If a supplier enters new territory with innovative technologies and business models, we cannot expect that everything will be perfect from the start. Nevertheless, the market launch of business models 4.0 with the goal of addressing established fields of business often entails the risk of being too ambitious. This risk is exacerbated by customers who – partly due to their own competitive pressure, partly out of ignorance – expect too much from the new service solutions. This applies both to lengthy lists of required software functions and to tight schedules for project implementation.
As a result, we see a phenomenon, that computer specialists call “technical debt.” It refers to the problems that result at a later date from errors in software programming and documentation. These errors are typical of development projects under a lot of time pressure and cause additional work and expenditure for the later maintenance and further development of the software.
To avoid this problem, it makes sense for the supplier to handle a complex overall solution in stages. This means first setting priorities for software functions, then developing clearly defined modules, and implementing them step by step. This service product will then be complemented with further functions, completed over time, and later improved by updates.
Unfortunately, this approach is unfamiliar to many industrial enterprises. Engine makers, for example, do not first market individual elements of their products only to make additions at a later date. Hence, it is difficult for such companies to strike a balance between software development and the time or nature of their marketing efforts – even though too much pressure to present a perfect solution tends to hinder successful performances.
We can support this with the results of a study we conducted in 2015. We asked managers (suppliers and customers) from 243 European industrial goods companies about their success with the introduction of complex service solutions. Their responses showed that if the initiative for the design of a new solution came from the supplier its success was much higher than if it came from the customer.