De-Risking Innovation

Author: Adrian Garcia, VP Research
Editor: Jesse Brodkey, VP Communications

Daito takes a measured approach to innovation. Too often, companies purchase turnkey software that is not fit for their needs. And when they engage in custom development, design teams add features not tied to real business value. Furthermore, data strategies that track and monitor the financial returns and operational performance gains expected from the investment are almost always non-existent.

Instead, Daito ensures innovation projects continually focus on tangible value and forecast the expected business and workforce impact. With those requirements always in sight, we design the entire experience to drive adoption and monitor returns. 

Problem

A customer believed a business operation was ripe for innovation, and that an off-the-shelf technology solution met their needs. The customer needed to know:

1. Is the project worth funding?

2. Is there a business case for purchasing the solution? 

3. What is the expected ROI?

4. What are the main drivers for the expected benefits?

5. How well does the off-the-shelf solution meet the needs?

6. And, will the workforce accept it? 

Approach

Every project should ask these fundamental questions at the start, but they are often overlooked or neglected. The lack of both solid and clear answers can mean the difference between a company remaining competitive, or becoming a victim to disruption because they invested in the wrong technologies and are less competitive as a result. To find answers, Daito took the comprehensive approach listed below: 

1. Daito conducted ethnographic studies, contextual inquiries, and user interviews regarding the workforces’ needs, work processes, and attitudes towards the off-the-shelf solution. 

2. We measured the workforces’ performance with the technology in trial runs against the vendors claims of what the technology will enable. 

3. We worked with both the customer and vendor to evaluate the technical capability of the solution and the cost and effort to implement with a focus on uncovering hidden costs.

Results

Findings were dramatic and changed the course towards a multi-year fleet wide solution. A business case showed a net present value of more than ten million in returns, with a break-even occurring within 3 years under a worst case scenario. 

However, challenges needed to be overcome. Findings showed the vendor solution did not contain key features needed to capture the real value or that the workforce needed. Furthermore, a pilot study showed that worker performance would not be elevated to the levels needed to justify the expense, and that hidden technical debt and implementation efforts would increase the total cost. Advantages were that the business challenges were real and that the workforce welcomed change, as long as the solution had the right functions and was properly designed.  

To capture real value, a solution would need different features better mapped to work operations. The user experience would need to be re-designed to amplify worker performance, and the cost would need to stay within the boundaries of the ROI analysis. More detailed findings are enumerated below:  

1. Daito determined the off-the-shelf vendor solution provided 16% of the core features needed to drive real business value. 

2. It was discovered the solution did not achieve the increase in workforce performance claimed by the vendor, even after controlling for practice effects. 

3. It was discovered the technical performance of the solution did not adhere to the customer’s corporate standards and there would be additional implementation and develop costs as a consequence. 

4. The customer’s workforce believed the business challenges were real and they were eager for a solution. Adoption potential was high. 

5. Daito identified key aspects of the business operation that are ripe for innovation and defined the features and needs that would increase operational performance and contribute to user delight.

6. We developed a business case containing: 

   1. Total potential savings from innovation 

   2. Key features and functions that will drive savings and value 

   3. Profitability and break-even analysis based on based on cost, implementation efforts, and expected workforce performance spread across various economic scenarios 

   4. Net Present Value based on expected returns and costs

7. We developed a roadmap tied to business value for V1 toV3, fleet-wide and provided concept designs depicting the ideal user experience.

8. We helped the customer explore different vendor options that were a closer match than the original one selected.

9. Customer decided to go with a different vendor and use a mixture of in-house and 3rd party development to control costs and hit expected pay back targets.

10. Daito provided change management consultation to facilitate adoption and monitor results.

Conclusion

By investigating real needs, Daito avoided the wrong software from being purchased, and helped the customer find the right vendors and the path forward. Daito also defined the ideal user experience and tied features to financial impact to ensure that efforts were being put into the right places. This allowed the customer to create a multi-year fleet wide roadmap based on expected returns and user delight.

Innovation must continually focus on delivering real business and employee value. The Silicon Valley mantra of “move fast and break things” has inspired enterprise companies to center on shipping technologies without doing due diligence to understand the impact to the business, employees, or society. As a result, many companies struggle to transform, adapt and renew, and stakeholders are negatively affected in the process. Daito stands in contrast to this philosophy by de-risking innovation and ensuring emerging technologies appropriately serve business, people, and society. We help ensure results by moving deliberately and fixing things.