, this agility is really only possible in software but tomorrow it will also be feasible in hardware, as capabilities like generative manufacturing processes, flexible logistics, and robotic and autonomous systems come into their own. In my experience, placing a service as an add-on to hardware only makes sense if it improves the end product and does not increase complexity, which is almost always the case today. But this connected complexity must be mapped across the company in order to understand the changes that are taking place. Otherwise, services end up creating a negatives experience for all concerned if there is no feedback, correction or iterative improvement at all.
New, smart, connected organizations that understand how to translate their value proposition into digital services have a great future, primarily because they continue to learn and improve constantly in order to deliver the best experience at each client touchpoint.
At the end of the day, it’s not about delivering the perfect product in one go ─ it’s about continually improving it by connecting a sequence of interlinked happy moments.
Some final thoughts…
For many companies, failure to move quickly to adapt to the “new normal” could mean death. Current events have revealed very clearly the companies that have overslept their alarm call to move towards digitalization. At this stage, it is almost too late to make up for lost time, so it is absolutely critical that companies act now to ensure they don’t fall even further behind.
The initial change is painful, exhausting and laborious, but the subsequent steps are undoubtedly easier. We made the choice to partner with Accenture ourselves because we could no longer work with the outdated logic of the invisible layers ─ PIM, BIM, ERP, supply chain, etc. ─ where every change we made was only a partial success.
Now, however, we can move forward and successfully support our customers across the entire design process.
Working closely with our clients to re-invent new, connected products and solutions enables us to develop new business models and user experiences, improve operational efficiency across the product value chain and accelerate time to market, while infusing security and resilience throughout the whole development and support lifecycle. In short, we now have the opportunity to really help companies that are facing the challenge of integrating their products into a digital environment.
But this integration is often done the wrong way round: companies try to adapt their digital services to a finished product, not the other way around. So it’s not a holistic system, but an extra service that is neither iterative, organic or integrated. As an example, I often use Alexa from Amazon. Alexa complements the Amazon system and is part of its overall service ─ not vice versa. First the service, then the product. That is how it should be.
As a counterpoint to Alexa, consider all those automobile companies that think up crazy extra services for their basic product, so that they can sell them additionally. This approach to transformation simply won’t succeed. We will always use cars for the same primary purpose we did a hundred years ago ─ as a means of getting from A to B. Any notion of autonomous driving, parking apps, charging apps or any other service is simply not important initially, because our main aim in buying a car is already fulfilled by the car itself. So why should I pay for additional services from an OEM if I can already get these somewhere else? It’s the same with so-called ‘smart’ homes. Why should I pay for a service as part of a home appliance that doesn’t give me any added value and that I can already get for free online? As long as industries refuse to change their mindset and insist on selling services as an add-on to their core product, their attempts at transformation will fail.
I look forward to an exciting dialogue around these subjects and I hope you will let me know where you agree with my analysis or point out where you think I am going wrong…!