Becoming a Solution Provider – Challenges and success patterns
Köngisweg Lösungsanbieter – Herausforderungen und Erfolgsmuster
In the midst of a transformative shift, numerous R&D organizations are evolving from conventional product manufacturers or technology providers into solution-oriented entities. The objective is clear: providing customers with effective solutions to intricate problems. Essential to this evolution is not only adaptability and mastery of a growing portfolio complexity but also a focus on customer-centricity and an unwavering commitment to innovation. Simply put, the approach to solution development is undergoing a significant change, reshaping the entire landscape of R&D organizations. In this article, we aim to explore the ideal pathway toward becoming a proficient solution provider.
Characteristics of a solution
Solutions – in our context – are defined by the interplay of four characteristics:
Customer Centricity, Integrated Ecosystem, Diverse & Complete Bundle and Servitized Business Model. For example, a car manufacturer places itself in the living environment of its end customers and integrates the vehicle and mobility infrastructure in order to get from A to B or to supply the vehicle. A solution provider therefore describes a trend: away from the pure sale of a product and towards the provision of (additional) services and integration services
Suggestion to make this line sound more like the heading of a section: Evolution: Transitioning from Product Sales to Comprehensive Service and Integration Solutions
Reasons for taking such a path can vary. .
In order to become a solution provider, internal levers in particular must be used: In the short term, operations management processes should be addressed in order to increase customer loyalty and flexibility. In the medium term, customer management processes are coming into focus, as customer relationships are becoming increasingly important. And in the long term, innovation processes are important, as companies must successfully carry out co-development in order to generate solutions that stand out from the competition.
In addition, your own product can be supplemented and upgraded in quality by a trusted brand. An example of this is the Harman sound system at KiA or BOSE at Porsche. You can also buy in technology that you do not master yourself. Take the Blackberry Operation System, for example, which TTTech has integrated into its automated driving safety platform “MotionWise”.
In order to become a solution provider, internal levers in particular must be used:
In the short term, operations management processes should be addressed in order to increase customer loyalty and flexibility.
In the medium term, customer management processes are coming into focus, as customer relationships are becoming increasingly important.
And in the long term, innovation processes are important, as companies must successfully carry out co-development in order to generate solutions that stand out from the competition.
It also requires a willingness to learn and grow:
How do companies remain attractive for future employees (human capital)? How do companies achieve organizational resilience, remain flexible and learn quickly (organizational capital)? Or: How can knowledge be managed within the company (knowledge management)?
And from a financial perspective?
The aim is to increase shareholder value through an improved cost structure, make better use of assets, boost sales and increase customer benefit.
Expansion of skills
To effectively respond to the various drivers and levers propelling “solutization,” the organization must cultivate and enhance a range of essential skills.
Customer centricity, for example, requires new skills in the sales organization. If this was previously demonstrated through products and features, it is now a matter of presenting the value of solutions and communicating this to customers. Conversely, a deep understanding of the customer must be captured and fed back into the organization. Solution providers therefore increasingly find themselves in the role of orchestrator, as partners are also involved in solution design and delivery.
The development of solutions starts with systems thinking with the corresponding system-of-systems engineering capabilities.
For example, in order to be able to address different customer needs – and at the same time enable scalability – the architecture must be based on modularization. Solutions are therefore often only made possible by digital capabilities – ranging from data analysis to the secure, reliable operation of IT systems. .
Designing solutions also sometimes requires product components that have not been in the portfolio to date, and M&A offers opportunities to expand the portfolio.
Um das Portfolio zu erweitern, bietet M&A Möglichkeiten. In manchen solcher Lösungen finden sich neue Wertschöpfungsmodelle.
New value creation models can be found in some of these solutions, which means that R&D needs to rethink and think ahead.
Solution-oriented companies therefore need complementary expertise and active cross-functional collaboration.
Different solution grades
The path from product provider to solution provider can be described along the two axes of service performance and integration:
An increasing degree of service performance within a portfolio ultimately leads to pure servitization, where performance-based results are sold. Typically, companies offer products in combination with customer services, the use of which can be improved by complementary digital products. This can be observed, for example, in the area of mobile machinery, where uptime and optimized maintenance processes are important.
On the other axis is the increasing degree of integration: from closed HW/SW systems – such as in plant engineering – to open ecosystems that are integrated via platforms. Mobility ecosystems, for example, are multi-modular and open. For example, an electric car provider can start with a charging infrastructure as a closed system – and then open it up to enable new business opportunities.
Based on publicly available information, we have placed some of the companies in which 3DSE was involved in this matrix, including the interesting fact that Günther Walcher from Skidata developed the first machine-printed ski ticket with a photo in 1977. In 1982, the first access readers were installed in a ski resort. Today, Skidata is a full solution provider and offers everything a parking garage needs – from license plate recognition to EV charging and billing.
Interessant ist beispielsweise, dass Günther Walcher von Skidata 1977 das erste maschinell bedruckte Ski-Ticket mit Foto entwickelt hat. 1982 wurden die ersten Zutrittsleser in einem Skigebiet installiert. Heute ist Skidata Full-Solution Anbieter und bietet alles, was ein Parkhaus braucht – von der Kennzeichenerkennung über EV-Charging bis hin zum Billing.
Finally, let’s take a look at three specific examples – and their respective paths to becoming a solution provider.
At a german OEM was very vehicle-oriented: “We build a good vehicle and bring it to market.
Here it was necessary to not only look at the sale of the vehicle, but to focus on the entire customer journey – right up to the end of the product’s life. For example, a new function or an update can still be sold to the third owner of a vehicle
Of course, this requires a business model and some technological changes, such as OTA updates, system architecture, software platform, etc.
In the Mobile Machinery division, we accompanied an OEM to become a solution provider who initially delivered his product to the customer on a pallet: “Here is the best crane in the world. Do what you want with it.” Today, the basis of an order is to clarify what the end customer’s task is and then deliver everything that is needed for it. For example, a truck is also supplied with a mobile crane.
Last but not least, we accompanied an Agriculture OEM that now offers solutions ranging from tractors to complete production processes. These include their own products as well as third-party products. In order to accomplish this, a platform had to be developed into which an incredible number of products could be integrated. As is almost always the case, this resulted in a reorganization.
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