Innovation Practice - Telenor

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5 Individual needs – and customer
control
Future communication technologies will be individualized,
intelligent, interactive, and integrating [5].
This is a significant change as compared to the last
century when technology supported the state, the system,
the super power, and big business.
Many people consider modern information and communication
technology not any more to be in opposition
to nature and the natural. On the contrary, technology
can be used to enhance our experiences and
lives in general. This opens for vast opportunities –
technology can find its way into almost any aspect
of life. Look to your own needs and those of your
family, friends, and neighbours, and you will see
vast opportunities!
But the new technology also allows market
researchers to learn to know their customers more
intimately than ever before. It is possible to trace the
customers almost step-by-step. In addition, newly
discovered techniques such as MRI therapy make it
possible to get visual images of the brain’s reaction to
various stimuli [7]. By comparing and analysing this
information service providers can draw pictures of
customers’ preferred behaviour and their attitudes
and beliefs. This gives them unprecedented opportunities
for product tailoring and marketing.
The mapping of attitudes opens frightening perspectives
in conjunction with the future fight for values,
but that’s another story!
6 Business model innovation
Innovation does not only mean to bring forward new
products. Improvement of business models is perhaps
even more profitable. Donald Mitchell and Carol Coles
[8] claim that the one thing that can most improve a
company’s growth and profitability is having the best
process for continuous business model innovation.
How is such business model innovation carried out?
Peter Drucker has said, “The purpose of a business is
to create a customer”. Mitchell and Coles rephrase
him, saying, “The purpose of a business is to create
and serve customers, while fairly rewarding stakeholders”.
With that balance in mind, a new and better
business model should help companies get customers
for themselves (faster than their competitors), provide
more benefits and fewer drawbacks than present
models, reprice offerings to encourage more use of
your products, reduce resources needed, etc.
An important point in Mitchell and Coles’ arguments
is that business model innovation is a continuous process.
You should first understand and follow your
ISSN 0085-7130 © Telenor ASA 2004
existing business model properly. Then a new model
should be specified and installed, including transition
procedures. New models should follow a clear vision,
and they must be tested to ensure shareholder value.
It should be noted that Mitchell and Coles do not see
a contradiction between innovation and cost cutting.
On the contrary, saving on harmful costs is part of
business model innovation along with price adjustments
to increase sales and product improvements
to serve and delight customers.
Recently, the focus on customer value has forced
companies to collaborate in order to deliver complete
products that delight their customers. This integration
along the value chain is perhaps the most obvious
trait of business model thinking presently. I discovered
this very clearly last fall during the ITU Telecom
event in Geneva. Sessions on business modelling
were focused on exactly this trend of integration
along the value chain.
There are numerous examples of such cooperative
efforts. Recently it was announced that France Télécom
and Ericsson have formed a partnership to
develop IP multimedia services for the consumer
market. Vodafone is working with Sharp to influence
the design of the Vodafone Live service. Well-known
and new companies are all there to gain influence
beyond their traditional position in the value chain.
This value chain integration may reach beyond traditional
business borders. An example is Hitachi’s collaboration
with car manufacturers and clothing companies
to introduce their Radio Frequency Identity
Device, a wee chip that can be attached to items in
shops and elsewhere.
As the Internet emerged, several companies chose
to exploit it to gain competitive advantage. Even if
there still is room for innovation to improve netbased
business, the fact that most successful companies
use it implies that it is not enough to excel. That
said; please note that Bill Gates believes that Web
Services will lead to a more advanced Internet that
promotes on-line inter-company business [9].
7 Needed: More and better ideas
During the last two years the need to generate more
and better ideas has come to the front of many companies’
agenda [10]. Communication and competition
has reduced the difference between companies in
most businesses and in telecommunications and
computing in particular. Innovation exploitation and
delivery processes are being streamlined and companies
across the world are able to achieve similar levels
of performance.
Telektronikk 2.2004