Our world is under a major change: from selling products to providing products as part of a complete service.
Pay-per-use is becoming commonplace.
In the outcome economy companies will further shift from selling products and services to competing on delivering measurable results, which bring value to the customer.
The outcome economy will require many new capabilities from the businesses besides a need to be able to identify customer value.
What? How?
In the outcome, economy organizations must track the factors required to deliver the promised value. They must be able simulate their financial opportunities and manage risks within a complex business setup. Companies and ecosystems will need to be connected to data and software to drive value delivery and value monetization.
The digital age makes the outcome economy possible. The outcome economy will require changes in business processes and business models.
Outcome Economy service providers will need to deploy technologies to track and measure performance against specific metrics in real time.
The Internet of Things (IoT) sensors, data, condition sensitive automation, analytics, and the networks connecting all these elements allow organizations to collect and analyze how their services and products perform.
Processes must be designed to provide the promised services accurately and timely and to take action in real time if services aren’t meeting the metrics.
The further intelligent automation is taken, the better the maturity for outcome economy. Therefore, end-to-end automation is foundational to outcome economy.
End-to-end digitalization refers to the digitalization of the whole business process. Are organizations able to carry the whole process through digitalized and automated functions?
Example from the IT industry:
When a customer buys more disk space from a cloud vendor, they may click an option for, for example, 10 Terabytes of disk space in an online store. An automated process takes off, and before the customer even realises, the disk space has been configured for use, and his account has been billed.
On the next level, the customer may always use what is needed, and a completely automated usage-sensing process takes care of allocating space and charging for the used amount based on a (digitally ) dynamic contract.
Example from Industrial / Maintenance services:
If run time data reveals time for maintenance or a sensor detects a broken part, an overall digitalized process chain should get started, and the issue should have an automated process for ordering the replacement parts, delivering the order, and billing the customer. Only then is digitalization utilized from the beginning of the process until the end of it, even right through the financial settlements like billing and revenue recognition.
Even if the processes and the devices are already smarter than ever, they still too often kick off a chain with semi-manual people dependent tasks. This takes time and resources, and the possibility of an error increases with every link in the chain.
Such processes also do not scale well.
Processes must be driven towards intelligent automation to enable the outcome economy. What we need, is to achieve end-to-end automation in all industries.
Outcome Economy refers to selling customers an outcome i.e. the measurable results that they are looking for—rather than selling them a product that may help to achieve that outcome.
To monetize customer value, service provider must have three things in place: (1) you know the outcome a customer wants and (2) you have the orchestration technology and data access that’s needed to achieve and verify that outcome, and 3) your business support software has the capabilities to compose new pricing models utilizing new service usage and outcome data elements.
Manufacturing Performance Days 2017 (MPD 2017) is an international top level B2B summit which will be organized for the sixth time in May 2017. The Summit programme is based on invited presentations of internationally recognized experts representing top class industry and academia equally and worldwide.
This year the topic is "Towards Outcome Economy". MPD 2017 will dive beyond the hype of digitalization, discussing the business models, earning logic, customer value creation and industry’s other business success factors in the new digital age.
Good Sign Solutions will be attending the summit and Janne Kivilaakso, our Lead Consultant specialized in Service Digitalization and Industrial Internet, will give a presentation on "Monetizing Customer Value" on Wednesday 31st of May.
For more information about the MPD summit, refer to the organizers website.
A paradigm shift in the business model requires a paradigm shift in system capabilities.
Our customers create new business propositions, automate service fullfilment functions and financial transactions with our Services Growth Platform. Good Sign’s Software can also provide a digital layer to orchestrate the legacy system architecture as automated, efficient and scalable as the born-digital service providers.
Want to learn more? Contact us to discuss how to move from yesterdays' solutions to flexible new business models friving end-to-end digital processes.