15 Jan Building and Testing Your Digital Innovation
Many of the digital innovations I’ve reviewed struggle to get to a customer trial. Why is that and what can be done about it?
Stuck in First Gear
Over the past 2 years, I’ve had occasion to be exposed to a number of great business to business digital innovations that I think offer stupendous customer advantage. They’re creative, edgy and advanced. They incorporate some of the latest gadgetry like cloud computing, augmented reality headsets, smartphone apps, block chain, analytics and the internet of things. They’re dead easy to learn to use. See them in action, and you think that it’s a no-brainer for a customer to move to purchase.
Many, however, struggle to get to market, and seem stuck in first gear. Part of the problem may be an inability on the part of the founders to articulate the value that the solution offers. It may be that the novelty of the solution creates too much risk for the potential customer to accept. And it may be that the customer can’t see how the solution would work in their context. Oftentimes, customers tell me that these innovations look more like solutions looking for problems to solve, and not the other way around.
Recently I spent a couple of hours engaging with an entrepreneur with the solution he was trying to advance. After some explanation, I was able to grasp the business problem that he was trying to solve, but for the life of me, I couldn’t grasp his solution. There were simply too many unanswerable questions, or questions that I thought created a risk that I couldn’t quite see beyond.
Now, I may be overly risk averse, but if I can’t get it, then I’m pretty sure a real customer, that is, an oil and gas outfit, is going to struggle to make the business case. They hate being first with anything. Innovation has to be as fully derisked as possible. Whatever the proposition, it needs to be shown to work in their context to get any consideration. They need to see how it will be implemented, not just what it does.
Innovation a Decade Ago
Once upon a time, I was working with a downstream oil company that was, by their own admission, well behind the times. The cash registers at their retail stations were so obsolete that they resorted to scavenging parts from underused ones. Credit card authorization took a full 30 seconds because the equipment was so old. Debit cards could not be implemented because the software at the register lacked the ability to recognise that kind of card.
The competitors had long since introduced a crazy new innovation called “pay at the pumps“, something we all now take for granted (unless, perhaps, if you live in parts of Oregon or New Jersey). But for our client, with their obsolete systems, pay at the pumps was simply not feasible.
The company decided to embark on a sweeping project to overhaul their fuel stations. The scope was audacious at the time – all new signage, colours and branding, new cabinetry and cash registers with scanning capability, and new in store software. Our scope was to sort out pay at the pump technology, and make it work.
We would have to face all sorts of challenges. The pumps were too expensive to replace – they were mounted on concrete in the forecourt – so we would need to work within that constraint. Some sites didn’t have good network coverage, so we would have to trial a satellite connection. The number of credit and debit cards to process numbered in the hundreds. And for the first time, the fuel pumps with their new pin pads would need to connect to the cash register system inside.
Think of all the players involved in making this system work – the inside store supervisor and counter service staff, the motoring public, the accounting team, the bank technology teams, the telecoms service (satellite and terrestrial). Then there’s the hardware – fuel pumps from Gilbarco, the CRIND technology, pump controllers, the new cash registers, modems, and scanners.
The Conference Room Pilot
To deliver pay at the pump for the customer (not once but at 750 stations, 8 pumps per station, in two countries), we needed to make dead sure it would absolutely work, in all weather conditions, in multiple languages, and in multiple currencies. It needed to be easily installed. Customers needed to be able to use it without training. And it needed to hit a sub-second response time. No one was going to wait 30 seconds outside for a credit card authorisation.
Our solution was to commandeer a conference room at the client site, within which we recreated the entire pay at the pump experience. We installed a working fuel pump and tricked it to dispense imaginary fuel when we squeezed the nozzle. We brought in cash registers, scanners, modems, satellite connections, and test debit and credit cards. We had workstations that represented the customer, the cashier, the shift supervisor, the back office, the bank, corporate IT, help desk, and other key roles.
On the walls, we mapped out all the various processes that would happen – everything from a working purchase, a stolen card, over limit cards, drive offs (a kind of theft), cold weather, high volume activity, network down, interrupted transactions, and mixed inside-outside sales. We had flow charts, check lists, problems to fix, project plans, documentation, performance targets and measures, and other project data. We built the integrations we needed into the existing systems including finance, Human Resources and store inventory. As we worked the solution, we posted updates to the walls.
In time we perfected the solution and we were able to implement it successfully across the fuel stations.
Digital Innovation Today
The challenge I see with digital innovators and entrepreneurs today in the business to business area is that they tend to take too narrow a view of what their solution is going to deliver. This is perhaps admirable in maintaining focus, but I fear that it does not result in a minimum viable product that an oil and gas business can embrace. In my “pay at the pump” example, the minimum viable product had to incorporate a pretty complete range of features to be minimally viable.
If today’s digital innovators are going to succeed in selling their solutions to a demanding industrial audience, they’re going to have to take a page from yesterday’s digital playbook and bring more complete solutions to the table.
Who are the Persona?
A digital solution that only reflects one end user experience is simply too narrow. Think about all the possible roles and services inside a corporation that could be impacted by your solution. At a minimum, you’ll encounter financial controllers, accountants and engineering services who will have needs or will be impacted.
What is the process?
Your digital solution must fit within some business context. Try to draw out the process so that at least you can show the inputs and outputs and where you anticipate integration (probably some existing company system). More persona will start to show up here. Think about the use cases and scenarios, particularly the most extreme ones.
What is the hardware?
Unless your solution is a pure cloud thing, it probably has some hardware component. If that’s true, you need to show how you can integrate with at least some of the hardware category leaders, and have an answer to how the solution is extendible to other providers. It goes without saying that you need to fit in with all the requisite user hardware like tablets, smart phones, and browsers.
What about data?
It’s a good bet that your digital solution takes a fresh look at data, either creating new data (such as GPS location data, visual data, distributed ledger data or tokens), or aggregating data (in the cloud or via analytics). Who uses this data (thereby creating a new persona)? If your solution needs data that might exist already, where does it come from? More personas. It’s a pretty good bet you’ll need to integrate with ERP systems like SAP and Oracle.
Who do you fear?
The oil and gas industry is very safety and environmentally conscious. You need to be able to answer and show how your solution does no harm to people, the environment and equipment, and ideally improves safety conditions under use. How will you respond to questions about cyber security, hackers and other digital vulnerabilities?
Consider the key variables
Business will want to understand how your solution will behave under varying conditions. This is particularly true for Blockchain solutions that incorporate some kind of token with some kind of valuation. You need to be able to show, on a model, how the tokens are created, transferred, sold, traded, swapped for cash, valued and destroyed. How does your solution behave at different commodity prices, currency values and interest rates?
How do you make money?
My “pay at the pump” solution made money by raising traffic volumes and increasing throughout (all those 30 seconds add up). But how do you make money with your solution, both for you and for your customer? This is particularly true for blockchain solutions that create value via tokens.
Digital innovators should use techniques like the conference room pilot to show how their solution fits into a business context.