Hold your horses just for a minute before digitalizing your service business!

by Taru Hakanen and Pasi Pussinen

Digitalization offers immense opportunities for making your service business bloom. It brings new channels for reaching your customers, interacting with them, and involving them in service co-creation. Whether it is a matter of the Internet of Things (IoT), the industrial internet or any digital solution, we all want to win this race. However, before rushing into purchasing a number of new gadgets, sensors and applications, take a minute and think through: where exactly you are heading with digitalization?

The five questions below guide you to find the very core of your business development aims and provide examples of the ways that digitalization can help you in achieving those:

Discovering new markets and customers?

  • Acquiring customer knowledge (e.g. CRM, marketing information systems, IoT for user data collection)
  • Analysing and interpreting customer knowledge (e.g. CRM, analytic tools)
  • Increasing the visibility of own company and services (e-marketing)

Renewing and designing attractive service portfolio?

  • Collection of new ideas from customers and other stakeholders for service innovation (e.g. co-creation platforms, social media)
  • Complementing service portfolio with new digital services and ‘smart’ products (e.g. smart IoT solutions)

Increasing sales and the efficiency of sales processes?

  • Utilizing digital sales tools and solutions (e.g. CRM, digital visualisation)
  • Exploiting digital sales and marketing channels (e.g. online shopping, social media)
  • Collecting sales leads from the customer interface (e.g. IoT technology for machine condition monitoring, mobile solutions for service personnel)

Designing cost-efficient service processes?

  • Efficient management of internal and customer resources (e.g. ERP-systems, resource management software solutions, mobile solutions)
  • Designing self-services and remote services (e.g. online training, real-time monitoring and remote problem solving with IoT)
  • Online shopping and digital distribution channels

Enhancing customer satisfaction and creating positive customer experience?

  • Real-time reporting for customers and future forecast
  • Implementing new channels of customer interaction in service co-creation (e.g. co-creation platforms)
  • Enabling multiple channels of customer feedback (e.g. social media)

All of the above business aims are undoubtedly salient in service business. But as we all know, we have to start somewhere and prioritize our decisions and actions, especially when significant development investments are involved. When you have a clear vision of the drivers for your business success, selecting adequate digital solutions also becomes easier!

Fimecc S4Fleet programme: https://www.fimecc.com/content/s4fleet

Betting on the new horse in Finnish metals and engineering industry: user experience as a business driver

By Hannamaija Määttä, Maaria Nuutinen and Maarit Halttunen

How to get the entire organisation on board with UX? Lessons learned from the FIMECC UXUS programme.

Five years ago, some of Finland’s metals and engineering industry companies decided bravely to bet on the new horse and embarked on an expedition towards user experience driven differentiation in the FIMECC UXUS programme. This post aims at illuminating one of the main conclusions of the programme: in order for companies to truly benefit from user experience (UX), a cultural transformation is needed throughout the organisation. All units have to adopt a user experience -based innovation and business logic, a UX-mindset. This hidden part of organisational culture exists within organisational structures, management styles and daily practices as well as in the attitudes towards renewals. Adopting a UX-mindset enables the transition from a strongly technology and product-oriented company towards a more customer and user value-oriented company, which is also needed when aiming to fully utilize UX-based competitiveness potentials.

In the beginning of the FIMECC UXUS -project, getting the UX message across to the entire organization was considered as a great challenge by the participating companies. Many times, UX was seen as the responsibility of a design team or an R&D team. In other words, UX was understood to be something extra to be included in physical products, not a shared philosophy or mindset guiding the organization’s business operations. One of the greatest challenges was to get sales people on board, as they were distant from R&D and did not participate in the development of UX-products. Connecting UX goals to an organisation’s larger goals is important when aiming to make all employee groups participate in adopting a UX-mindset. When UX is visible in the organisation’s brand or strategy, it is also acknowledged inside the organisation, and its meaning is easier to understand and its benefits are more clearly seen by all. Having UX on the management’s agenda is thus crucial. Special attention should be given both to the actors involved in product development and to those collaborating closely with customers.

One of the key prerequisites for adopting a shared UX-mindset is that all employees in the organisation should understand how they can provide good experiences through their own work. It is crucial to get people talking about UX by building experiential forums that enable stronger collaboration with customers and users, and within the organisation between different units. During the Fimecc UXUS programme, the participating companies discovered that various different means can be utilized to strengthen the UX-mindset:

  • KONE’s People Flow Day, an experiential training event for employees:
    • An event organized every year to help all employees better understand what the UX –based strategy of KONE means. The event is designed to bring the employees normally not connected to UX-issues closer to the users and customers by acting as researchers, talking to customers, interviewing the public, making on-site observations and filling in questionnaires. Through this event, KONE supports the mindset transformation from product-centric thinking to experience-based thinking within the organization.
  • Konecranes’ field study methods:
    • Field studies are utilized as a method to support the holistic understanding of the customers and users and of the contexts they operate in. The field studies are conducted by R&D people, who interview and observe customers and users at customer organizations. Disseminating the knowledge gained increases the awareness of what UX means in the context of various customers and markets.
  • Rocla’s internal collaboration between R&D and marketing and communications:
    • The interaction and collaboration of R&D and marketing has been strengthened by integrating the two units. They work closely together and through the collaboration ensure that marketing people understand the technology behind product features and that the R&D people’s thinking is based on user-benefits, not only technical features. Through co-creation, specific messages and tools for different touchpoints can be created (for example in sales situations) that bring out the UX features essential to products.
  • Metso Automation’s visualisation and storifying:
    • To spark discussion and enthusiasm towards UX, Metso Automation utilizes visualisation and storifying: stories from users, videos from user environments, illustrated concepts and prototypes of future tools are efficient ways to arouse discussion around UX. The prototypes and visualizations build an innovation environment where the whole organization, developers, customers and users, can discuss the present and future products.

Now, at the end of the FIMECC UXUS programme, the time has come to claim the prizes. If you wish to learn more about how the participating companies have succeeded in making UX a competitive factor in their business, browse through the presentations at the final seminar, see the videos and booklets – and familiarise yourself with the final publication that will be published November 17th 2015.

If you also wish to learn more about the results from other Fimecc –programmes, register to the 8th annual Fimecc seminar held November 17-18, 2015 at Oulu:

http://www.fimecc.com/sites/www.fimecc.com/files/FIMECC_Annual_seminar_program_2015.pdf

References:

Määttä, H., Nuutinen, M: & Halttunen, M. Adopting a UX-mindset – means for getting the entire organisation on board with UX. In: User experience and usability in complex systems 2010-2015. Final Report 1/2015, Fimecc publications series 8, Tampere, 2015.

Heikkinen, M. and Määttä, H. (2013): “Design-driven product innovation in enhancing user experience oriented organizational culture in b-to-b organisations”, presented in Tsinghua International Design Management –conference 1.-2.12.2013

Nuutinen, M., Heikkinen, M. and Määttä, H. (2013): “Evaluating the levels of design management in user experience-oriented companies –experiences from Finnish metals and engineering industry”, presented in the 2nd Cambridge Academic Design Management Conference, 4.-5.9.2013 http://www.cadmc.org/CADMC2013Proceedings.pdf

Nuutinen, M., Seppänen, M., Mäkinen, S. J. & Keinonen, T. (2011). ”User experience in complex systems: crafting a conceptual framework”. The 1st Cambridge Academic Design Management Conference, University of Cambridge, 7 – 8 September 2011, Institute for Manufacturing (IfM).

Lost in Network? Network picturing as a tool in dynamic network management

By Tiina Valjakka and Katri Valkokari

This post illustrates how picturing networks from different actors’ perspectives affects the network management and facilitates the building of new connections. It is based on a paper we presented last month in the IMP 2015 Conference in Kolding, Denmark. The aim of the paper is to extend understanding of strategic management in dynamic business networks, especially from the viewpoint of SMEs operating in a B2B context.

moniverkosto

Firms are simultaneously acting in various networks in different roles (see picture above).  Each of the actors has its own perception of the network and its position within it. Managers’ understanding of perceptions across boundaries is a key to a firm’s success in networked business ecosystem, where knowledge and resources are dispersed and value co-creation requires integration of resources. Drawing from the management point of view, our preliminary research question was: How to picture and combine the different network perspectives in order to better manage the business network?

Network pictures can be seen, and utilized as:

  • Business actors’ subjective mental frameworks of their surroundings, and thus as sense-making tools that underlie decision-making in networks
  • a tool used by researchers and practitioners to grasp actors’ understanding of their surrounding business network(s)
  • boundary-spanning mechanisms which serve as an interface between different organizations

In our case study, we utilized network picturing as a tool for strategic management in a SME. We first draw two focal company perspectives; factory and sales, identified their most important connections, and described the roles and content of interaction with these first-level partners. The other network perspectives depicted were end-users’ network pictures from different customer segments. These network pictures, snapshots from different network actors’ perspectives, were then utilized for drawing the network management perspective. Network picturing resulted in the identification of new relevant network actors and needs for building connections to them.

The managerial challenge is to guide the development within business networks. Often, companies anchor themselves to a single vision of their customer needs and network structures, which may preclude considering the viewpoints of other network actors. Many businesses have a complex nature, and network picturing gives a possibility to see beyond the most obvious and traditionally closest actors. Our study highlighted that in order to act as a change driver in their business environment, a SME must have broader connections than the relationships with the direct customers and suppliers.

Reference

Valjakka, Tiina; Valkokari, Katri; Kettunen, Outi. 2015. Utilizing network picturing in the management of dynamic networks. IMP Group. 31th Annual IMP Conference and Doctoral Colloquium 2015 “Organizing Sustainable BtoB Relationships – Designing in Changing Networks”, 25 – 29 August 2015, Kolding, Denmark.

How SMEs Can Manage Their Networks – Lessons Learnt from Communication in Animal Swarms

By Katri Valkokari and Pasi Valkokari

Ants, wasps and bees are known and studied because of the amazing efficiency of their collective efforts. Therefore, the current debate on business ecosystems inspired us to question if network management could learn from the ‘swarm intelligence’-based activities of animals. The interaction between business organisations is at the heart of the network approach as well as interaction of individuals in animal swarms. The fundamental managerial issue in building and renewing business networks is how to operate as a network, i.e. how small and medium-sized enterprises (SMEs) can ensure that all network actors do their best for the network and not only for themselves.

SME cannot manage the network like the alpha male or the queen bee, which controls the swarm and expects other network members to follow their given roles. There is still an opportunity for the SME to manage the network as a swarm of equals and to communicate its visions of the common best in order to commit to the other network members. Our recent research suggests that different managerial tools – such as network mapping, business models, partner evaluation and LCC tools – can be utilised as communication means also by SMEs (Figure). In other words, these tools serve as boundary-spanning objects supporting shared sense-making between network members.

Framework_blog

In line with the lessons learnt from the collective efforts in animal swarms, we suggest that SMEs can manage their business networks through communication, which is based on understanding of interests and expectations of other network actors. Anyhow, the question considering network level common evaluation still remains unsolved and we hope that our study will encourage further empirical research on applying new thinking to business networks and their management.

Reference:

Valkokari, Katri & Valkokari, Pasi (2014) How SMEs Can Manage Their Networks: Lessons Learnt from Communication in Animal Swarms, The Journal of Inspiration Economy: An International Journal. Vol. 1, No: 1, pp. 111 – 128 Link: https://journal.journals.uob.edu.bh/Article/ArticleFile/844

Integrating services, the universe and everything, part 3

By: Tiina Valjakka and Katri Valkokari

No matter how excellently a network works, it will lose its competitive edge if it lacks the ability to renewal. The central question from the perspective of an integrator is how to utilise the innovation potential of the entire network?

A network can renew itself both by identifying new potential partners and utilising the existing resources in a new way. Switching roles from the integrator to the integrated is one way of renewing a network (see previous post). Networks are alive and their borders are not static, and typically the actors belong to several networks. For this reason, the integrator should find a balance between integrating the operations of the current service network and the freedom of the network actors, in order to maintain the attractiveness of the network.

Knowing the network and attracting the best partners

“The key to success is that you really know the customers and your network. It’s a demanding task but only that way you are able to develop the business”  – Mervi Heino, Managing director, Arpré Oy

Companies develop and grow through the right partners, and therefore the criteria for partnership and the means of attracting the best partners in your network are crucial.  The attractiveness of a network can be enhanced by, e.g., having ready customer contacts; a well-defined operating model; and the opportunity to develop and boost the business operations of each network actor as a part of the larger whole. The network capability of an integrator also includes facilitating the internal interaction between the different levels and actors within the network, and enabling the development of its network partners. Knowing the network helps in identifying new business opportunities. Efforts can be made to better utilise network’s innovation potential: Analysing the network as well as the network relationships supports the development of new ideas and creates new opportunities for interaction.

 

The Cloud and many facets of value

ValueBy: Kaisa Koskela-Huotari and Andrey Sirotkin

The word value has been used lately a lot in the discussions related to business and the Cloud. What do we, however, mean by value in this context? Roughly, one can argue that the concept of value has evolved into two quite distinct meanings [1]. Firstly, value is used to portray ‘goodness’ of something physically external to a person. This something can be another person, a product, an activity or anything else. Secondly, the concept of value can also describe ‘goodness’ as determined by an individual personally and culturally, and in an ethical sense. Usually in this meaning the plural term – values – is used.

Value (of something) and the Cloud

There are three ways to discuss the concept of value (of something) [2, 3, 4] and the Cloud.

The first one is the value-in-exchange perspective, where the focus is on outputs. Value is seen as something created by companies in their production activities and embedded in company outputs such as tangible products. Therefore, value is measured by the exchange transaction and is equal to money. In the case of the Cloud this perspective would mean e.g. that a Cloud-based service would be regarded valuable on its own – without being used by someone. We would be more worried about what our sales numbers are than do our customers perceive our service beneficial or not.

The second, value-in-use, perspective provides a very different view on value and value creation. Here, the attention is focused on the process of use, and the locus of value creation shifts from the producer’s end to the customer’s end. Hence, value is seen as something that emerges as a person uses or applies a resource provided to him/her by somebody else. For a Cloud-based solution the value-in-use perspective would mean that we would view the solution valuable only when someone is using it – e.g. to share photographs with family and friends – and therefore perceiving the service valuable for him/her.

The third value-in-context perspective can be seen as an extension of the value-in-use perspective. In this perspective value is seen as an experience. This experiential view on value implies that the perception of value is not a linear, cognitive process restricted in isolated events of use but an iterative and circular process including both lived and imaginary experiences as well as individual and collective dimensions. The value-in-context perspective for a Cloud solution would mean that we acknowledge that the value of a service does not remain the same for the individual using in, but that the perception of value constantly alters as the time, place and context of use changes, and also that the perception is influenced by social interaction.

When tapping into the potential of the Cloud it is important that we take into consideration all the different perspectives on value (of something) as they all provide us important information on how we can create solutions that are beneficial both from the business’ and customers’ perspective.

Values as beliefs

A concept of human values is different from that of value (of something). Human values are principles and beliefs that people use to evaluate goodness, fairness and the legitimacy of experiences. Human values are defined in axiological sense. These values are beliefs that people hold in aesthetics (e.g. beauty, harmony, goodness) and ethics (e.g. right, wrong, fair, legitimate). What makes values especially interesting in business studies is their motivational character. Values guide individuals’ choices, evaluate behaviour, and provide meaning to experiences (e.g. [5], [6], [7] and [8]).

Although values are abstract concepts, they are practical for understanding customer experience. By understanding we mean an ability to find reasons or explain meaning. Regardless of whether such explanations are rational or irrational they contain cues for companies for what experiences customers may value. When customers have difficulty with anticipating what future product and services they will value (in terms of goodness of something), they can describe their view of reality in terms of desires and values. Thus, values can be a very useful source of information about customer experiences.

Because values are remarkably stable and resistant to change even in dynamic environments, they may serve as a vector of strategic differentiation. That is, a strategy can be intentionally focused on the perceived value of experience, which is a key differentiation factor. Values, for example, can be used to describe customer desired experiences, which, in turn, can be disseminated throughout the organisational processes. As a result, values bring together strategy, marketing and development functions in a unified effort of staging an experience that customers will value.

This posting is modified and shortened from the original article. To see the full version and to read about more about our research in the Cloud context, check out the newest edition of VTT Research Highlights – Value-driven Business in the Cloud.

References:

[1] Ng., I.C.L. & Smith, L.A. 2012. An Integrative Framework of Value. In Vargo, S.L. & Lusch, R. F. (eds.) Special Issue – Toward a Better Understanding of the Role of Value in Markets and Marketing. Review of Marketing Research, Vol. 9. Emerald Group Publishing Limited. Pp. 207–243.
[2] Vargo, S. L., Maglio, P. P. & Akaka, M. A. 2008. On value and value co-creation: A service systems and service logic perspective. European Management Journal, Vol. 26. Pp. 145–152.
[3] Chandler, J. D. & Vargo S.L. 2011. Contextualization and value-in-context: How context frames exchange. Marketing Theory, Vol. 11. Pp. 35–49.
[4] Helkkula, A., Kelleher, C. & Pihlström, M. 2012. Characterizing value as an experience: implications for service researchers and managers. Journal of Service Research, Vol. 15. Pp. 59–75.
[5] Boudon, R. 2001. The origin of values: Sociology and philosophy of beliefs. New Brunswick, New Jersey, USA: Transaction Publishers.
[6] Kahle, L.R. 1996. Social values and consumer behavior: Research from the list of values. In Seligman, C., Olson, J.M. & Zanna, M.P. (eds.) The psychology of values: The Ontario symposium, Vol. 8. Mahwah, NJ: Lawrence Erlbaum Associates, Pp. 135–151.
[7] Schwartz, S.H. 1992. Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. Advances in Experimental Social Psychology. Vol. 25. Pp. 1–65.
[8] Rokeach, M. 1979. Understanding human values: Individual and societal. The Free Press: New York