Value propositioning with IoT
To find out which business ideas are the best and how customer needs are met you can convert ideas and needs to value propositions that are later transformed into IoT solutions.
From ideas to value propositions
When working with IoT, we are in the field of technology-driven business development. But you cannot just start with the technology – you must start with the business ideas and customer needs – but at the same time having the possibilities of IoT in mind.
Having finished a Starting with IoT process, you will be faced with a wide range of business ideas – each of them with an estimated financial potential and a perceived technical complexity. The first question you must answer is: which ideas are the best ones and can become strong value propositions for your company?
To create the best answer, FORCE Technology has developed a unique development and qualification process for you to follow. The process simultaneously explores and investigates the actual customer needs – thereby formulating the value proposition arising from the idea – and develops a business case for the value proposition. The process combines design thinking and anthropological methods to create the value proposition as well as business modelling techniques and business value stream analysis to create the business case.
Value propositioning with IoT
The approach has three distinct steps when going from ideas to the value proposition:
Step one: Explore the IoT business ideas
The first step is to explore, define and describe each of the business ideas by focusing much deeper on the customer needs supplemented by impacts from competitors and the market. Here, we use data from customer feedback, observations, interviews, market research and analysis and other sources of information. This helps us define the specific benefits which will be provided by the final value propositions.
Alongside with development of the ideas, the initial value stream for each idea is defined. This is used to start building the business case for each idea - thereby qualifying the original financial potential of the idea in more detailed revenue streams.
After this step, the first qualification of the ideas is done by reviewing the more detailed descriptions and the financial potentials.
Step two: Investigate the IoT value propositions
The second step is to further prepare and mature the ideas by sketching the key aspects of the value propositions. Also, the impact of introducing the envisioned value proposition into the current business model(s) is evaluated to assess the financial investments and costs arising from the value proposition. This may lead to the sketching of a new business model to be assessed.
Here we look closer into the value drivers of the possible IoT solutions for the product and start getting an overview of what capabilities are needed to make the value propositions into real IoT product solutions. Also, the implications of using the IoT Ecosystem to build the final IoT solution are assessed, and the cost drivers and revenue stream factors are identified.
Based on the findings, the business case for each idea - which now has been transformed into a value proposition - is updated with both the revenue part and the investment/cost part. This can again be used to further narrow down the best qualified value propositions.
Step 3: Validate the IoT value propositions
In the third step, the remaining value propositions are validated. The description of each value proposition is finalised to be tested against its target group. This can be in the form of a paper description, a mock-up, a pretotype or similar. The testing method can vary - the important issue is that we have do the testing.
Based on the results from the test, the value proposition as well as its business case is updated leading to an updated ROI-calculation. In this stage, the business case is still to be considered an estimation as the design stage will detail the investment/cost part even further.
Commonly, the validation step will confirm the value proposition and the business case. But this step might also reveal issues which then needs to be resolved by reexploring or reframing the ideas and thus revisit the ideas in either the exploration or the investigation step.
The validation also adds a risk assessment to each value proposition. The testing as well as the previous stages will give input to the risk assessment which can include market elements, regulatory issues, technology issues, operational issues, etc.
The finalised value propositions, the business cases and the risk assessments are input to the last qualification to narrow down the value propositions to go into a solution design process.
The design of the product solution ideas can start immediately after this process – see Designing products with IoT.
Driving IoT projects
To succeed with IoT projects, you need experience to guide you safely from idea to solution.
Starting with IoT
Start your IoT journey with a strategic mindset to define the right approach.
Building products with IoT
Find guidance in choosing the right IoT suppliers and manage the cooperation.
Gain from broad IoT expertise to troubleshoot and find causes for failures.
Designing products with IoT
Combine physical materials with IoT technology and product development through design thinking.