The outcome economy is a shift from competing by products and services to competing by measurable results valued by the customer. Delivering outcomes often demands innovating and problem-solving above the level of an individual product or solution and companies must work together to meet the needs of customers. In other words, outcome-focused business typically requires bundling resources from several actors, i.e. resource integration and value co-creation highlighted also in service-dominant-logic.
New opportunities to measure performance (outcome) have arrived on the scene in the shape of technology boosting industrial Internet or IoT (Internet of Things). IoT enables novel uses of data and companies have become aware of that they actually deliver outcome and it will more and more drive the competition. Digital platforms can collect and analyse data from bundled solutions and ensure that outcome commitments are met.
Despite of the hype around data and platform, customer understanding is the key for success also in the outcome economy: companies have to know the customers’ business inside out, commencing with understanding what the customers are really looking for and what outcomes really matter. Different resources will have to be pulled together, in collaboration with the customers as well as the suppliers and service providers, also to make this work together. Then, the ecosystem can enable to better address a customer need, as it can bring a diverse set of capabilities and innovation to the solution very quickly (see Figure below).
Outcome through value co-creation in a ecosystem.
All the partners in the ecosystem must have something unique, which is providing value for the customer by itself – but is concurrently aligned with joint objectives and complement the aimed outcome. Across many industries, the battle comes true between the ecosystems. This will comprise networks of collaborators, including customers, partners, suppliers, service providers, start-ups and competitors turned to “co-opetitors”. All ecosystem actors should collectively and transparently amplify the value creation opportunities for all participants, and solve problems and share out responsibilities if one or more parts of the system flop.
Ecosystems and platforms are not only for startups but it is essential also incumbent firms to shift their business practices and begin thinking in terms of ecosystems. One of the first steps to this direction is to consider the digital platforms bundling data from the viewpoint of customers’ desired outcomes, i.e. to understand how the data can be valuable to customers’ business. Another, crucial viewpoint is to consider outcome at the ecosystem level, i.e. explore what are the resource bundles that together provide the outcomes that meet customers’ expectations.
VTT is participating in the Manufacturing Performance Days 2017 – Welcome to join us at May 29–31 in Tampere, Finland!
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