An Example of Strategic Positions towards Disruptive StartUPs: Digital Insurance


Technology disruptions and digital transformations are nowadays become a strategic topic in the business world and StartUPs are playing a key role as a generators of new business models.

Clouds, Mobile APPS, IoT and Analytics, together can create new business opportunities easier than few years before since they enable the creation of digital ecosystems among different industries.

As a matter of facts, most of big companies nowadays invest on Start UPs and embrace disruptions with dedicated investment fund (Seed, VC) and  Acceleration programs.

Launchpad Acceleration (Google)  and Microsoft Ventures are just an example.

So, how do big companies deal with Start UPs? Do big companies consider StartUPs as a threat or as an opportunity in order to embrace disruptions?

For each company, by evaluating its:

  • Market Leadership in the industry
  • and the Disruption Attitude towards innovations and investments in StartUPs

in the Figure below, an example applied for the Insurance Industry where are shown four strategic positions toward digital disruptions: Disruptive Leadership, Conservative Leadership, Disruption Hunter and Conservative Niche.

Disruptive_Strategic_Positions_Insurance

Disruptive Leadership

(Market Leadership: HIGH & Disruptive Attitude: HIGH)

Companies that have a proactive attitude towards disruption because they leverage theirs market leadership and resources to develop accelerator programs for Start UPs as well as dedicated Seed or VC investment founds

AXA one of the biggest insurance companies worldwide, with AXA Strategic Ventures  is the most active.

Its portfolio is well developed and wide with more than a few potential successful digital insurance Start UPs such as Policygenius and LimeLightHealth as well as with Biobeats in order to explore new businesses opportunities and ecosystems in healthcare enabled by wearables.

Other big players are filling theirs disruption leadership GAP  by investing more resources and encouraging more initiatives.

In 2015, Generali acquired MyDrive, an interesting auto telematics StartUP, and launched the first edition of Generali Innovation Challenge in order to scout “out of the box” solutions.

Meanwhile Allianz SE is strengthening  its investments by facilitating new strategic business development opportunities with Allianz Digital Corporate Ventures and Allianz Digital Accelerator.

Smaller players like Munich RE and Marsh are insted pretty active on scouting and investing early stage digital insurance Start UPs (see CB Insights Seed & A Series top Seed and A Series investors in insurance).

Conservative Leadership

(Market Leadership: HIGH & Disruptive Attitude: LOW)

Despite its leadership, Conservative Leadership companies have a reactive attitude toward disruptions ans compete in the insurance market by mainly employing its resources on “traditional” investments:

  • Agents’ Networks & Brokers
  • Dividends and Investors relations
  • M&A of developed Start UPs
  • Internal Product Development (close innovation)

Big insurance players such as Zurich, Prudential and Berkshire Hathaway Inc. do not have any signficant accelerator or investment found dedicated for StartUPs and they just M&A whenever a small companies reach a significant stage of development in terms of customer base and traction.

 For example, as United Healthcare did with Optum and others additional Mobile APP services such as Real Appeal.

So, with a Conservative Leaderships approach the market risk of disruptions its just mitigated rather than exploited.

Disruption Hunter

(Market Leadership: LOW & Disruptive Attitude: HIGH)

Despite they are not leading the market many insurance companies might invest (or speculate) on disruptive Start UPs.

Due to the limited amount of resources compared to market leaders, Disruption Hunters neither can institute accelerator programs as Disruptive Leaders do nor acquiring already developed Start UPs.

However, there is still the opportunity to scout early stage StartUPs that required a limited amount of investment at Seed or A Series levels.

Since the risk of failures at early stages is significantly high, it is also necessary to have a wide portfolio as Hub International, Confie and Arthur J. Gallegher have done in 2015.

According to CB Insights, respectively top three acquires of digital insurance StartUPs during last year.

Conservative Niche

(Market Leadership: LOW & Disruptive Attitude: LOW)

Mainly many and many SMBs or independent insurers agents & brokers that are conformable with theirs networks of loyal customers.

So, a framework for identifying the strategic position towards StartUPs’ disruptions have been just applied for the insurance market and it can be extended to other industries (Automotive, Telecommunication, Banking,…).

Concerning insurance, many companies have strengthened theirs effort and interest regarding StartUPs, maybe also because already other big players from other industries like Google have attempted to threat the insurance market (see Compare Auto Insurance recently closed).

What if insurers become comfortable with disruptive digital ecosystems? Would they threat other sectors as well?

Feel free to add any comment, thank you!

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New IT Innovation Development (N.IT.I.D) method Step 5: Select Solutions (Tripadvisor Case Study)


NITID-Select_Solutions

See also:

After brainstorming, simplifying, organizing and evaluating all the ideas, finally it’s time to select the BigData solution in which to invest.

Thanks to the QFD matrix, the key parameters  and competencies that are required for fulfilling the customer needs have been identified.

Moreover, the QFD assesses how the development of a new idea will change the strategic position of the company in the market through a gap analysis.

Anyhow, which idea to choose among all the bigdata IT initiatives?

The question can be addressed by using the Pugh matrix in the table below.

Pugh_Matrix

In particular, in our PUGH matrix of TripAdvisor, all bigdata initiatives are the new functions (needs) to implement and putted into rows: facilitate the process, establish an integrated supply chain, create customer experiences, engage customers and provide statistics and reports.

Meanwhile, all the IT solutions (requirements) are putted into columns: WEB user interface, restaurateur interface, suppliers interface, social networks, visual charts, external company’s interface, data analytics and predictive tools.

In the PUGH matrix a final benchmark is accomplished by assigning for each interception a score that might be -1, +1 or 0, respectively if the solution proposed is worse, better or equal on satisfying the specific need to a solution defined as a reference (market).

The solution to use as a reference for the in the Pugh matrix should be either one of the best solution of the market (e.g.: Booking) or the solution AS-IS that is currently provided to the customer.

The Pugh result is given by the sum of all the scores into rows and it is representative of much innovative and useful solution is.

As an example, according to results in the PUGH matrix, the most innovative solutions are the creation of a social network and the external company interface (EDI).

However, within a strategy plan definition such solutions might be risky due to the investments involved, more IT complexity to manage and agreements with stakeholders.

On the contrary, WEB user interface and Visual Charts, that have the second highest score (3) might be easily implemented and ready to use by the users of TripAdvisor. Thus, these solutions might be developed in order to quickly get a competitive advantage.

Not necessarily, the highest Pugh score is the best solution must be choosen. In this sense, the Pugh matrix is useful, rather than univocally determining one IT initiative, to encourage and stimulate a well-defined strategy with a proper staging.

In particular, in a strategy plan based on Pugh’s results it might be stated that a social network should be created only when the customer engagement has been improved enough thanks to WEB user interface and Visual Charts. By doing so, it is possible to leverage the customer commitment for achieving the network effect when promoting the social network initiative.

Similarly, if becoming a platform for an integrated supply chain is one of the long-term objectives, a proper staging and pace of the related IT initiatives should be defined in a way that fits the company DNA (see A question about IT change management: does the DNA of the company fit your IT vendor?).

For example, if TripAdvisor is a “cautious adopter”, it will better to first implement restaurateur’s interface IT initiative in order to engage them and then involve also suppliers with supplier’s interface.

Furthermore, as an example, specifically for the data analytics and predictive tool IT solutions (requirements), the KPIs to adopt are linked with the key performances evaluated in the QFD matrix through the need “providing statistics and reports” (see Table in New IT Innovation Development (N.IT.I.D) method Step 4: Evaluate Solutions).

In particular, the key parameters are data redundancy, correlation, representatives, etc. as a measure of the quality of the data to gather and collect. In such a way, it will be ensured reliable information and insights by considering all the relevant aspects: information theory, statistic, control theory and psychology (see Caution!!! BigData S.L.I.P.S.: five tips when using analytics).

With the Step 5 (Select Solution), the N.IT.I.D method for developing new business model thanks to BigData is accomplished.

So… Would Tripadvisor adopt new BigData initiatives?

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What Logistic, Supply Chains and Telecommunication have in common? (part 2) Mr “Lean” Hartley-Shannon!


In the previous post:

What Logistic, Supply Chains and Telecommunication have in common? Mr “Lean” Kendall!

the queue theory links together telecommunication and supply chains management (SCM) since both actually share the same issue: how to deal with queues?

In order to achieve a certain Time To Delivery, according to queue theory, there are two approaches:

  1. increase inventories in order to compensate demand volatility.
  2. increase velocity that means achieving low lead times (production, supplies, deliveries) in terms of material flows and information flows as well.

Anyhow, how to face market demand volatility providing to customers the same Time To Delivery (velocity) without increasing inventories (waste of resources)?

Nowadays markets are more volatile than in the past and customers are expecting short time to delivery (see the same day of delivery battle between amazon and Ebay).

How to be more reactive toward changes in market demand?

Market Volatility, Frequency and Shannon-Hartley sampling theorem

A market demand is commonly drawn in a chart and it may looks like in the picture below where:

  • T = is the reference period when measuring the market demand. Actually, with regards to S&OP (Sales & Operation Planning), is when customers’ orders are aggregated for defining the schedules for the next period. (es. 1 month).
  • Si = is the level of the demand (aggregated orders) at time i. For example S1 = 200 pz in January (i=1), S2 = 150 pz (i=2) in February and so on.

Signal_Sampling

Well, according to Shannon-Hartley theorem T is the sampling period. Intuitively, the shorter the period the better signal changes are tracked.

In particular, given T the sampling period and (bandwidth) the highest frequency that is wanted to be recorded, we have that:

T must be lower than 1 / (2*B)

And what does this mean in practice when dealing with demand volatility?

As an example, it means that if customers’ orders are aggregated once per month, no more than a change within a period of 2 months can be managed by the company.

No matter if MRPs, TQM, Lean Manufacturing and other tools are in place.

Batches, Queues, One Piece Flow and Lean Thinking

According to Lean Thinking (see to James Womack), the challenge is switching from batch & queue paradigm to one piece flow manufacturing. That is the philosophy for reducing waste: inventories and time.

Batch & queue paradigm is the main cause of waste, both in terms of high inventories (low liquidity for investments) and time (effectiveness).

Companies that are re-thinking theirs business model towards a one piece flow approach will achieve operational excellence and market effectiveness.

In practice, achieving one piece flow means being able to operate with high frequencies(*):

  1. processing customers’ orders once a day instead of once a week
  2. production planning once a week instead of once a month
  3. production scheduling once a day instead of once per month
  4. and negotiate with suppliers weekly instead of monthly deliveries.

…and here where issues come out.

Attempting to speed-up processes and activities along the value chain (production, order management, deliveries, supplies,…) it’s actually an opportunity for:

  • discovering unproductive tasks along the flow, both material and informational
  • useless complexity (product mix, BOMs,…)
  • technology legacy (machinery, IT systems)
  • the need for company training and personal engagement on continuous improvements

There are all constraints for improving velocity and TTD.

(*) point 1,2 and 3 are part of the S&OP (Sales and Operating Planning)

…So: can you guess which is the “bandwidth” of your company? Ask to Mr. Shannon and Mr. Hartley

Acknowledged that:

  • markets are getting more and more volatile
  • TTDs required by customers are getting shorter and shorter

why frequency and tack time are so important in lean manufacturing as well as the demand planning period for S&OP?

It can be inferred that, according to Shannon-Hartely sampling theorem, it’s because the demand planning period (S&OP) is strictly correlated with the ability of the company to react on changes in the market.

In particular:
T is the planning period so that only one change in the demand within a period of 2T can be handled by the company without safety stocks.

From another perspective, what if the company attempts to reduce the planning period T?

There is a T_limit, due to many constraints such as lead times (suppliers, cycles,…), set-ups, shipments,… where a further reduction of the planning period will not produce significant improvements in terms of inventory reduction and TTD.

Again, thanks to Shannon-Hartely sampling theorem, the T_limit defines a kind of company bandwidth, a KPI for measuring the ability of the company to mange market volatility without increasing inventories.

In particular:

T_limit is the shortest planning period where no significant improvements in terms of inventory reduction can be achieved by increasing the freguency planning, and the company bandwidth B is defined as 1 / (2*T_limit)

For example:

  • company bandwidth B = 1 changes / 1 month. That means that the company can react to demand changes once per month without increasing inventories.
  • the T_limit is equal to  1 / (2*B) = 1 / (2*1) = 0.5 month. Thus, lowering the demand planning period below 2 times per month does not produce any significant improvement and inventory reduction.

So, since  Lean Manufacturing implies achieving one piece flow and ability to operate with high frequencies (bandwidth),…

can you guess which is the bandwidth in your company?

SCM_and_Telecommunication_Part2

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New IT Innovation Development (N.IT.I.D) method Step 4: Evaluate Solutions (Tripadvisor Case Study)


NITID-Evaluate_Solutions

See also:

After brainstorming new idea and organize them, the next step of the N.IT.I.D. method is to evaluate the solution proposed for the TripAdvsor case study.

The KJ method in the Step 3 (Organize), it has been possible to organize the un-structured brainstormed ideas in a structure way. The next phase is to connect all the ideas grouped with KJ method with the key performances needed in order to satisfy new functionalities.

In order to evaluate the solutions, all the key performances must be measurable. For example, the “facilitate the process” BigData initiation needs a new WEB interface to develop in order to create a list of pending reviews. In this case, some key measurable parameters for the interface should be the delay and inconsistency between the pending reviews shown and the incoming new receipts.

In the Table below are shown all the BigData ideas, IT infrastructures required and the KEY parameters that should be considered respectively as:

  • new needs
  • requirements
  • and Key Performance Indicators (KPIs)

BigData_Initiative - needs, requirements and KPIs

By putting needs into rows and the list of KPIs listed in the Table into columns, it is possible to create the QFD (Quality Function Development) matrix (see Figure below).

BigData Initiative QFD Matrix

In this example it has been assigned a score for each KPI with values X (no relations), 3 (weak relation) or 9 (strong relation) and an importance rating (e.g. from 0 to 9) for each new need accordingly to the priorities and objectives of the company.

For example, the importance rating should be assessed by considering factors such as the customer value curve, opportunity to innovate for getting a competitive advantage or risks (e.g.: disruptive innovations from competitors). Finally, the QFD score for each KPI is given by the sum of the scores intercepted by weighting (multiplying) them accordingly to the importance rating.

The aim of the QFD matrix is to link in a structured way the ideas (needs) with the key performances. Moreover, by assigning a score for each KPIs that measure its importance in order to satisfy the need it is possible to obtain an indicator of relevance for each key performance.

In the example, KPI inconsistencies (fake reviews and Negative SEO) is the most relevant KPI to consider since got the highest score (117).

Meanwhile, according to the importance rating, the most relevant ideas are Engage Customers and Facilitate the Process.

However, are they the ones that should be really implemented by TripAdvisor?

To be continued…

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What Logistic, Supply Chains and Telecommunication have in common? Mr “Lean” Kendall!


In telecommunication engineering, queue’s theory is applied whenever dealing with design of telecommunication networks.

Anyhow, actually in our every day life we are all “victims” of queues. For example, when waiting to pay at the supermarket, when blocked in the traffic jam and when, as a customer, waiting the delivery of a purchased item.

Or, when dealing with Supply Chains, delivery delays and high level of stocks.

After almost ten years from University, it has been exiting for me discovered that the same principles behind the queue’s theory in Telecommunication can be applied in a totally different field where I work: logistic and supply chain.

Anyhow, which are the principles that telecommunication and supply chain management (SCM) have in common? They both could be described by using a specific statistical model “A/B/k”.

“A/B/k” is the so called Kendall’s notification A/B/k where:

  • A: it represents the statistical model of new entries (e.g. a new call phone, a new client at the bank agency,…),  in the queue that suit best the “real” world. For example, M stands for a Markovian (memory less) process, E an Erlang distribution process and so on
  • B: it describes how the entries in the queue are processes and thus theirs statistics. It could be the same model as for arrivals or different.
  • k: is number of places of the “waiting area”. If k=1 it means that new arrivals will be discharged if new entries occur. While if k=5, as an example, there are 4 places available for new arrivals till a new entry can be processed in the queue.

Apart from the statistical models characterizing arrivals and processing, when designing a simple telecommunication system there are mainly two constraint:

  1. the capacity of the telecommunication channel. How many calls per minute can be processed? Or how many Gbytes/s can be provided by a network connection?
  2.  the memory available that is the number k in the Kendall’s notification.

Statistics apart, there is and hidden rule behind:

Channel capacity and Memory Available are Link each other. Low Channel Capacity might be Compensated by Increasing the Memory Available.

So, what a telecommunication network described with a Kendall’s notification have in common with SCM?

  1. channel capacity = velocity on handling both material and information among Supply Chain
  2. memory = level of inventory

SCM_and_Telecommunication

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New IT Innovation Development (N.IT.I.D) method Step 3: Organize (Tripadvisor Case Study)


NITID-Organize

See also:

A new business model for Tripadvisor has been developed thanks to BigData IT Innovations.

After brainstorming (Step 1) and then simplifying (Step 2) the founded new opportunities emerged from such a new business model, the next step for the N.IT.ID method is: Organize.

The purpose of organizing is to obtain a set of ideas and innovations that are structured according to a criteria that will be useful during the remaining two steps 4 and 5: Evaluate and Select.

So, after Step 2- Simplify, on the table there are the following opportunities for Tripadvisor thanks to BigData Innovation:

A) Facilitate the Process

B) Establish an Integrated Supply Chain

C) Create Customer Experiences

D) Engage Customers

E) Provide Statistics and Reports

 The Step 3 – Organize, consist on the following procedure:

  1. unify the remaining ideas into rational association of affinity group;
  2. rank the groups;
  3. group the unified ideas into a rational association affinity group (2nd level group) as it has been done at point 1;
  4. assign to each 2nd level group a general topic (avoid a list of ideas) or a common theme;
  5. identify relations among groups (correlations, dependencies,…).

In details:

1) Unify the remaining ideas into rational association of affinity group

In order to create affinity groups, it is necessary to define a criteria. Let’s assume as a criteria the function in the company (value chain), that would be involved for each idea.

With such a criteria the affinity groups are as follows:

Affinity_Groups

In particular, within the organization of Tripadvisor, A) facilitating the process and B) establishing an integrated supply chain are about its Operations’ activities.

While C) Creating Customers Experiences and D) Engaging customers they are responsibilities under Sales & Marketing department.

Finally, D) Providing Statistics and Reports might be considered as an additional Service (e.g.: after sales).

2) Rank the groups

As it has been done during the previous N.IT.I.D Step 2 – Simplify, it might be useful to further reduce the number of new initiatives by ranking the affinity groups and eliminating those groups that are less important.

For example, each team member should give a vote between 1 to 6 accordingly to its perception of importance (1 = low, 6 = very high) and then keep only the highly scored groups.

In this case, since there are only three groups, it does not make sense eliminate any groups.

Better would be to keep all the three groups for the next N.IT.I.D. – Step: Evaluate.

3) Group the unified ideas into a rational association of affinity group (2nd level groups)

In a similar way at point 1, group again the groups of ideas that are similar according to another criteria.

Using as a second criteria the Stakeholder potentially involved that are Customer, Suppliers (Restaurateurs and Hotels) and Collaborators, here below the 2nd level affinity groups:2nd_Level_GroupsIn particular, Customers & Suppliers are engaged in the idea A) facilitating the process and B) establishing an integrated supply chain.

While, Customers & Collaborators  are involved for C) Creating Customers Experiences and D) Engaging customers.

Finally, D) Providing Statistics and Reports might be considered as an additional Service (e.g.: after sales) for Suppliers.

4) Assign to each 2nd level group a general topic or common theme

As for N.IT.I.D Step 2 – Simplify, define a general topic or common theme that labels each 2nd level groups.

As labels for 2nd level groups just keep the stakeholder involved so that the general topics are:

  • Customers & Suppliers
  • Customers & Collaborators
  • Suppliers

5) Identify relations among groups (correlations, dependencies,…).

The last point is to identify relations among the 2nd level groups. In particular, as it is shown in the Figure below, there are two relations: one that is related to customers and one that is related to suppliers.

Precisely, the customer as a stakeholder create a link between “facilitate the process” and “engage customer” functionalities, while suppliers enable a connection between “integrated supply chain” and “provide statistics” ideas.

Groups_of_Ideas

An example how it looks like…

The Step 3 – Organize is actually the so called KJ Method developed by Jiro Kawakita.

Writing all the ideas into cards and using a whiteboard where to post them, it would be useful in order to have always the view of the “big picture” during the process.

Here below an example of it might look like a N.IT.ID process after Organize (Step 3).

KJ Method

To be continued…

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New IT Innovation Development (N.IT.I.D) method Step 2: Simplify (Tripadvisor Case Study)


NITID-Simplify

See also: New IT Innovation Development (N.IT.I.D) method Step 2: Simplify (Tripadvisor Case Study).

Thanks to the new data available for Tripadvisor, it has been applied the N.IT.I.D. process, and after the first step (Brainstorming), there are on the table the following opportunities:

1) Facilitate the process of the reviews for users by updating a list of “pending reviews” to fill once a new bill in a restaurant\hotel has been recorded.

2) Create “customer experiences” through new visualization charts such as a map of visited restaurants and hotels and\or a social network that connect users together in order to share the experiences.

3) Engage customers by creating synergies with loyalty programs.

4) Provide statistics and reports that might be useful to restaurateurs and hotel managers.

5) Establish an integrated supply chain by providing further additional services to restaurateurs and hotels.

All these ideas required investments, in terms of IT infrastructures, human resources and agreements with stakeholders or third parties. Will such investments have a return?

Hard to say now. Better first to jump at the second Step of the N.IT.I.D. process: Simplify.

A brainstorming session usually produce a redundant, inconsistent and  sometimes irrelevant set of ideas. Thus, a rough simplification could be done as follows:

1. Give to each idea a senentence\image

The idea\image should identify briefly the concept. In this case, simply let’s keep as images for the opportunities mentioned above the words in bold: facilitate the process, create customer experiences, engage customers, provide statistics and reports, establish an integrated supply chain.

2. Remove redundant ideas

After giving a simplified sentence, some ideas might be redundant. In this case, no redundancies emerged and thus all the idea should be kept on the table.

3. Rank each idea

With a set ideas that are unique (no redundancies) a vote among all the team members should rank the opportunities. For example, each member can give to each idea a score between 1 to 6: 1 not relevant at all and 6 extremely relevant.

The sum of the votes than will rank all the opportunities by theirs relevance.

An important recommendation: when ranking, each team member should evaluate ideas with a score between 1 and 6, without providing any justification. The vote should be only about perceptions, intuitions, and feelings. As Edward de Bono would say: “wear the red hat!” (see 6 Thinking Hats).

4. Keep only the most relevant ideas

After ranking all the ideas, the group might decide to keep only the most relevant ones (e.g.: first ten idea). Anyhow, do not throw away the removed ideas. Keep them in a temporary basket because they might be useful during steps 4 and 5 (Evaluate and Select solutions).

In our case, since there are only five items, all the ideas will be kept as important for the next step: Organize.

To be continued…

Feelink – Feel & Think approach for doing life!

New IT Innovation Development (N.IT.I.D) method Step 1: Brain Storming (Tripadvisor Case Study)


 

NITID-BrainStorming

Immagine that a business model described in “New IT Innovation Development NITID: Tripadvisor Case Study” is in place where new data is available for Tripdavisor:

1) the receipt (WHAT)

2) the client user ID (WHO)

3) the GEO position of the restaurant (WHERE)

The purpose of collecting such data is to ensure a better service for customers by ensuring an effective countermeasure against Negative SEO tactics.

Anyhow, is this really all? How such a new data availability might be exploited? This is the aim of the NITID method: find new business opportunities that might arise from data.

Commonly, in a creative process, the first step is brainstorming. By putting all the ideas on the table without any kind of criticism, judgments and filters, here below a list of new business opportunities that a brainstorming session applied to the Tripadvisor case might generate:

1) Facilitate the process of the reviews for users by updating a list of “pending reviews” to fill once a new bill in a restaurant\hotel has been recorded. In such a way the user, when log in to TripAdvisor’s website, doesn’t need to search for the restaurateur to be reviewed since a pending review connected to the restaurant\hotel is available  Furthermore, the number of total reviews will increase since the review process has been simplified for customers.

2) Create “customer experiences” through new visualization charts such as a map of visited restaurants and hotels and\or a social network that connect users together in order to share the experiences.

3) Engage customers by creating synergies with loyalty programs and companies (e.g.: Nectar) and provide gifts to customers who deliver more reviews.

4) Provide statistics and reports that might be useful to restaurateurs and hotel managers: trends, demand forecast, seasonality, sentiment,….

5) Establish an integrated supply chain by providing further additional services to restaurateurs and hotels. In particular, the demand forecasts should be shared with restaurateurs and hotels’ suppliers by recording all the food\goods consumed by linking them with the receipt. For example, a week in a room requires three units of soap or for cooking a steak in a restaurant are needed 100 grams of meat plus 1 mg of salt and 5 grams of olive oil. By using this data it’s possible to establish a logistic platform that might provide a competitive advantage both for buyer (restaurateurs and hotels) and suppliers. In particular, buyers, and especially small entrepreneurs that cannot invest and maintain complex IT infrastructures, might improve theirs inventory turnovers by having a more granular and detailed consumption of material. Meanwhile, local suppliers might have additional information regarding consumptions and level of inventories of theirs clients and thus enable more frequent on time deliveries and\or with a small amount. Such a solution might be useful for enabling an advanced Demand Driven Supply Chain (DDSC). EBay’s already told us with its “same day delivery” business model where small retailers have became a network of a distribuited inventory (see: “EBay expands same-day delivery in local battle with Amazon“).

Maybe, or better for sure, there are many and many issues regarding those new business opportunities:

Why changing and expanding the business model of Tripadvisor beyond core activities?

Why to invest in new relations, IT infrastructure, and skills?

What about the issue of data privacy?

Anyhow, making questions, having doubts and putting barriers are not allowed when brainstorming.

As when dreaming:

Logic will get you from A to B. Imagination will take you everywhere (Albert Einstein).

Feelink – Feel & Think approach for doing life!

New IT Innovation Development (NITID) method: Tripadvisor Case Study


NITID-Tripadvisor

How to fight Negative SEO tactics? Think about the case of Tripadvisor and imagine a business model as below:

1) eat a meal in the restaurant (e.g.: “La bella vita”) pay the receipt with a User ID Card (e.g.: loyalty\member card).

2) Then the consumption will be sent and registered in a TripAdvisor data base as “consumption to be reviewed”. That could be nowadays even easier than 10 years ago if you since the technology available such as card reader, smartphones, apps, are cheap and well-known by end users

3) You go home and since you have enjoyed the delicious spaghetti at “La bella vita” you decide to post a review in Tripadvisor. Since there is a consumption associated to you, your review will be validated and thus not consider as Positive\Negative SEO tactic.

4) The competition around “La bella vita” is challenging and the main competitor, “The Beagle Boys’s Pizza”, pretty tough. “The Beagle Boys” is highly pushing a Negative SEO tactic and they usually attempt to write bad reviews against “La bella Vita”. Unfortunately, since no consumption is pending as “to be reviewed”, the comment in Tripadvisor will be not considers as valid.

Well, such a business model might fix definitely the issue of Negative SEO for Tripadvisor and make their service much more useful for consumers…

…but, is that really all about implementing such a business model?

I mean, how is possible to fully exploit the investments needed for developing a new IT infrastructure?

Well, new data is actually now available for Tripadvisor since many consumptions are tracked. In particular, three key aspects has been registered:

1) WHAT (spaghetti)

2) WHO (user ID)

3) WHERE (GEO position of the restaurant)

That is actually what a BigData initiative is: leveraging the data available inside as well as outside the company not only for improving the core business but also for developing new ones.

How? By using a N.IT.I.D method: New IT Initiative Development.

Coming soon.

Feelink – Feel & Think approach for doing life!

A question about IT change management: does the DNA of the company fit your IT vendor?


Company_Vendor_DNAs

When delivering my final dissertation of the MBA program (here the link of a short presentation), along the research I’ve encountered the topic of IT Change Management.

As a matter of fact, whenever a company decides to implement IT innovations most likely new collaborations or partnerships with IT Vendors, consultants or third parties are needed. Usually, within a selection process, IT suppliers are evaluated accordingly to theirs know how and proven expertise. However, what about other aspects such as the agility to change, the ability to innovate and corporates’ cultures? Is there a potential fit or a misfit between the company and the selected IT vendor?

The company’s DNA

In order to avoid failures, it’s fundamental to set a pace for IT innovations that is affordable to the company according to its DNA. According to R. Ray Wang (@rwang0) there are two kind of attitudes when defining a DNA of a company: proactive vs. reactive and incremental vs transformational attitudes.

Cautious Adopters: proactive & incremental (about 30%). Such companies are looking for new technologies without waiting what other competitors do. However, they are willing to implement only the technologies that might play a key role in the future as well as they are not keen to consider the opportunity to change their business model even if the new technology enable a breakthrough.

Market Leaders proactive & transformational (about 5%). A market leader has the ability to sustain high paces of IT innovations as well as an organizational flexibility to change also its business model.

Laggards: reactive & incremental (30%). Such a company avoid any kind of risk of a self-disruptive innovation and integrates new technology only when other competitor succeed. In any case, without transforming its business model.

Fast Followers: reactive & transformational (15%). This of kind of DNA is able to mitigate the risk of adopting new technology by relying on the ability to change quickly the business model and the organization as a way to survive against disruptive innovation threats.

(More: “The Building Blocks of Successful Corporate IT“, HBR Blog)

IT Vendor’s DNA

What about the DNA of an IT Vendor? Gartner is well-known for providing a “magic” quadrant for everything and also for evaluating an IT vendor: completeness of vision and ability to change are the two main attitudes to consider.

Leaders: high completeness of vision & high ability to execute. As IT vendors, they are able not only to provide innovative services that works today but also to influence the market that theirs innovations are the best for the future. For these reason, such IT vendors might fit best a company with a leadership that wants to invest in new infrastructures\technology early and avoiding any risk due to technology (obsolescence, maintenance, etc.). However, also a cautious adopter (DNA) company that wants to develop a leader DNA should prefer IT leaders by relying on their ability to execute and play a key role as an influencer within a change management process.

Niche Players: low completeness of vision & low ability to execute. Is the case of IT vendors specialized in few functionalities and with low ability to execute due, for example, to a lack of resources (financial, operating) and power (network). However, such IT vendors might be useful for companies that need small technology changes without stringent delivery deadlines. For these reason IT niche players might be extremely useful for Laggard (DNA) companies.

Visionaries: high completeness of vision & low ability to execute. Is the kind of IT vendor that fit best a Cautious Adopter company’s DNA. Anyhow,  a Fast Follower (DNA) company that wants to innovate proactively rather than reactively, might get some useful insights from Visionaries third parties.

Challengers: low completeness of vision & high ability to execute. Is what Fast Follower companies usually need. However, a Cautious Adopter company that wants to improve its change management process should look for Challengers as IT vendors.

(More: “How Gartner Evaluates Vendors and Markets in Magic Quadrants and MarketScopes“, Gartner)

So, which IT Vendor to chose? Thinking about possible threats due to cultural and organizational divergences between the company and th IT vendor DNAs will ensure the implementation of the strategy as well as it will avoid market\operational risks and a waste of resources: why to invest on IT Vendor Leaders? Does the company really need it?

As a moral of this story, selecting the IT Vendors that fit best the company DNA is not so different as chosing relationships and friends in our every day life. Trusted and better relationships are guaranteed only by knowing ourselves as well as the others.

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