Strategic Innovation Management

8/6/2019 Strategic Innovation Management

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Strategic InnovationStrategic InnovationManagementManagement

Creating a Sustainable CompetitiveCreating a Sustainable Competitive

AdvantageAdvantageBy Dr. Iain SandersBy Dr. Iain Sanders

(Design for Innovation Ltd.)(Design for Innovation Ltd.)


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What you dont know about yourWhat you dont know about your

customers and your business maycustomers and your business may

be costing you millions!be costing you millions!

For example:

technology,

product &

service

value-creation

For example:

The best

customer

solutions to

maximize your

customers

profitability

For example:

Your businessmodel is nowobsolete,limiting youreffectivenessand ability toachieve asustainablecompetitiveadvantage


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Business FocusBusiness Focus::Effectiveness Effectiveness

BusinessBusiness

ProactivityProactivity

Business FocusBusiness Focus::

Efficiency Efficiency

BusinessBusiness

ResponsivenessResponsiveness

7 levels for maximizing potential7 levels for maximizing potential

innovation value-creationinnovation value-creation

1.1.

Business Model IdeationBusiness Model Ideation

2.2.

Business Model OptimizationBusiness Model Optimization

3.3.

Customer Solution OptimizationCustomer Solution Optimization

4.4.

Solution-driven ServicesSolution-driven Services

5.5.Solution-driven ProductsSolution-driven Products

6.6.

Delivery ProcessesDelivery Processes

7.7.

Technology EnablersTechnology Enablers


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IN INCREASING DETAILWITH GREATER PRECISION

3. PERFORMANCE-DRIVEN DELIVERY CHANNELS3. PERFORMANCE-DRIVEN DELIVERY CHANNELS

A. PROCESS DISTINCTIONSA. PROCESS DISTINCTIONSB. PROCESS INTEGRATIONB. PROCESS INTEGRATION C. PROCESSC. PROCESS

COORDINATIONCOORDINATION

D. PROCESS VALIDATIOND. PROCESS VALIDATION

1. SOLUTION-DRIVEN NEEDS ASSESSMENT1. SOLUTION-DRIVEN NEEDS ASSESSMENT

A. NEEDS ANALYSIS AUDITA. NEEDS ANALYSIS AUDIT B. RESULTS-DRIVEN EVALUATIONB. RESULTS-DRIVEN EVALUATIONREQUIREMENTSREQUIREMENTS

C. PLANNING & COMMUNICATINGC. PLANNING & COMMUNICATINGRESULTS REQUIREMENTSRESULTS REQUIREMENTS

2. DATA-DRIVEN TARGETS AND MEASURES2. DATA-DRIVEN TARGETS AND MEASURES

A. REVIEW STRATEGY METRICSA. REVIEW STRATEGY METRICS B. ESTABLISH METRIC WORLDVIEWB. ESTABLISH METRIC WORLDVIEW C. DEVELOP INTEGRATEDC. DEVELOP INTEGRATEDSTRATEGIC WORLDVIEWSTRATEGIC WORLDVIEW

4. VALUE-DRIVEN PROCESS OPTIMIZATION4. VALUE-DRIVEN PROCESS OPTIMIZATION

A. PROCESS DEFINITIONA. PROCESS DEFINITION B. PROCESS ANALYSISB. PROCESS ANALYSIS C. PROCESSC. PROCESSOPTIMIZATIONOPTIMIZATION

D. PROCESSD. PROCESSIMPLEMENTATIONIMPLEMENTATION

6. PROFIT-DRIVEN PORTFOLIO MANAGEMENT6. PROFIT-DRIVEN PORTFOLIO MANAGEMENT

A. DEFINEA. DEFINEREQUIREMENTSREQUIREMENTS

B. PORTFOLIOB. PORTFOLIOPROCESS DESIGNPROCESS DESIGN

C. TRIAL INSTALL &C. TRIAL INSTALL &ADJUSTADJUST

D. IMPLEMENT &D. IMPLEMENT &IMPROVEIMPROVE

5. PROCESS-DRIVEN PROJECT MANAGEMENT5. PROCESS-DRIVEN PROJECT MANAGEMENT

A. PROJECT ALIGNMENTA. PROJECT ALIGNMENT B. PHASE-GATE MANAGEMENTB. PHASE-GATE MANAGEMENT C. PROJECT PERFORMANCEC. PROJECT PERFORMANCE

7. OUTCOME-DRIVEN SYSTEMS INTEGRATION7. OUTCOME-DRIVEN SYSTEMS INTEGRATION

A. SYSTEM SETUPA. SYSTEM SETUP B. SYSTEM TRAININGB. SYSTEM TRAINING C. SYSTEM SUPPORTC. SYSTEM SUPPORT

QUANTIFIED, QUALIFIED AND MAXIMIZED CURRENT AND FUTURE VALUE-QUANTIFIED, QUALIFIED AND MAXIMIZED CURRENT AND FUTURE VALUE-

CREATION:CREATION: Sustainable Innovative Solutions Ltd. Sustainable Innovative Solutions Ltd.

20082008


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FINANCE

INFRASTRUCTURE CUSTOMER

VALUEVALUE

PROPOSITIONPROPOSITION

OFFER

gives an overall view of

a company's bundle of

products and services

PARTNERPARTNER

NETWORKNETWORK

portrays the network of

cooperative

agreements with other

companies

DISTRIBUTIONDISTRIBUTION

CHANNELSCHANNELS

describes the channels

to communicate and

get in touch with

customers

VALUEVALUE

CONFIGURATIONCONFIGURATION

describes the

arrangement of

activities and resources

CUSTOMERCUSTOMER

RELATIONSHIPRELATIONSHIP

explains the

relationships a

company establishes

with its customers

COSTCOST

STRUCTURESTRUCTURE

sums up the monetary

consequences to run a

business model

REVENUEREVENUE

STREAMSSTREAMS

describes the revenue

streams through which

money is earned

TARGETTARGET

CUSTOMERSCUSTOMERS

describes thecustomers and

customer segments a

company wants to offer

value to

CORECORE

CAPABILITIESCAPABILITIES

outlines the capabilities

required to run a

company's business

model

Creating, Defining and Improving aCreating, Defining and Improving a

Companys Business ModelCompanys Business Model


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Improve the Business ModelImprove the Business Model

1.1. Customer SegmentsCustomer Seg

ments who are our customers? who are our customers?

2.2. Value PropositionValue Prop

osition - what do we offer each of our client- what do we offer each of our clientsegments?segments?

3.3. ChannelsChannels - how do we reach each of our client segments?- how do we reach each of our client segments?

4.4. Customer RelationshipsCustomer Relationship

s how do we relate to our clients how do we relate to our clientsover time?over time?

5.5. Revenue StreamsRevenue Streams - how do we earn money?- how do we earn money?

6.6. Key ResourcesKey

Resources based on which assets are we running our based on which assets are we running ourbusiness?business?

7.7. Key ActivitiesKey

Activities - what key activities do we need to run our- what key activities do we need to run ourbusiness model?business model?

8.8. Partner NetworkPartner Network- with which partners do we leverage our- with which partners do we leverage ourbusiness?business?

9.9. Cost StructureCost Structure where are our most important costs? where are our most important costs?


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Strategies for continually developing aStrategies for continually developing a

more profitable business modelmore profitable business model

11stst StageStage: Target most productive areas for: Target most productive areas for

improving the business modelimproving the business model

22ndnd

StageStage

: Provide sustained benefits for all: Provide sustained benefits for all

stakeholdersstakeholders

33rdrd StageStage: Expand business model: Expand business model

innovationinnovation

44thth StageStage: Pursue higher-potential business: Pursue higher-potential business

model optimizationmodel optimization


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Identify and Qualify New OpportunitiesIdentify and Qualify New Opportunities

ExploitedExploited

OpportunitiesOpportunities

UnexploitedUnexploited


UnexploitedUnexploited

OpportunitiesOpportunitiesUnexploitedUnexploited


Served Customers Unserved Customers

Unarticulated

Needs

Articulated

Needs

Articulated-Served

Customers: knownworld of customer

needs

Articulated-

Unserved

Customers:offerings developed

& perfected forexisting customers

extended to newcustomers in

different markets

Unarticulated-

Unserved

Customers:proactive and

visionary companieslike Honda seek toget inside he heads

& experiences ofunaddressed

customers

Unarticulated-

Served Customers:

potential forsatisfied customers

to becomefrustrated or

uninterested ifunexpressed but feltneeds not addressed


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Opportunities IdentifiedOpportunities Identified

A.A. Unexpected SuccessesUnexpected Successes

B.B. Unexpected FailuresUnexpected Failures

C.C. Unexpected External EventsUnexpected External Events

D.D. Process WeaknessesProcess Weaknesses

E.E. Industry / Market StructureIndustry / Market StructureChangesChanges

F.F. High-Growth AreasHigh-Growth Areas

G.G. Converging TechnologiesConverging Technologies

H.H. Demographic ChangesDemographic Changes

I.I. Perception ChangesPerception Changes

J.J. New KnowledgeNew Knowledge

Dimensions AvailableDimensions Available

1.1. OfferingsOfferings

2.2. PlatformPlatform

3.3. SolutionsSolutions

4.4. CustomersCustomers

5.5. Customer ExperienceCustomer Experience

6.6. Value CaptureValue Capture

7.7. ProcessesProcesses

8.8. OrganizationOrganization

9.9. Supply ChainSupply Chain

10.10. PresencePresence

11.11. NetworkingNetworking

12.12. BrandBrand

Dimensions to Opportunities AvailableDimensions to Opportunities Available

Vs.Vs.


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Dimensions to Opportunities IdentifiedDimensions to Opportunities IdentifiedDimensionDimension DefinitionDefinition ExamplesExamples

OfferingsOfferings Develop innovative new products or servicesDevelop innovative new products or services Gillette Mach3Turbo razorGillette Mach3Turbo razor

Apple iPod music player & iTunes music serviceApple iPod music player & iTunes music service

PlatformPlatform

Use common components or building blocks toUse common components or building blocks to

create derivative offeringscreate derivative offerings

General Motors OnStar telematics platformGeneral Motors OnStar telematics platform

Disney animated moviesDisney animated movies

SolutionsSolutions Create integrated and customized offerings thatCreate integrated and customized offerings thatsolve end-to-end customer problemssolve end-to-end customer problems

UPS logistics services Supply Chain SolutionsUPS logistics services Supply Chain Solutions

DuPont Building Innovations for constructionDuPont Building Innovations for construction

CustomersCustomers Discover unmet customer needs or identifyDiscover unmet customer needs or identifyunderserved customer segmentsunderserved customer segments

Enterprise Rent-A-Car focus on replacement car rentersEnterprise Rent-A-Car focus on replacement car renters

Green Mountain Energy focus on green powerGreen Mountain Energy focus on green power

CustomerCustomer

ExperienceExperience

Redesign customer interactions across all touchRedesign customer interactions across all touchpoints and all moments of contactpoints and all moments of contact

Washington Mutual Occasio retail banking conceptWashington Mutual Occasio retail banking concept

Cabelas store as entertainment experience conceptCabelas store as entertainment experience concept

Value Capturealue Capture Redefine how company gets paid or createRedefine how company gets paid or createinnovative new revenue streamsinnovative new revenue streams

Google paid searchGoogle paid search

Blockbuster revenue-sharing with movie distributorsBlockbuster revenue-sharing with movie distributors

ProcessesProcesses Redesign core operating processes to improveRedesign core operating processes to improveefficiency and effectivenessefficiency and effectiveness

Toyota Production System for operationsToyota Production System for operations

General Electric Design for Six Sigma (DFSS)General Electric Design for Six Sigma (DFSS)

OrganizationOrganization Change form, function or activity scope of theChange form, function or activity scope of thefirmfirm

Cisco partner-centric networked virtual organizationCisco partner-centric networked virtual organization

Procter & Gamble front-back hybrid organization forProcter & Gamble front-back hybrid organization for

customer focuscustomer focus

Supply ChainSupply Chain Think differently about sourcing and fulfillmentThink differently about sourcing and fulfillment Moen ProjectNet for collaborative design with suppliersMoen ProjectNet for collaborative design with suppliers

General Motors Celta use of integrated supply and online salesGeneral Motors Celta use of integrated supply and online sales

PresencePresence Create new distribution channels or innovativeCreate new distribution channels or innovativepoints of presence, including the places wherepoints of presence, including the places whereofferings can be bought or used by customersofferings can be bought or used by customers

Starbucks music CD sales in coffee storesStarbucks music CD sales in coffee stores

Diebold RemoteTeller System for bankingDiebold RemoteTeller System for banking

NetworkingNetworking Create network-centric intelligent and integratedCreate network-centric intelligent and integratedofferingsofferings

Otis Remote Elevator Monitoring serviceOtis Remote Elevator Monitoring service

Department of Defense Network Centric WarfareDepartment of Defense Network Centric Warfare

BrandBrand Leverage a brand into new domainsLeverage a brand into new domains Virgin Group branded venture capitalVirgin Group branded venture capital

Yahoo! as a lifestyle brandYahoo! as a lifestyle brand


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REVENUESCOSTS

KEY ISSUESTO SOLVE

ACTIVITIES

PARTNERS RELATIONS

OFFER CLIENTSCHANNELS

ValueValue

Proposition 1Proposition 1

CostingCosting

Issue1Issue1

CustomerCustomer

Relations 1Relations 1

CustomerCustomer

Segment 1Segment 1

ConfigureConfigure

Value 3Value 3CoreCore

Capability 4Capability 4

PartnerPartner

Network 1Network 1

Revenues 1Revenues 1

DeliveryDeliveryChannel 1Channel 1

ConfigureConfigure

Value 2Value 2

CoreCore


ConfigureConfigure

Value 1Value 1

CoreCoreCapability 1Capability 1

CoreCore


CostingCosting

Issue 2Issue 2

DeliveryDelivery

Channel 2Channel 2

MappingOpportunities


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REVENUESCOSTS

KEY ISSUESTO SOLVE

ACTIVITIES

PARTNERS RELATIONS


selling stuffselling stuff

on the Webon the Web

IT infraIT infra

automatizedautomatized

relationshipsrelationships

massmass

customercustomer

data servicesdata services

Amazon.comAmazon.com

data griddata grid

partnerspartners



warehousingwarehousing

& distribution& distribution

distributiondistribution

contentcontent

managementmanagement

productproductselectionselection

productproduct

searchsearch

marketingmarketing

affiliatesaffiliates

Example:

AMAZON.COM


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Strategic alternatives / value propositionStrategic alternatives / value proposition

ValueValue What we are striving forWhat we are striving for

Valuationfilter

Operationalfilter

Strategicfilter

Economic

filter

Evaluate Strategic AlternativesEvaluate Strategic Alternatives

SourcesSources

of valueof value


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Quantify Opportunities with a SWOT analysisQuantify Opportunities with a SWOT analysis

ExploitExploit SearchSearch

ConfrontConfront Avoid or PrepareAvoid or Prepare

InternalEnvironment

Strengths

External

EnvironmentThreats

External

EnvironmentOpportunities

Opportunity ismatched with

strength. Businesssgrowing edge

where it cancapitalize on areas

of strategicadvantage

Opportunity ismatched with

weakness.Opportunities exist

that theorganization can

recognize but is notequipped to tackle

Threat matched withweakness. Some

threats avoidable,and others are not.

Confrontingcompetitive threatswith weakness is notonly dangerous but

drains resources

Threat is matchedwith organizationalstrength mobilizeto limit and controlthe looming danger

InternalEnvironment

Weaknesses


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REVENUESSTREAMS

COSTSSTRUCTURE

CORECAPABILI-

TIES

VALUECONFIG-

URATION

PARTNERNETWORK

CUSTOMERRELATIONS

VALUEPROPOSI-

TION

TARGETCUSTOMER

SEGMENTS

DELIVERYCHANNELS

ImprovingOpportunities

5

6

5

6

ThreatsThreats


1 1

1

WeaknessesWeaknesses

1

1

2

2

StrengthsStrengths

2

2

2

22

2

2

2

5

5

6

6

1

2 2

2

E l


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REVENUESCOSTS

KEY ISSUESTO SOLVE

ACTIVITIES

PARTNERS RELATIONS



on the Webon the Web

IT infraIT infra

automatizedautomatized

relationshipsrelationships

massmass

customercustomer

data servicesdata services


data griddata grid

partnerspartners


Amazon S3Amazon S3


Internet APIInternet API

Web2.0Web2.0

companiescompanieswarehousingwarehousing

& distribution& distribution

distributiondistribution

contentcontent

managementmanagement

productproductselectionselection

A9 productA9 product

searchsearch

data storagedata storage

feesfees

productproduct

searchsearch

search enginesearch engine

revenuesrevenues

e-commercee-commerce

sitessites

InternetInternet

marketingmarketing

affiliatesaffiliates

Example:

AMAZON.COM


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Mapping Problems / OpportunitiesMapping Problems / Opportunities

TargetSegments

(TS)

ValuePropositions

(VP)

ValueConfigurations

(VC)

CoreCapabilities

Customer

Domain

Functional

Domain

Physical

Domain

Resource

Domain

WHAT? HOW?

Vision Design

Phase:

Customer

wants & needs

WHAT? HOW?

Mission Design

Phase:

Strategies to

satisfy needs

WHAT? HOW?

Implementation

Design Phase:

Processes to

execute strategies

(CC)

Strategy Formulation & ImplementationStrategy Formulation & Implementation

VISION MISSION


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MeasuringMeasuring

Value-drivenValue-drivenImplement-Implement-

ationation

6

Customer

Satisfaction(34 measures)

1

Employee

Satisfaction(22 measures)

2

Investor

Satisfaction

(27 measures)

3

Regulator &

Community

Satisfaction

(27 measures)

4

Supplier

Satisfaction

(14 measures)

5

StakeholderStakeholder

Satisfaction MeasuresSatisfaction Measures

VISION MISSION

24

Develop Products

& Services

(18 measures)

16

Generate

Demand

(17 measures)

17

Fulfill

Demand

(35 measures)

18

Plan & Manage

Enterprise:

Financial

Operations

(17 measures)

19

Plan & Manage

Enterprise:

Human

Resources

(33 measures)

20

Plan & ManageEnterprise:

Operations

(15 measures)

21

Plan & Manage

Enterprise:

Plan Enterprise

(10 measures)

22

Plan & Manage

Enterprise:

Stakeholder

Relations

(39 measures)

23

Processes forProcesses for

Executing StrategiesExecuting Strategies

29

Infrastructure

(16 measures)

25

People

(21 measures)

26

Practices

(7 measures)

27

Technology

(19 measures)

28

Capabilities to FulfillCapabilities to Fulfill

Process RequirementsProcess Requirements

6

Customer

Contribution

(14 measures)

1

Employee

Contribution

(11 measures)

2

Investor

Contribution

(11 measures)

3

Regulator &

Community

Contribution

(9 measures)

4

Supplier

Contribution

(4 measures)

5

StakeholderStakeholder

Contribution MeasuresContribution Measures

12

Corporate

Strategy

(12 measures)

8

Business

Unit

Strategy

(17 measures)

9

Brand, Product

& Service

Strategy

(19 measures)

10

Operating

Strategy

(13 measures)

11

Strategies for SatisfyingStrategies for Satisfying

Stakeholder Wants & NeedsStakeholder Wants & Needs


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Customer Satisfaction who are our customers and who are our customers and

what do they want and need?what do they want and need?

VALUEVALUE


DISTRIBUTIONDISTRIBUTION

CHANNELSCHANNELS

CUSTOMERCUSTOMER

RELATIONSHIPRELATIONSHIP

REVENUEREVENUE

STREAMSSTREAMS

TARGETTARGET

CUSTOMERSCUSTOMERS


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Other Stakeholder Contributions what contributions do what contributions do

we require from our other stakeholders if we are towe require from our other stakeholders if we are to

maintain and develop our capabilities?maintain and develop our capabilities?

VALUEVALUE


VALUEVALUE


CORECORE


COSTCOST

STRUCTURESTRUCTURE

PARTNERPARTNER

NETWORKNETWORK


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Strategies what strategies do we have to put in place what strategies do we have to put in place

to satisfy the wants and needs of our key stakeholders?to satisfy the wants and needs of our key stakeholders?

DELIVERYDELIVERY

CHANNELSCHANNELS

VALUEVALUE


TARGETTARGET

CUSTOMERSCUSTOMERS

CORECORE


VALUEVALUE

PROPOSITONPROPOSITONREVENUEREVENUE

STREAMSSTREAMS

PARTNERPARTNER

NETWORKNETWORK

CUSTOMERCUSTOMER

RELATIONSHIPSRELATIONSHIPS

COSTCOST

STRUCTURESTRUCTURE

Explore:

1. Corporatestrategy

2. Business unit

strategy

3. Brand, product &

service strategy

4. Operating

strategy


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Processes what critical processes do we require if we what critical processes do we require if we

are to execute these strategies?are to execute these strategies?

DELIVERYDELIVERY

CHANNELSCHANNELS

VALUEVALUE


TARGETTARGET

CUSTOMERSCUSTOMERS

CORECORE


VALUEVALUE

PROPOSITONPROPOSITONREVENUEREVENUE

STREAMSSTREAMS

PARTNERPARTNER

NETWORKNETWORK

CUSTOMERCUSTOMER


COSTCOST

STRUCTURESTRUCTURE

Explore:

1. Developing

products &services

2. Generating

demand

3. Fulfilling demand

4. Planning &

managing the

enterprise


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Capabilities what capabilities do we need to operate what capabilities do we need to operate

and enhance these processes?and enhance these processes?

DELIVERYDELIVERY

CHANNELSCHANNELS

VALUEVALUE


TARGETTARGET

CUSTOMERSCUSTOMERS

PARTNERPARTNER

NETWORKNETWORK

CORECORE

CAPABILITIESCAPABILITIESREVENUEREVENUE

STREAMSSTREAMS

VALUEVALUE


CUSTOMERCUSTOMER


COSTCOST

STRUCTURESTRUCTURE

Explore:1. Infrastructure

2. People

3. Best practices

4. Technology

CUSTOMER SATISFACTIONCUSTOMER SATISFACTIONE GE G


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CUSTOMER VALUE-DRIVEN STRATEGIESCUSTOMER VALUE-DRIVEN STRATEGIES

CUSTOMER PROCESS-DRIVEN CAPABILITIESCUSTOMER PROCESS-DRIVEN CAPABILITIES

CUSTOMER STRATEGY-DRIVEN PROCESSESCUSTOMER STRATEGY-DRIVEN PROCESSES

CUSTOMER CONTRIBUTIONCUSTOMER CONTRIBUTION

CUSTOMER SATISFACTIONCUSTOMER SATISFACTION

FastFast RightRight AffordableAffordable EasyEasy

ProfitProfit GrowthGrowth FeedbackFeedback TrustTrust

Extend / renewExtend / renewproducts andproducts and

services offeredservices offered

Attract potentiallyAttract potentiallyprofitable newprofitable new

customerscustomers

Retain profitableRetain profitableexisting customersexisting customers

Grow share of targetGrow share of targetmarket segmentsmarket segments

DevelopDevelopproducts andproducts and

servicesservices

Build marketBuild marketoffering alliancesoffering alliances

GenerateGeneratedemanddemand

Fulfill demandFulfill demand Plan and managePlan and manageenterpriseenterprise

ResearchandDev

elop

ResearchandDev

elop

Merchandising/p

roduc

Merchandising/p

roduc

Pricingmanagement

Pricingmanagement

Marketingcampai

gnsa

Marketingcampaignsa

Alliancemanagem

ent

Alliancemanagem

ent

Salesanddistribu

tionc

Salesanddistribu

tionc

Salesforceeffectivenes

Salesforceeffectivenes

Technicalservices

Technicalservices

Orderfulfillmento

perati

Orderfulfillmento

perati

After-salesservice

After-salesservice

Customerrelation

ship

Customerrelation

ship

Qualitymanagement(et

Qualitymanagement(et

E.GE.G


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ARE THE DATAARE THE DATA

CAPTURED ANDCAPTURED AND

ANALYZED?ANALYZED?

QUALITY OFQUALITY OFMEASURMENTMEASURMENT

PRACTICESPRACTICES

QUALITY OFQUALITY OFMANAGEMENTMANAGEMENT

PRACTICESPRACTICES

ARE THE DATAARE THE DATA

ACTED UPONACTED UPON

EFFECTIVELY?EFFECTIVELY?

ARE THE RIGHTARE THE RIGHT

THINGS BEINGTHINGS BEING

MEASURED?MEASURED?

ARE THEY BEINGARE THEY BEING

MEASURED INMEASURED IN

THE RIGHT WAY?THE RIGHT WAY?

BUSINESSBUSINESS

PERFORMANCEPERFORMANCE

BenchmarkBenchmark

your growthyour growthpotential andpotential and

profitabilityprofitability


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Best Practice BusinessBest Practice Business

Performance ComparisonPerformance Comparison

1.1. Business ResponsivenessBusiness Responsiveness (Efficiency):(Efficiency): How well the enterprise achieves its goals.How well the enterprise achieves its goals.

1.1. Business EffectivenessBusiness Effectiveness (Proactivity):(Proactivity): How effective are enterprise goals forHow effective are enterprise goals for

delivering best practice?delivering best practice?
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What is Business Intelligence?What is Business Intelligence?

DataData InformationInformation KnowledgeKnowledge IntelligenceIntelligence

$ ROI

Pow

erofInfo

rm

Predictive

Modeling &Optimization

Data Mining forData Mining for

effectiveeffective

DatabaseDatabase

MarketingMarketing

Predictive Modeling &Optimization Put into

Action

BusinessIntelligence

(BI)

Wholistic systemsWholistic systems

thinking tracking &thinking tracking &

improving response ratesimproving response rates

and ROI from sales &and ROI from sales &

marketing campaignsmarketing campaigns

RawData

E.G.E.G.LoggingLogging

CustomerCustomer

CallCall

StandardReports

E.G.E.G.PanoramaPanorama

SalesSales

RecordedRecordedDescriptive

Models

E.G.E.G.PerformancePerformance

MeasureMeasure

AlignmentAlignment

with KPIswith KPIs

Ad hocReports& OLAP

E.G.E.G.

CrystalCrystalReportsReports


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Customer Relationship ManagementCustomer Relationship Management

Customer LifecycleCustomer Lifecycle

ManagementManagement

DataData InformationInformation KnowledgeKnowledge IntelligenceIntelligence

$ ROI

Pow

erofInfo

rm

PredictivePredictive

Modeling &Modeling &

OptimisationOptimisation

RawRaw

DataData

StandardStandard

ReportsReports

DescriptiveDescriptiveModelsModels

Ad hocAd hoc

ReportsReports

& OLAP& OLAP

Predictive Market

IntelligenceBusinessIntelligenceCapability

Business PerformanceAlignment

Spend when & where greatest impact

Predictive Modeling &Predictive Modeling &

Optimisation Put intoOptimisation Put into

ActionAction

Customer-driven BusinessCustomer-driven Business

IntelligenceIntelligence Best PracticesBest Practices


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76

Customer

Equity

Management

13

Forecasting

& Predictive

Modeling

15

Effective

Marketing

Promotions

16

Quantify

Marketing

Plans

17

Quantify

Decisions

18

Audit

Marketing

19

Accurate

& Reusable

Methods

20

Marketing

Communi-

cations

21

Accountable

Marketing

23

Quality

Market

Research

24

Business Effectiveness ResultsBusiness Effectiveness Results

Client Example

C stomer Val e B ilding Opport nitiesCustomer Value Building Opportunities


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Customer Value-Building OpportunitiesCustomer Value-Building Opportunities

ACQUIREACQUIREprofitableprofitable

CUSTOMERSCUSTOMERS

1. GET CUSTOMERS1. GET CUSTOMERS

RETAINRETAINprofitableprofitable

CUSTOMERSCUSTOMERS

WIN BACKWIN BACKprofitableprofitable

CUSTOMERSCUSTOMERS

ELIMINATEELIMINATEUnprofitableUnprofitable

CUSTOMERSCUSTOMERS

2. KEEP CUSTOMERS2. KEEP CUSTOMERS

UpsellUpsell

ADDITIONALADDITIONAL

PRODUCTSPRODUCTS

Cross-sellCross-sell

OTHEROTHER

PRODUCTSPRODUCTS

ReferralReferralBENEFITSBENEFITS

ReduceReduce SERVICE &SERVICE &

OPERATIONAL COSTSOPERATIONAL COSTS

3. GROW CUSTOMERS3. GROW CUSTOMERS

Client Example


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Sources of Customer Potential ValueSources of Customer Potential ValueActual vs. Potential ValueActual vs. Potential Value

ActualActual(Current)(Current)

ValueValue

$$

Pay forPay forServiceService

LowerLowercostcost

to serveto serve

IncreaseIncreaseshare ofshare ofwalletwallet

PotentialPotentialValueValue

ImproveImproveretentionretention

GrowGrowcategorycategory

spendingspending

GrowGrowadjacentadjacent

categorycategoryspendingspending

Develop Customer Value Building SolutionsDevelop Customer Value Building Solutions


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Develop Customer Value-Building SolutionsDevelop Customer Value-Building Solutions

with your Customerswith your Customers

1.QUANTIFY1.QUANTIFY

CUSTOMERCUSTOMER

CURRENTCURRENT

& FUTURE& FUTURE

VALUEVALUE

2. QUALIFY2. QUALIFY

PROFITABLEPROFITABLE

CUSTOMERCUSTOMER

GROWTHGROWTH

OPPORTUNITIESOPPORTUNITIES

3. MAXIMIZE3. MAXIMIZE

CUSTOMERCUSTOMER

VALUEVALUE

ADDINGADDING

SOLUTIONSSOLUTIONS


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Customer Partnerships for Customer-Customer Partnerships for Customer-


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Customer Partnerships for Customer-Customer Partnerships for Customerdriven Innovation:driven Innovation:

Involve Your Customers as Co-innovators

Board

Marketing

Leadership

R&D

Finance

Operations

CustomersCustomers

Sales

Purchasing

B i M d l Eff tiB i M d l Eff ti


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Business Model EffectivenessBusiness Model Effectiveness1. Define shareholder value-adding requirements1. Define shareholder value-adding requirements

2. Prioritise outputs delivering value-added2. Prioritise outputs delivering value-added3. Prioritise & consolidate value-drivers delivering outputs3. Prioritise & consolidate value-drivers delivering outputs

4. Prioritise & consolidate value-builders developing / supporting value-builders4. Prioritise & consolidate value-builders developing / supporting value-builders

5. Provide top-down performance measurement & management alignment5. Provide top-down performance measurement & management alignment

5. Provide bottom-up performance measurement & management alignment5. Provide bottom-up performance measurement & management alignment

4. Prioritise & consolidate event-impacts4. Prioritise & consolidate event-impacts

3. Align event-capture with performance measures according to their impact & influence3. Align event-capture with performance measures according to their impact & influence

2. Prioritise Latency-Recency-Frequency (LRF)-Event-Capture & Visualization2. Prioritise Latency-Recency-Frequency (LRF)-Event-Capture & Visualization

1. Scope real-time, activity-based business intelligence requirements1. Scope real-time, activity-based business intelligence requirements

EventsEvents Performance MeasuresPerformance Measures PatternsPatterns Systemic StructuresSystemic Structures

Technology Enablers EfficiencyTechnology Enablers Efficiency

Top-Down Requirements will drive Bottom-Up Data ConsolidationTop-Down Requirements will drive Bottom-Up Data Consolidation


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Thank you for your time!Thank you for your time!

For more information please visit:For more information please visit:

http://www.designforinnovation.comhttp://www.designforinnovation.com

Tel: +64(273)566-401Tel: +64(273)566-401Email: [email protected]: [email protected]
http://www.designforinnovation.com/http://www.designforinnovation.com/http://www.designforinnovation.com/