Managing Actors, Resources, and Activities in Innovation Ecosystems both at the inter-organisational and the interpersonal level

By Katri Valkokari and Tiina Valjakka

Only around a third of innovating companies drew on external development or knowledge sources within their innovation process. Therefore, there is a huge potential in innovation ecosystems that are able to integrate diverse actors for collaborative innovation. This was a key motivation of our study on two emerging innovation ecosystems, in Finland and Italy. We studied how actors in a network create and sustain competitive advantage independently and through participation in an innovation ecosystem. The concept of innovation ecosystem was used to capture the dynamic, temporary and networked assemblage that enables collaborative innovation.

Our main research question, ‘How are the innovation ecosystems created and managed – and by whom?’, was broken down into three sub-questions: 1) Who are the main actors in an innovation ecosystem? 2) What kinds of resources are needed to integrate key actors in an innovation ecosystem? 3) What are the key activities of the various actors within the innovation ecosystems? There were both similarities and differences between the two innovation ecosystems. Results (similarities) in a nutshell:

  • Actors. The participants recognised that in the ecosystem composition phase, it is important to confirm the involvement of a broad spectrum of actors, while membership dynamics (i.e., entry and exit of actors) were emphasised in the orchestration phase.
  • Resources and roles. Both cases show that public organisations can have the role of a keystone in innovation ecosystems. Furthermore, more than one actor may act in this kind of role, but no one can own the ecosystem.
  • Activities.For both ecosystems, the participants suggested that having various kinds of joint activities – such as joint discussions and operations – and shared resources was critical. In this connection, face-to-face discussions and networking via development forums were considered to be important for increasing commitment. Developing clear joint rules was seen as an especially strong way to increase trust in a situation wherein the relationship does not necessarily have a long history.

The findings highlighted that management needs and governance possibilities in innovation ecosystems differ from those in direct business relationships.The results were summarized as a collaborative model for innovation ecosystem management (Below).  araproveRecognising the resources of actors was a starting point for a negotiation process aimed at balancing out the self-interest of the actors involved. Accordingly, the practitioners pointed out that, in addition to their resources, it is important to understand the roles of actors. The role, which is closely linked to the relevant actor’s business model, affects what resources that actor is ready to bring and on what kind of terms. Finally, portraying the key activities of the various actors within the innovation ecosystems proved to be the most case‑specific element and depended on the goals of the development programme.

Relationships between actors proved to be the primary mechanism for managing in the innovation ecosystem. Also, in order to manage actors, resources, and activities, it is vital for actor organisations to find a balance between the interests of the individual actors involved and motivate the actors to put effort into the joint activities and the whole ecosystem. This requires understanding and managing both the inter-organisational and the interpersonal level at the same time.

Valkokari, K., Amitrano, C., Bifulco, F. and Valjakka, T. Managing actors, resources and activities in innovation ecosystems – a Design Science Approach. PRO-VE 2016, 17th IFIP Working Conference on Virtual Enterprises, Porto, Portugal 3-5 October 2016.

 

How servitization changes global B2B distribution?

by Taru Hakanen (VTT), Nina Helander (TTY/VY) & Katri Valkokari (VTT)

Servitization development increases the scope of intangible assets in the offerings of manufacturers and increases the importance of customer interactions and ‘customer closeness’. At the same time several manufacturers rely on intermediaries such as agents, distributors, dealers and service providers in order to reach their business customers around the world. However, servitization development may influence global business-to-business distribution in several ways.

The way responsibilities are shared has previously been relatively clear in distribution: the manufacturer focuses mainly on R&D and production, and intermediaries take responsibility for local sales and marketing, customer relationship management and service provision (logistics, after sales services etc.). However, servitization may drastically change the way responsibilities are shared between manufacturers and intermediaries. If a manufacturer develops its offering towards a complex service- and knowledge intensive one, not all of the intermediaries are capable of selling those. Then, manufacturers should either provide sufficient training for the intermediaries or consider selling certain parts of the offering by themselves.

Understanding of the local context of customers, creation of a positive customer experience and adjusting interaction and service co-production to different customer needs and characteristics are at the heart of service business. However, when a manufacturer reaches its customers via the intermediaries of marketing and distribution channels they lack direct contact with their customers. Then, a major challenge occurs: how can a manufacturer develop customer-focused offerings and operations when they do not thoroughly know business customers’ perceptions and expectations of value and customer experience? Is operating via intermediaries then the best way to fulfil customer expectations for value and customer experience in global distribution?

In spite of the indirect marketing and distribution channels in use, manufacturers may reach their customers directly for example, via remote services and various digital channels. In an extreme case, intermediaries may end up losing their position in the distribution channel if the manufacturer pursues closer customer relationships for enhanced customer understanding and starts providing an increasing number of its own services. On the other hand, intermediaries may pursue a competitive advantage through servitization, too. Local services and customer closeness are undoubtedly the intermediaries’ central assets and justification for their role in the distribution channel. Therefore, intermediaries can take on an even stronger role as local service providers.

The optimal model for manufacturers may be a combination of different direct and indirect distribution and marketing channels in global business-to-business distribution. Manufacturers may take on greater responsibility for sales and provision of certain services while intermediaries deal with certain services and customer segments. That way manufacturers can tackle the so-called ‘glocal’ distribution i.e., they balance between, for example, global process efficiency and brand coherency and customizing the offering and service co-production to local customers’ preferences.

Although, huge changes have already taken place in global distribution, digitalization will undoubtedly change global B2B distribution even more!

Hakanen Taru, Helander Nina & Valkokari Katri (In Press). Servitization in global business-to-business distribution: The central activities of manufacturers, Industrial Marketing Management, http://dx.doi.org/10.1016/j.indmarman.2016.10.011

Dimecc REBUS program: http://www.fimecc.com/programs/rebus

10 common mistakes that companies make with Total Solutions

by Taru Hakanen

Total solutions, integrated solutions, product-service systems… In the practical business world, they imply mainly the same thing: Companies package products and/or service as a seamless entity that is based on customer-specific needs. As a result, they accrue benefits for the customer through the combination of different competences and easier purchasing and cooperation.

Total solutions are visible in most companies’ web pages and other marketing material. In spite of the vast interest towards total solutions, we have seen many managers banging their heads against the wall with the same problems. These are 10 common mistakes that companies make with Total Solutions:

  1. Total solutions are sold to every business customer despite the fact that certain customers are not willing to purchase them. This only leads to wasted sales resources, when customers with the most potential have not been identified and sales efforts are not focused on those.
  2. Total solutions are sold to the wrong person in the customer organization. A total solution is not an answer to his/her problems. He/she is not even empowered to procure such large entities.
  3. Salesmen are not competent enough at selling or willing to sell total solutions. Everybody sells what they are used to selling and what they like to sell.
  4. Selling with the ‘one-stop shop’ principle fails. Individuals sell even the same solution from all around the organization without knowing each other. Contact persons are unclear for the customer.
  5. Customer-specific customization fails. The same solution is sold to every customer. Customer’s problems are not really listened and the solutions are not packaged accordingly.
  6. Creating a total solution always starts from zero and companies end up re-inventing the wheel. There are no productized service modules or a clear coordination model to combine them. Profitability and learning possibilities are lost.
  7. Coordination responsibilities are unclear. It is unclear whether the customer or the service provider takes responsibility of the coordination work. Different service providers from around the service provider organization compete over the position of being the ‘closest to the customer’.
  8. Service production is inefficient. The phases of the service process are fuzzy. Knowledge doesn’t flow between the process phases and service providers. Misunderstandings and delays occur.
  9. Total solutions are merely some business jargon of the ‘marketing men’. The total solution offered is not really a total solution. Service modules are still separate entities and gathering them as a total solution does not really benefit the customer in any special way.
  10. Putting a price tag on the coordination work that total solutions require is forgotten. Virtually everything is done for the customers to keep them happy, but the profitability of own company is lost.

Despite the long list of problems outlined in this post, it is definitely possible to make your customers happy with total solutions and enjoy a profitable business along the way! And you guessed right… We at VTT know how to solve these problems with you!

 

Hakanen, Taru (2014). Co-creation of integrated service solutions in business networks. Doctoral Dissertation, VTT Science: 71, Espoo.

Fimecc S4Fleet – Service solutions for fleet management

Palveluiden digitalisaatio – videovälitteiset palvelukohtaamiset vakuutuspalveluissa

by Hannamaija Määttä & Inka Lappalainen

Palveluiden digitalisaatio on lisääntynyt vauhdilla viime vuosina, mikä luo sekä paineita että monipuolisia mahdollisuuksia uusille palveluinnovaatioille. Yksi ihmisten arkea merkittävästi helpottava uudistus on ajasta ja paikasta riippumaton asiointi verkossa, joka laajenee kaiken aikaa niin julkisissa kuin yksityisissäkin palveluissa. Digitalisaatio on muuttanut ihmisten asiointia koskevia odotuksia, ja niissä korostuvat entistä enemmän muun muassa joustavuus ja asiointitavan valinnanvapaus henkilökohtaisten mieltymysten, elämäntilanteen sekä palvelutarpeen mukaan. Palvelun monikanavaisuus alkaakin olla arkipäivää, mutta monikanavaiseen saumattomaan palvelukokemukseen on vielä monella alalla matkaa. Opettelua on myös siinä, kuinka erilaisia palvelukohtaamisia hyödynnetään palvelukehittämisessä verkottuneen arvonluonnin kannalta.

Yksi esimerkki käynnissä olevasta palvelukehityksestä vakuutus- ja pankkialalla on palveluneuvojan ja asiakkaan kohtaaminen verkossa videoyhteyden kautta. Verkkotapaaminen mahdollistaa fyysisen läsnäolon tunteen, kun molemmat osapuolet näkevät toisensa. Sen on todettu edistävän henkilökohtaista ja luottamuksellista palvelukokemusta, mitä erityisesti vakuutuspalvelussa arvostetaan. Niin ikään se mahdollistaa reaaliaikaisen keskustelun ja käsillä olevan asian työstämisen yhdessä, kun palveluneuvoja pystyy jakamaan oman näyttönsä asiakkaan kanssa. Keskeisinä hyötyinä ovat molemminpuolinen ajansäästö ja resurssitehokkuus. Asiakas voi esimerkiksi halutessaan varata verkkotapaamisen ja säästää itsensä jonotukselta puhelinpalveluun tai matkalta paikanpäälle toimistoon. Kuulostaa helpolta ja vaivattomalta, mutta onko sittenkään kyse vain videovälitteisestä asiointikanavasta?

Osana VALIT-tutkimushanketta (www.valit.fi) olemme tutkineet tämän kaltaisten uusien palvelukohtaamisten potentiaalia innovaatioareenana, eli uudistuvan arvonluonnin, osapuolten arvo-odotusten sekä vaihtoehtoisten innovaatiologiikkojen näkökulmasta.

Keskeisiksi kysymyksiksi nousee, kuinka luodaan vakuutuspalvelussa olennainen luottamuksellinen suhde osapuolten kesken, kun välissä on teknologia? Mitä uusia osaamisvaatimuksia verkkotapaaminen asettaa asiakaspalvelijalle sekä asiakkaalle? Miten uudistuva palvelu ja sen arvolupaus rakentuu osapuolten kesken? Miten tämän kaltainen vuorovaikutus muuttaa asiakaspalvelijan työkäytäntöjä sekä asiantuntijuuden muutosta systeemisestä näkökulmasta?

Case-tutkimuksessamme keskityimme videon välityksellä tapahtuvien palvelukohtaamisten kehittämiseen LähiTapiolan vakuutuspalveluissa. Osapuolia palvelevien tehokkuustavoitteiden ohella verkkotapaamisella pyritään yhtiöryhmän uudistuneen strategian mukaisesti entistä helpommin ja luontevammin turvaamaan ja edistämään ihmisten arkea yhteistyökumppaneiden kanssa. Alustavien tutkimustulostemme perusteella verkkotapaaminen parhaimmillaan yhdistää oivallisesti asiakasläheisyyden, joustavuuden ja tehokkuuden. Siten se on jälleen yksi askel vakuutuspalvelun integroitumiselle entistä luontevammin osaksi ihmisten arkea. Tämä kehityssuunta tarjoaa jatkuvasti uudenlaisia arvonluonnin mahdollisuuksia. Verkkotapaamisten sisällössä painottuu entistä enemmän ennakoivuus, elinkaarinäkökulma, henkilökohtainen ja yhteisöllinen kokonaisturva ja uudistumiskyky. Siten se asettaa uudenlaisia osaamis- ja asennevaatimuksia molemmille osapuolille. Nämä vaatimukset on otettava huomioon, jotta voidaan edistää uudenlaisten palvelumallien rakentumista.

Systeemisestä näkökulmasta vaikuttaisikin, että verkkotapaamisten mahdollistamat avoimet (kasvokkain tapahtuvat, välittömät, vastavuoroiset ja epämuodolliset) palvelukohtaamiset toimivat osaltaan vakuutuspalvelun dynaamisena innovaatioareenana verkottuneen arvonluonnin ja digitalisaation murroksessa. Tämä edellyttää kuitenkin, että nykyiset toimintamallit haastetaan kokeilevalla yhteiskehittämisellä, asiakkaiden käyttökontekstin syvällisellä tuntemuksella sekä systeemisellä kehitystavalla, huomioiden eri toimijoiden arvo-odotukset.

Kirjoitus pohjautuu käynnissä olevaan tutkimustyöhön sekä konferenssijulkaisuun: Määttä, HM. & Lappalainen, I. 2015. ICT-based service encounters as an innovation arena. XXV. International RESER Conference, September, Copenhagen, Denmark.

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

Building a service business model for a manufacturing SME

By Jukka Hemilä

We published a journal article aiming to increase the understanding of service business development for manufacturing SMEs by further developing previous conceptual frameworks for service supply chain management, based on the current scientific literature and empirical cases. The main result of the study is a simple, but comprehensive step-by-step model for the development of the service business and service supply chain.

The previous literature includes many New Service Development (NSD) programs and models, but the methods are not described in such detail that SMEs can strictly follow them. A formalized process from strategy to implementation, with the usage of the best available resources, can ensure the success of the NSD program. The development models described in literature include typically four main phases: 1. strategic targets, 2. corporate environment, 3. service offering design and development, and 4. Implementation.

Based on empirical SME cases we noticed a need for a more detailed and simple, but comprehensive step-by-step model for the development of the service business and service supply chain. We created a step-by-step model with service development phases (SDPs), to define the required steps in the service business development:

SDP1 – Company present state and strategy

SDP2 – Products and their features

SDP3 – Customers, segments, needs

SDP4 – Product life-cycle

SDP5 – Services along product life-cycle

SDP6 – Service offering, service modules

SDP7 – Service organization, service processes

SDP8 – Earning logic, service pricing models, service value

SDP9 – Service sales and marketing models

SDP10 – Service launch to markets

SDP11 – Follow-up and improvements

For successful NSD in SME, project managers should involve all business functions and competent resources from the organization. When setting up a development project, sales, ICT, and R&D functions should be heavily involved. These functions have core knowledge and ideas required in the development of service business in manufacturing firms. The process should start with a strategic discussion of whether the firm’s future is based only on the product offerings, or whether there should be a services offering and what is its role. The most challenging part of the development turned out to be technology and the product itself, which is quite surprising. There were many people involved in product development, because they introduced new sensors, ICT, and structures to the final product. We had two empirical case studies in which we tested and validated our developed step-by-step model (see Table below). Case 1 was Chiller Oy, a cooling and heating equipment manufacturer. Case 2 was Oy M. Haloila Ab, a manufacturer of automatic wrapping machines.

Product offerings Turnover Employees Workshops Involved employees Involved positions
CASE 1 cooling and heating equipment 20 M€ 50 26 11 CEO, CFO, CTO, ICT and Logistics Director, Sales Director, employees from IT, Production and Service departments
CASE 2 wrapping machines 30 M€ 55 27 14 CEO, CTO, CFO, Production and Logistics Director, Sales Director, employees from R&D, IT, Production and Service departments

The implications of the study are beneficial from both the scientific and practical perspectives, which help to understand better the process and related factors in multi-actor service business development. The practical findings of the study give insights from manufacturing firms’ new service developments, and from the roles and resources required in the process. It was valuable for case companies to have a structured and formal process for the development. Companies with limited resources need external expertise, consultants or researchers, to support the development process.

The digitalisation brings entire new opportunities for the service businesses. Our SDP model can be used for the digitalisation of service business as well. Just contact us and let’s make your business even more competitive with the service offerings and digitalisation.

Reference:

Hemilä, J. & Vilko, J. (2015): The Development of the Service Supply Chain for a Manufacturing SME. International Journal of Logistics Management, Vol. 26 Iss: 3.

Entire article can be found from here: http://www.emeraldinsight.com/doi/full/10.1108/IJLM-01-2014-0001