Part of a series inspired by SMITH’s Guide to: Commerce for Manufacturers.
You’d be hard pressed to find someone who wouldn’t want their business to become the next “Uber for” their business category, and investors are lining up to fund all sorts of experiments around firms that similarly innovate in the orchestration of value.
Two recent high-valuation B2C cases illustrate this, with mission-critical businesses in the form of dog walking and scooter rentals:
- “Uber for Dog Walkers” (Wag) recently received $300 million in investment.
- “Uber for Scooters” (Bird) recently received $100 million in investment
The level of investment is important to note as they act as bellwethers for new customer-centric operational models that analysts believe will be successful in the coming years.
WHAT IS “UBERIZATION” ANYWAY?
There are many factors that can be said to make a customer experience “Uber-like” – for example, leveraging underutilized 3rd party assets (aka. other people’s cars). This factor defines Uber’s current-state, as well as companies like AirBNB. But as Uber pushes towards managing a fleet of self-driving vehicles, this factor could be untrue in 10 years or less, and in the case of Bird, the company already owns the scooters it rents out.
So, there’s clearly more to “Uberization” than capitalizing on underutilized resources at scale.
The B2C use cases in this mindset are relatively obvious, and they exist in B2B as well. Here’s two interesting examples in construction supplies and warehousing for ecommerce, and an enabling layer in manufacturing.
“When a team on a construction project is missing something to continue on their critical path, whether it’s a tool or supplies, schedules start being impacted and costs start increasing. GoFor solves this with instant delivery via our app. A foreman selects what’s required, whether it’s a drill bit or lumber, and with a number of retail partners, we get it to the job site,” notes Brad Rollo, CEO of GoFor.io, a B2B startup operating in Ottawa, Edmonton, and Charlotte.
In the supply chain warehousing world, FLEXE is an excellent example of dynamic on-demand warehousing that promises reductions of 40-80% of warehouse rental space by leveraging the 20-30% of empty warehouse space that any given facility might have at any given moment. Originally developed for smaller enterprises, several Fortune 1000 firms now take advantage of the service.
Both are excellent examples of solutions that address market needs using existing products and services, but create new value through the orchestration of the resources (customer-centric value creation) and improve the customer experience by making it far less complicated to achieve the desired outcome.
An interesting enabling technology in manufacturing in this vein is MachiningCloud for CNC assemblies, which aggregates product data from multiple manufacturers and allows customers to configure their best-possible solution in 3D, and download data for CAM, Simulation, and Tool Management software.
A better, if more nebulous and widely-applicable, definition than leveraging underutilized 3rd party assets is that Uber is delivering Outcomes On-Demand through Customer-Centric Value Orchestration.
SIMPLE FOR CUSTOMERS IS HARD FOR BRANDS.
The key takeaway is that companies like Uber are making life simpler for customers by doing more of the complicated work themselves.
Outcomes On-Demand is the customer-facing value proposition with the goal to make it as simple as possible for the customer to get what they need, when they need it. Whether that’s a critical drill-bit during construction, more economical 3PL-like services through dynamic warehousing, or something incredibly more complicated, customers “want what they want when they want it” and the brand who best delivers that want will win.
Customer-centric value orchestration on the other hand, is the brand-side operational behavior required to deliver outcomes on-demand. This is where things get complicated, and why digital transformation isn’t just a matter of throwing products onto an ecommerce site with some good articles, 24 hour customer support chat, and a user forum.
In B2C, many of the desired outcomes are straightforward, satisfying basic human needs like food, shelter, transportation, and WiFi. Creating meaningful customer-centric and purpose-driven outcomes, however, requires complex back-end orchestration between multiple services.
In the process, as the level of access to data increases, we are starting to see more and more organizations leverage emerging technologies like Machine Learning to help coordinate experiences that are beginning to bring prediction into the mix. With prediction, automated systems can better service customers by anticipating needs and wants.
Uber for example, will in the very near future, predict when you’re about to order a car. They already have a good idea where you’re going before you tell them. Many consumer products and B2B service-oriented manufacturers are starting to get into the predictive CX game. Amazon’s DRS (Dash Replenishment Service) is currently winning the race as the leader in auto-replenishment solutions, as it’s (relatively speaking) straightforward to design and manufacture a product with DRS integrated. For example, a coffee machine that reorders the pods of coffee you want (basic counting logic) or a pool that knows when to reorder a cleaning (time since last cleaning, and potentially chemical testing thresholds).
The risk, as always, with Amazon, is that their elegant solution carries a price, which is diminished control over your brand, as they themselves work to deliver anything, anywhere, anytime. Some brands, like HP, have created their own autoreplenishment solutions that operate on their own platforms in order to maintain complete control (and margins) in their customer journey with this type of scenario.
OUTCOMES ON-DEMAND IN B2B
In B2B, many solutions like building cleaning and the required supplies, or spare machinery parts, are simple to execute in the “Outcomes On-Demand” model. Machinery, like a John Deere tractor or a Mack truck, can be outfitted with IoT computing for remote MRO or replenishment of parts and supplies (ie. tires, oil, filters). Most, however, are far more complex, requiring everything from consultations between chemical engineers to integration of CAD pipelines for fully integrated supply chains and JIT manufacturing.
Customers will always prefer models that provide “what they want when they want it” with more efficiency, regardless of whether they’re a consumer, accountant, or an engineer. The barrier is an organizations willingness to shift and cannibalize existing revenue models while bearing the cost to tackle the complexity of CX and technology orchestration around the customer that enables them.
TRANSFORM INTO A DUCKLING
The more-obvious use cases of “Uberization” in B2C are our bellwethers. The B2B takeaway isn’t to copy Uber, but to focus on the underlying desire for outcomes on-demand by creating elegant customer experiences that hide incredible efforts behind the curtains to orchestrate value around each customer. To the customer, the duckling glides. Under the water, there’s a lot of work going on.
Albert Meige is a European business thinker who outlined three pillars to enable these kind of open systems, whether they’re driven wholly internally or orchestrating open marketplaces:
- Embrace and Enhance Data
- Be Open
- Be Nimble and Quick
While data is clearly a critical element for building systems that are capable of autonomous operation and prediction, Openness is required to both accept insights from anywhere, but also to look outside the organization to see other parties as potential collaborators, and take a Blue Ocean POV with regards to data access and APIs.
The pillar that resonates most with me personally is the imperative of nimbleness. When these topics are discussed in business trades, or at-length in tomes of management wisdom, digital transformation becomes a monolithic figure.
But it can start with two people who have an idea for something new that improves the customer experience. Intrapreneurs inside your organization who have simple, testable experiments.
You don’t have to start by climbing Everest. A lot of people died doing that!
You can start by being nimble, with a small team trying to create change, focusing on little wins as you ladder up to wholesale world domination.
We think big (outcomes) and get our hands dirty in the details (orchestration). This is our bread and butter.
If this kind of stuff is keeping you up at night, you’re in good company. Whether you’re focused on architecting (or implementing) a full-scale transformation, or you want to R&D an innovative CX improvement (did someone say voice interfaces? Augmented Reality?) we’re all ears.