A novel approach to piloting solutions business emphasizes strategic dialogue about future opportunities and co-creative development between the provider and customer. It allows companies to cross the “valley of death” of new business development safely and efficiently. The approach is built on two key models: a learning model and a collaborative piloting process model. The learning model (fig. 1) illustrates the key elements of the solution from both the provider and the customer perspectives. The idea is that for a solution to be successful there has to be a fit between the stakeholders regarding the elements. The aim of the piloting is to develop the concepts collaboratively from both perspectives to reach the fit.
The piloting process model (fig. 2) depicts the main phases and tasks of the service provider and the customer during the collaborative pilot. From the provider’s perspective piloting is not limited to a single piloting case with a specific customer but extends over several customer cases thus providing ground for benchmarking and comparing the solution’s feasibility in different contexts.
A fundamental driver for piloting new offering is the need to reduce uncertainty, e.g. related to commercial feasibility or implementation. Without practical testing the potential flaws of the solution may remain unnoticed causing significant extra costs and delay in breaking even after the commercial launch. In solutions business the context is often complex, e.g. involving several organizations and their functions. Managing these complexities is essential. Thus, seamless collaboration is required not only between customer and service provider companies but also within these organizations. This calls for systematic managerial engagement at strategic level and cross-functional working. With a collaborative approach to piloting it is possible to lay ground for simultaneous commercialization and industrialization of new solutions.
The foundations of the solutions piloting concepts were developed by VTT in joint case studies with ABB Marine and Outotec. The ABB case was about developing energy efficiency management services for ships, and it provided a fruitful example of developing services in a complex context of several stakeholders with different interests. The Outotec study focused on developing the piloting process as part of the existing new product/service development process.
The solutions piloting approach speeds up solutions development by engaging management to the development process, by employing a cross-functional and systematic way of working and by laying ground for commercialization and industrialization.Utilization of the solutions piloting approach is most suitable for complex systemic solutions and implementation contexts where there is high uncertainty about the potential benefits and required efforts by different stakeholders. In that kind of a situation, looking at the challenge together using jointly agreed methods, solution providers and customers can get invaluable insights to cross the “valley of death” of new business development.
Risto Valakari, Service Sales Manager, Outotec states: “Through piloting a customer can identify important aspects of the new solutions and affect the development of the solution. As a result a company can better fulfil customers’ needs and expectations and added value of the solution can be better demonstrated and communicated to a customer.”
Markku Mikkola, VTT
Heidi Korhonen, VTT
VTT, ABB Marine, Outotec