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The typical linear and often siloed mindset rapidly has to fall away when it comes to measuring and metrics within companies. The measurement of inputs, throughout and outputs need to become far more focused on delivering speed and scale potential.

The outcome economy which is emerging has many implications within it and how we measure and value these will become increasingly important. Companies will need better data to calculate costs, evaluate its potential value and will be modelling far more the risks and tracking the factors required to deliver within any outcome-based value promised.

Pricing practices of a solutions end result will clearly change, as will the emergence of more predictability modelling of delivering certain outcomes and their potential value. We are becoming part of the connected world, comprising new market ecosystems and technology platforms that ‘look in’ and foresee, expect, and even predict new outcome results.

As we break down the present silo view of assets, bring it more into a system of assets and then we will evolve to a system of systems, this could fundamentally redefine businesses.

We are facing an evolution from “solutions” to “outcomes”.

Our measurement system has been established on “value-added” principles, or should have been at the very minimum. These have been based on “pushing out” the end result to customers, products and services  offered in particular bundles of broad appeal.

Today we need to target and develop offerings that meet specific customers’ true needs. The customer has been evolving into a far more knowledgeable and increasingly sophisticated one, as they are closer to the end market, hold the relevant data and can determine and decipher changing patterns far quicker than those further back in the supply chain. They have better visibility today. Often they feel they really don’t need the help of the salesperson, they have most of the means increasingly available to them, in a globally connected word, if they chose to exploit this.

The shift within suppliers of products and services has been taking place, of engaging deeper with customers’ needs. This focus to accelerate and determine their value to the customer, needs to have clearer understanding of their unique needs, and then set about designing and delivering true solutions that meet these needs and are seen as highly valuable. Strategic relationships are increasingly important for maintaining ‘line of sight and value’ to the customer.

As we move far more to the art of selling outcomes, it will bring together sophisticated capabilities, based around technology. There will be an increased recognition of ecosystems that are seen as needing to combine for addressing customer strategic issues where higher value can be extracted. These outcome-based approaches will be strategic, long-lasting partnerships where shared risk and reward become central to all parties. It changes the dynamics of relationships and offers radically different competitive advantages to ‘shoot for’.

The traits of outcome-based solutions

These will be very much custom based-solutions, they will be increasingly based on configurable solution- architecture. They will have clarity in “understanding the challenges and commitments to deliver specific outcomes on critical business needs”. They will be based on platforms that can design, deliver and operate the solutions.

This becomes more a customer partnering model, formed on a partner ecosystem strategy and clear solution architecture to allow it to flow. It will be designed for cross-organizational enablement, seeking - in real time - customer intelligence to provide a better outcome. The value for all involved is the opportunity to share in a greater value-creating solution that is based for on delivering the outcomes desired and needed.

How GE are switching their approach.

One outstanding example of how this outcome-based proposition is evolving, is by evaluating and reading about the GE Predix solution offering the software platform for the Industrial Internet through predictivity technologies covering health, extreme machines, lighting, aviation, oil & gas, transportation and energy. They are building a platform for igniting the next industrial revolution and their white paper outlines this.

This new industrial platform is here, we need to focus on outcomes.

With it has come the opportunity to make a broad-based change across the industrial world. The time to start is now and that requires a radical shift away from the past 20th century measuring and metrics model into recognizing the significant shit to redirecting your business to outcome solutions.

Each person within your organization should be measured on outcome-based solutions, I’d junk all those income, throughput and output ones, these are holding you back if you want to release innovation. We are all in need of just focusing on outcome-based solutions.

You certainly do “get what you measure” and that has a real challenge in today's connected world where we need to collaborate, connect and share far more to achieve greater value-adding outcomes.

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Paul Hobcraft

Paul Hobcraft

Paul Hobcraft researches and works across innovation, looking to develop novel innovation solutions and frameworks where appropriate. He provides possible answers to many issues associated with innovation with a range of solutions that underpin his advisory, coaching, and consulting work at www.agilityinnovation.com. His aim is to support individuals, teams, and organizations in their innovation activity applying what he has learned to further develop core innovation understanding so clients can achieve positive and sustaining results from their innovating activities to extend and build their capacity and capabilities.

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