2017 05-design thinkingexternal
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The document provides an overview of design thinking and innovation. It discusses the need for innovation in industries facing disruption, competition, and the need for new skills. Design thinking is presented as an approach that includes inspiration, ideation, and implementation through iterative cycles. Key aspects of design thinking are identifying real customer needs through research and observation, generating solutions to address those needs, and evaluating whether solutions are technically feasible (win) and commercially viable (worth pursuing based on net present value analysis). Examples are given of how design thinking was applied at IDEO and how it could transform product development processes at organizations.
2017 05-design thinkingexternal
- 1. Source: Picture ‐ Design Thinking | Innovation in Products & Services Presentation Agenda Need for Innovation | What is Design Thinking | Real | Win | Worth | Summary Abhilash G, Principal Engineer, IDC/EPDA, 12 May 2017
- 2. Need for Innovation| Opportunity Identifying the Need Challenges facing every Industry – Why Innovate?¹ Disruption in Products Need for Speed Competency Build up I want to enter this market How can I speed up my time to market? Key Factors Impacting Innovation Continuous Learning Do it Yourself Time Innovation is the norm today! How to build the necessary competencies? How can we reskill ourselves? ‘If you’re not at least surfing through a half dozen technical magazines a month and reading a handful of books like this per year, then it won’t take a Cretaceous asteroid to make you a dinosaur.’ Tammy Noergaard in Embedded Systems Architecture ABB is in the forefront of innovation Techniques Tools IDEO Video: http://www.designthinkingnetwork.com/video/abc‐nightline‐ideo‐shopping‐cart
- 9. Arriving at Needs Statements Design Thinking | Real Case Study Insights into Customer Need lead to great products! Identifying Customer Need is Real? 1. Market Analysis and Competitor Feature Analysis: Search in Market & Competitor Product information will provide deep insights 2. How customers are using it? Do customers see value? 1. Using a combination of interviews, customer visit based observations, checking with Business, Marketing and Sales or other Functions. 3. Are there latent needs which were never addressed? Have we observed any? Insights from Analysis • 1. 9/10 thermostats not programmed • 2. Customers found them too complex • 3. Programming would have saved money and energy From Needs Statements •The installation is simple • 1 minute to fix the device on to wall. • Do settings by just a simple turn. •!. The thermostat learns from customer behaviour and programs itself. Nest Learning Thermostat • Install Nest Thermostat, turn up and down to your temperature needs. It learns your preferences over two weeks and creates a program itself. Mission Statement (Objective) – Identify Target Market/Customer base and identify Demographics. It includes a little green leaf on the display when entering a temperature range most likely saves money.
- 12. Preparing Decomposition Design Thinking | Win Decomposing the Concept Weigh needs and arrange them based on customer value Divide and Conquer : Define Decomposition of Concept based on functions, inputs, outputs, settings etc. Create map of customer usage of the product or service. CUSTOMER EXPERIENCE CYCLE EXAMPLE DECOMPOSITION – BY FUNCTION Nest Learning Thermostat Installation Settings Sense Learn Behavior Program Nest Learning Thermostat INPUTS OUTPUTS SETTINGS Temp Movement Ambient temperature settings Set Temp Range Energy Saving 1 2 3
- 13. Preparing Concepts Design Thinking | Win Concept Generation and Selection Arrive at the most promising solution! Concept generation through Individual work, Brainstorming, then coming to basic elements and then down‐selecting and combining concepts is a continuous process. Solution example 1. Prepare a tabular form where decompositions become columns. 2. Identify available and new approaches to solve these decomposed step. We can use SCAMPER. 3. The approach of concept generation and down selection is based on brainstorming, explore externally and explore internally. Installation Settings Sense Learn Behavior Program Stick by having a Magnet. Set values by typing. Temperature sensors Supervised Learning Change settings. Stick by means of screws. Set values by turning dial. Nest Sense ‐ Sense Nest Sense – Learning Algorithm Having small PLC Program Stick by means of 3M tape. AN OLDER THERMOSTAT NEST Thermostat: https://nest.com/support/article/Ab out‐SETTINGS
- 15. Design Thinking | Worth Is it worth it Analysis? Is it Worth ? : Net Present Value is positive. The Project is worth Pursuing Analysing Worth 1. You want to make an investment. Now you want to analyse the returns. 2. Simply put investing in business include risks. Therefore your expectation is return is higher than if the amount was invested in bank for the period for the period at a interest rate. 3. Net Present Value is a Comparison of this sort comparing Cash flows. NPV Link : http://financial‐ dictionary.thefreedictionary.com/net+present+value
- 16. Design Thinking | Worth Is it worth it Analysis? Details Year 0 Year 1 Year 2 Year 3 Sales Revenue ‐ B2B for Content Creation 12.95 14.95 17.27 Sales Revenue ‐ B2B for Hosting Services 1.30 1.70 2.42 Sales Revenue ‐ B2C 11.10 13.98 17.61 Total Revenue (Cash Inflow) 24.04 28.93 34.89 Business Set‐up Cost 1.00 Capital Cost of Content Creation Equipment 0.47 1.55 0.78 1.24 Application & Platform Development Cost 0.80 Total CapEx (Cash Outflow) 2.27 1.55 0.78 1.24 Annual Cost for Cloud Platform Services 0.20 0.22 0.24 Market Launch 1.00 1.00 Marketing Expenses 0.25 0.25 Content Creation Cost 6.55 9.61 14.25 Creative Team Salaries 1.37 2.01 2.09 Sales & Marketing Salaries 0.42 0.52 0.64 IT Support Team Salaries 0.30 0.37 0.46 General & Admin Salaries 0.14 0.18 0.22 Other Operating Expenses 0.50 0.62 0.76 Total OpEx (Cash Outflow) 1.00 10.49 13.77 18.92 Total Cash Outflow 3.27 12.04 14.54 20.16 Net Cash Flow ‐3.27 12.01 14.39 14.73 Period Present Value (@ 8% discount rate) ‐3.02 10.29 11.42 10.82 Net Present Value 29.52 Values in million US Dollars $ mn Investment will payback within first year Worst Cast Base Case Best Case NPV @ 8% discount rate 0.13 29.52 60.53 Market Size Projection Base Projection Worst Base Best B2B No. of Govt Tourism Development Bodies 196 No of Airlines 1,096 No of Major Hotel Chains 45,500 Others 5,000 Total 51,792 Market Size (Expected to Opt for VT) 10.0% 8.0% 10.0% 12.0% Expected Market Share in first year 5.0% 3.0% 5.0% 7.0% Market Share (No. of B2B customers) in first year 259 B2C World' Population 110,000,000,000 Business & Other Category Persons Targeted for Virtual Tourism 0.05% 0.04% 0.05% 0.06% People with disabilities 190,000,000 Target Market Size of Disabled persons for Virtual Tourism 0.25% 0.20% 0.25% 0.30% Market Size 55,475,000 Expected Market Share in first year 2.00% 1.00% 2.00% 2.50% Market Share (No. of B2C customers) in first year 1,109,500 Is it Worth ? : Net Present Value is positive. The Project is worth Pursuing Break‐Even The Market Size Considering B2B and B2C is big. The Discount Rate at 8% is considered high since there are risks involved in the initial market traction. The Total Revenue at end of Year 1 is 24.04 Million USD. The Total CAPEX is 2.27 Million USD. The Break Even happens within the 1st Year. Net Present Value is 29.52 Million USD. Uncertainty involved as considered in Worst and Base cases.
- 19. Real‐Win‐Worth| References Books and Material 1. Tim Brown, ‘Change By Design’‐ How Design Thinking Transforms Organizations and Inspires Innovation. 2. Karl Ulrich, Steve Eppinger, Anita Goyal, ‘Product Design and Development’, MIT Press. 3. Simon Sinek, ‘Start with Why’. 4. Don Norman, ‘Design of Everyday Things’. 5. C. K. Prahalad and M. S. Krishnan, ‘The New Age of Innovation: Driving Cocreated Value Through Global Networks’ 6. Course: Innovation in Products & Services : MIT Sloan – Emeritus ViewpublicationstatsViewpublicationstats