Digitalising products and services the right way
There is no getting around digitalisation. For certain products, services, or functions, however, the question is whether it is really necessary. What is the added value of a smart cat box with its own app, a toothbrush with Bluetooth, or a toaster with an IP address? And how do digitalised products actually come about and what are the important things to remember in the process?
Insight in brief
- Products and services have to be digitalised with a focus on the needs of users
- The major challenge when it comes to digitalisation is defining the product
- Digitalisation often fails for reasons other than the technology itself
- Successful product developments require interdisciplinary cooperation
Digitalisation is finding its way into all spheres of life because it offers users a richer product experience and can also help generate added value. Still, there are countless poor examples, i.e. simple things that are made more complicated without offering users any real added value.
How does a digitalised product (idea) come about?
We often see digitalised products emerge in one of the following three ways: An existing product is digitalised. This usually requires adding connectivity as well as extra sensors and actuators. Taking something that is physically useful and adding a digital dimension is often the starting point for developing digital products.
An existing service is expanded by adding a physical twin to generate added value. This creates an opportunity to make new customer contacts that were inconceivable before. There are several practical examples in such areas as retail banking and burglary prevention.
A new/innovative product is created through a specific focus on the user. New ideas come about by analysing the product’s practical value. In many cases, the technology deployed for this purpose is no longer determined by the manufacturer’s skills and tools. Rather, it derives from the product’s ‘value proposition’. Take the Toniebox, for example, which is a streaming speaker developed from the ground up just for children. Its rudimentary interface is simple enough for a child to operate.
Digitalisation only reveals its full potential when you closely consider the added value it creates for users
One way to go about digitalisation is to modify existing products, but often this fails to achieve the desired market success. Take the aforementioned example of the electric toothbrush with Bluetooth, which includes an app showing how long the user has been brushing and other feedback. But who really wants to get up in the morning and first have to sleepily look for their phone, open the app and then stare at it for two minutes? In any case, an adult would probably only do this the first two or three times. But now put yourself in the shoes of a child and imagine that you have a virtual fairy who reminds you to brush left, right, top, bottom three times a day. I would be eager to get my toothbrush and tablet after every meal without being told.
This example demonstrates how simply digitalising products and services does not automatically generate added value. Instead, it has to be created with a clear idea in mind and in line with users’ needs.
When beginning development of a new product, we recommend interdisciplinary collaboration between the business, (end) customer, and technology sides of the project. Working from this original vision, all three should then fine-tune the project. In addition to considering the economic and technical feasibility, it is also crucial that you demonstrate the value for the customer, as well as their level of acceptance. It is important to quickly get feedback from the market during development in order to learn from it. Short iteration cycles allow you to fine-tune the product and to develop innovations with staying power.
When digitalisation fails, it is for reasons other than the technology itself.
The challenge with digitalisation is to define the product. The technologies in question have mostly been around for a long time. So, focus on the user experience – and not on the device.