Innovation process management of complex consumer products and services in new innovation paradigm – case location based business

Innovation is the word of this decade. According to innovation definitions, without positive sales impact and meaningful market share the company’s product or service has not been an innovation. Research problem of this master thesis is to find out what is the innovation process of complex new consumer products and services in new innovation paradigm. The objective is to get answers to two research questions: 1) What are the critical success factors what company should do when it is implementing the paradigm change in mass markets consumer business with complex products and services? 2) What is the process or framework one firm could follow? The research problem is looked from one company’s innovation creation process, networking and organization change management challenges point of views. Special focus is to look the research problem from an existing company perspective which is entering new business area. Innovation process management framework of complex new consumer products and services in new innovation paradigm has been created with support of several existing innovation theories. The new process framework includes the critical innovation process elements companies should take into consideration in their daily activities when they are in their new business innovation implementing process. Case company location based business implementation activities are studied via the new innovation process framework. This case study showed how important it is to manage the process, look how the target market and the competition in it is developing during company’s own innovation process, make decisions at right time and from beginning plan and implement the organization change management as one activity in the innovation process. In the end this master thesis showed that all companies need to create their own innovation process master plan with milestones and activities. One plan does not fit all, but all companies can start their planning from the new innovation process what was introduced in this master thesis.

Managing regulatory risks when outsourcing network-related services in the electricity distribution sector

Deregulation of the electricity sector liberated the electricity sale and production for competitive forces while in the network business, electricity transmission and distribution, natural monopoly positions were recognised. Deregulation was accompanied by efficiencyoriented thinking on the whole electricity supply industry. For electricity distribution this meant a transition from a public service towards profit-driven business guided by economic regulation. Regulation is the primary means to enforce societal and other goals in the regulated monopoly sector. The design of economic regulation is concerned with two main attributes; end-customer price and quality of electricity distribution services. Regulation limits the costs of the regulated company but also defines the desired quality of monopoly services. The characteristics of the regulatory framework and the incentives it provides are therefore decisive for the electricity distribution sector. Regulation is not a static factor; changes in the regulatory practices cause discontinuity points, which in turn generate risks. A variety of social and environmental concerns together with technological advancements have emphasised the relevance of quality regulation, which is expected to lead to the large-scale replacement of overhead lines with underground cables. The electricity network construction activity is therefore currently witnessing revolutionary changes in its competitive landscape. In a business characterised by high statutory involvement and a high level of sunk costs, recognising and understanding the regulatory risks becomes a key success factor. As a response, electricity distribution companies have turned into outsourcing to attain efficiency and quality goals. This doctoral thesis addresses the impacts of regulatory risks on electricity network construction, which is a commonly outsourced activity in the electricity distribution network sector. The chosen research approach is characterised as an action analytical research on account of the fact that regulatory risks are greatly dependent on the individual nature of the regulatory regime applied in the electricity distribution sector. The main contribution of this doctoral thesis is to develop a concept for recognising and managing the business risks stemming from economic regulation. The degree of outsourcing in the sector is expected to increase in years to come. The results of the research provide new knowledge to manage the regulatory risks when outsourcing services.

The Role of Knowledge Management in Developing Common Business Mindset in a Firm

Yrityksen yhteisellä liiketoimintanäkemyksellä tarkoitetaan organisaation kykyä ymmärtää liiketoiminnan olennaiset elementit, ja varmistaa, että työntekijöillä ja yrityksen asiakkailla on positiivinen ja yhdenmukainen kuva ja kokemus kyseisestä organisaatiosta. Tämän Pro-gradu – tutkielman tuloksena kehitettiin mittari, jolla yhteisen liiketoimintanäkemyksen tilaa voidaan yrityksessä mitata. Lisäksi tutkielma selvittää tietojohtamisen merkitystä yhteisen liiketoimintanäkemyksen kehityksessä. Tutkimusaineisto kerättiin Internet -kyselytutkimuksella, johon saatiin 158 vastausta. Aineisto analysoitiin tilastollisilla menetelmillä. Tutkimustulokset viittaavat vahvasti siihen, että tiedon jakamisella ja verkostoitumisella on tilastollisesti merkittävä vaikutus yhteisen liiketoimintanäkemyksen kehittymisessä. Tästä syystä yritysten tulisi integroida tietojohtamisen periaatteet strategioihinsa ja luoda systemaattinen malli, joka kannustaa organisaatiota tiedon jakamiseen ja verkostoitumiseen.

The role of business information and knowledge in sales steering

The objective of this study is to find out how sales management can be optimally supported with business information and knowledge. The first chapters of the study focus on theoretical literature about sales planning, sales steering, business intelligence, and knowledge management. The empirical part of the study is a case study for which the material was collected through interviews with the selected people of the company. The findings from the interviews were analyzed, and possible suggestions for solving the problems were made. The case study revealed that sales management requires a multitude of metrics and reports to steer the sales to the desired direction. The information sources can be internal and external, and the optimal solution for satisfying the information needs is a combination of both of these. The simple information should be turned into knowledge by merging the intellectual assets with the information from the firm’s transaction processing systems, in order to promote organizational learning and effective decision-making.

Towards a Strategic Sales Channel Partnership: A Case Study from the IT Services Industry

Strategic partnerships have become a key to competitive advantage and success in a dynamic, global business environment. Partnering provides a strategic response to complex offerings that need multiple sources of technology and knowledge, allowing companies to offer a wider range of services and solutions to meet their customers’ needs. Companies that collaborate with strategic partners in sales channels may significantly grow their business and improve their prospects of winning major contracts. As a consequence, companies are increasingly transforming their go-to-market strategies and sales channel structures to align with the need to create added value to customers together with a business partner. The research objective of this case study is to review and assess the success of an established sales channel partnership in IT services industry and to find ways how to develop it towards a strategic collaboration. The research consists of two main parts. The first part reviews the literature, concluding with the identification of the critical success factors for partnering. The second part sets out for the case findings, focusing on how the success of the established sales channel partnership is perceived by key executives within the partner organizations, and further what actions are required to make the sales channel partnership and joint go-to-market more strategic.

Integration in project business : mechanisms for integrating customers and the project network during the life-cycle of industrial projects

This thesis focuses on integration in project business, i.e. how projectbased companies organize their product and process structures when they deliver industrial solutions to their customers. The customers that invest in these solutions run their businesses in different geographical, political and economical environments, which should be acknowledged by the supplier when providing solutions comprising of larger and more complex scopes than previously supplied to these customers. This means that the suppliers are increasing their supply range by taking over some of the activities in the value chain that have traditionally been handled by the customer. In order to be able to provide the functioning solutions, including more engineering hours, technical equipment and a wider project network, a change is needed in the mindset in order to be able to carry out and take the required responsibility that these new approaches bring. For the supplier it is important to be able to integrate technical products, systems and services, but the supplier also needs to have the capabilities to integrate the cross-functional organizations and departments in the project network, the knowledge and information between and within these organizations and departments, along with inputs from the customer into the product and process structures during the lifecycle of the project under development. Hence, the main objective of this thesis is to explore the challenges of integration that industrial projects meet, and based on that, to suggest a concept of how to manage integration in project business by making use of integration mechanisms. Integration is considered the essential process for accomplishing an industrial project, whereas the accomplishment of the industrial project is considered to be the result of the integration. The thesis consists of an extended summary and four papers, that are based on three studies in which integration mechanisms for value creation in industrial project networks and the management of integration in project business have been explored. The research is based on an inductive approach where in particular the design, commissioning and operations functions of industrial projects have been studied, addressing entire project life-cycles. The studies have been conducted in the shipbuilding and power generation industries where the scopes of supply consist of stand-alone equipment, equipment and engineering, and turnkey solutions. These industrial solutions include demanding efforts in engineering and organization. Addressing the calls for more studies on the evolving value chains of integrated solutions, mechanisms for inter- and intra-organizational integration and subsequent value creation in project networks have been explored. The research results in thirteen integration mechanisms and a typology for integration is proposed. Managing integration consists of integrating the project network (the supplier and the sub-suppliers) and the customer (the customer’s business purpose, operations environment and the end-user) into the project by making use of integration mechanisms. The findings bring new insight into research on industrial project business by proposing integration of technology and engineering related elements with elements related to customer oriented business performance in contemporary project environments. Thirteen mechanisms for combining products and the processes needed to deliver projects are described and categorized according to the impact that they have on the management of knowledge and information. These mechanisms directly relate to the performance of the supplier, and consequently to the functioning of the solution that the project provides. This thesis offers ways to promote integration of knowledge and information during the lifecycle of industrial projects, enhancing the development towards innovative solutions in project business.

Knowledge sharing in intrafirm networks in organization

The objective of this study was research the shared knowledge and the means of sharing with the help of social network analysis. The purpose of this study was to give descriptive information to case-organization about its situational network status in different units. The premise of the study is the success of organizational competences and networks, especially when it comes to the sharing of knowledge. The research was accomplished in a TEKES –projects, Developing Network-Based Services – The Role of Competences and Networks COMNET –projects case-organization. Lappeenranta School of Business and the case-organization started the project in co-operation. The baseline for the study was organizational competencies and organizational networks as success factors, especially from the knowledge sharing’s point of view. The research was based on triangulation, which included pre-interviews, network analyses accomplished by Webropol –e-mail survey and qualitative interviews. The results indicated that regular unit meetings were experienced to be the most important method of knowledge sharing along with e-mailing, intranet and weekly bulletins. The co-operation between units was also experienced to be important when evaluating knowledge sharing and communication. The intrafirm network was experienced tight. Dispersed units and partly unclear means of information sharing were the biggest obstacles for information communication. Knowledge sharing, communication with others and trainings were seen important in the case-organization.

The Finnish it industries in transition. Defining and Measuring the Finnish Software Product and IT Services Industries by Applying Theoretical Frameworks

The starting point of this study is that the prevailing way to consider the Finnish IT industries and industry information often results in a limited and even skewed picture of the sector. The purpose of the study is to contribute and increase knowledge and understanding of the status, structure and evolution of the Finnish IT industries as well as the Finnish IT vendor field and competition. The focus is on software product and IT services industries which form a crucial part of all ICT industries. This study examines the Finnish IT sector from production (supply) as well as market (demand) perspective. The study is based on empirical information from multiple sources. Three research questions were formulated for the study. The first concerns the status of the Finnish IT industries considered by applying theoretical frameworks. The second research question targets at the basis for the future evolution of the Finnish IT industries and, finally, the third at the ability of the available definitions and indicators to describe the Finnish IT industries and IT markets. Major structural changes like technological changes and related innovations, globalization and new business models are drivers of the evolution of the IT industries. The findings of this study emphasize the significant role of IT services in the Finnish IT sector and in connection to that the ability to combine IT service skills, competences and practices with high level software skills also in the future. According to the study the Finnish IT enterprises and their customers have become increasingly dependent on global ecosystems and platforms, applications and IT services provided by global vendors. As a result, more IT decisions are made outside Finland. In addition, IT companies are facing new competition from other than IT industries bringing into market new substitutes. To respond to the new competition, IT firms seek growth by expanding beyond their traditional markets.. The changing global division of labor accentuates the need for accurate information of the IT sector but, at the same time, also makes it increasingly challenging to acquire the information needed. One of the main contributions of this study is to provide frameworks for describing the Finnish IT sector and its evolution. These frameworks help combine empirical information from various sources and make it easier to concretize the structures, volumes, relationships and interaction of both, the production and market side of the Finnish IT industry. Some frameworks provide tools to analyze the vendor field, competition and the basis for the future evolution of the IT industries. The observations of the study support the argument that static industry definitions and related classifications do not serve the information needs in dynamic industries, such as the IT industries. One of the main messages of this study is to emphasize the importance of understanding the definitions and starting points of different information sources. Simultaneously, in the structure and evolution of Finnish IT industries the number of employees has become a more valid and reliable measure than the revenue based indicators.

Education export as a form of knowledge transfer : The potential of Finnish education export in Chile

Knowledge transfer is a complex process. Knowledge transfer in the form of exporting education products from one system of education to another is particularly complicated, because each system has been developed in a particular context to meet the requirements seen as relevant at each time. National innovation systems are often seen to form an essential framework within which the development of a country, its economy and level of knowledge are considered and promoted. These systems are orientated towards the future, and as such they also provide a framework for the knowledge transfer related to the development of education. In the best of circumstances they are able to facilitate and boost this transfer both from the viewpoint of the provider and the recipient. The leading thought and the idea of the study is that education export is a form of knowledge transfer, which is illustrated by the existing models included. The purpose of this study is to explore, analyze and describe the factors and phenomena related to education export, and more specifically, those related to the experiences and potential of Finnish education export to Chile. For better understanding, of the multiplicity of the issue involved, the current status of education export between Finland and Chile and he existing efforts within the Finnish innovation network will be outlined as well as new forms of co-operation between Finland and Chile in educational matters explored. Several countries have started to commercialize their education system in order to establish themselves as emerging education exporters. Moreover, the demand for education reform is accurate in many developing countries. This offers a good match between Finland and Chile to be the example countries of the research. The main research findings suggest that there are several business areas in education export. These include degrees in education, training services and education technologies for example The factors that influence education export can be divided into four groups, including academic, cultural, political and economic aspects. Challenges to overcome include the lack of product or services to be sold, lack of market and cultural knowledge of the buyer country, financing and lack of suitable pricing model. National innovation systems could be seen as enabling entities for successful education export. The extensive networks that national innovation systems aim to form, could operate as a basis for joining the forces in selling knowledge as well as receiving knowledge in a constructive way.

Local Embeddedness and Knowledge Acquisition and How They Affect Finnish Business Operations in Russia

This pilot project aims examine the factors of the Finnish subsidiaries local embeddedness, their knowledge creation capabilities and the transfer mechanisms of new practices in the context of the Russian market. The research is designed as a multiple case study conducted with a qualitative approach. The empirical data consists of the interviews of the four Finnish case companies operating in the Kaluga region and three local partner companies. The deductive and inductive approaches were employed to conduct the analysis of the data. The propositions for the future study were developed in the conclusive chapters of the research, where we propose that the factor of the economy growth and industrialization matters in terms of subsidiaries’ role dedication, their knowledge creation capabilities, and direction of the knowledge flow within the local environment.

Profiling the Value of Industrial Maintenance Services

Industrial maintenance can be executed internally, acquired from the original equipment manufacturer or outsourced to a service provider, and this concludes in many different kind of business relationships. To maximize the total value in a maintenance business relationship it is important to know what the partner values. The value of maintenance services can be considered to consist of value elements and the perceived total value for the customer and the service provider is the sum of these value elements. The specific objectives of this thesis are to identify the most important value elements for the maintenance service customer and provider and also to recognize where the value elements differ. The study was executed as a statistical analysis using the survey method. The data has been collected by an online survey sent to 345 maintenance service professionals in Finland. In the survey, four different types of value elements were considered: the customer’s high critical and low critical items and the service provider’s core and support service. The most valued elements by the respondents were reliability, safety at work, environmental safety, and operator knowledge. The least valued elements were asset management factors and access to markets. Statistically significant differences in value elements between service types were also found. As a managerial implication a value gap profile is presented. This Master’s Thesis is part of the MaiSeMa (Industrial Maintenance Services in a Renewing Business Network: Identify, Model and Manage Value) research project where network decision models are created to identify, model and manage the value of maintenance services.

Customer knowledge processing in maintenance business: case study

The purpose of the study is to examine and increase knowledge on customer knowledge processing in B2B context from sales perspective. Further objectives include identifying possible inhibiting and enabling factors in each phase of the process. The theoretical framework is based on customer knowledge management literature. The study is a qualitative study, in which the research method utilized is a case study. The empirical part was implemented in a case company by conducting in-depth interviews with the company’s value-selling champions located internationally. Context was maintenance business. Altogether 17 interviews were conducted. The empirical findings indicate that customer knowledge processing has not been clearly defined within the maintenance business line. Main inhibiting factors in acquiring customer knowledge are lack of time and vast amount of customer knowledge received. Enabling factors recognized are good customer relationships and sales representatives’ communication skills. Internal dissemination of knowledge is mainly inhibited by lack of time and restrictions in customer relationship management systems. Enabling factors are composition of the sales team and updated customer knowledge. Inhibiting utilization is lack of goals to utilize the customer knowledge and a low quality of the knowledge. Moreover, customer knowledge is not systematically updated nor analysed. Management of customer knowledge is based on the CRM system. As implications of the study, it is suggested for the case company to define customer knowledge processing in order to support maintenance business process.

Jisc: Building a Cohesive Repository Shared Services Infrastructure for the UK

Panel at Open Repositories 2014, Helsinki, Finland, June 9-13, 2014

Service offering classification for logistics services

This thesis studies the development of service offering model that creates added-value for customers in the field of logistics services. The study focusses on offering classification and structures of model. The purpose of model is to provide value-added solutions for customers and enable superior service experience. The aim of thesis is to define what customers expect from logistics solution provider and what value customers appreciate so greatly that they could invest in value-added services. Value propositions, costs structures of offerings and appropriate pricing methods are studied. First, literature review of creating solution business model and customer value is conducted. Customer value is found out with customer interviews and qualitative empiric data is used. To exploit expertise knowledge of logistics, innovation workshop tool is utilized. Customers and experts are involved in the design process of model. As a result of thesis, three-level value-added service offering model is created based on empiric and theoretical data. Offerings with value propositions are proposed and the level of model reflects the deepness of customer-provider relationship and the amount of added value. Performance efficiency improvements and cost savings create the most added value for customers. Value-based pricing methods, such as performance-based models are suggested to apply. Results indicate the interest of benefitting networks and partnership in field of logistics services. Networks development is proposed to be investigated further.

Value of Information Logistics Integration in Digital Business Ecosystem

Digital business ecosystems (DBE) are becoming an increasingly popular concept for modelling and building distributed systems in heterogeneous, decentralized and open environments. Information- and communication technology (ICT) enabled business solutions have created an opportunity for automated business relations and transactions. The deployment of ICT in business-to-business (B2B) integration seeks to improve competitiveness by establishing real-time information and offering better information visibility to business ecosystem actors. The products, components and raw material flows in supply chains are traditionally studied in logistics research. In this study, we expand the research to cover the processes parallel to the service and information flows as information logistics integration. In this thesis, we show how better integration and automation of information flows enhance the speed of processes and, thus, provide cost savings and other benefits for organizations. Investments in DBE are intended to add value through business automation and are key decisions in building up information logistics integration. Business solutions that build on automation are important sources of value in networks that promote and support business relations and transactions. Value is created through improved productivity and effectiveness when new, more efficient collaboration methods are discovered and integrated into DBE. Organizations, business networks and collaborations, even with competitors, form DBE in which information logistics integration has a significant role as a value driver. However, traditional economic and computing theories do not focus on digital business ecosystems as a separate form of organization, and they do not provide conceptual frameworks that can be used to explore digital business ecosystems as value drivers—combined internal management and external coordination mechanisms for information logistics integration are not the current practice of a company’s strategic process. In this thesis, we have developed and tested a framework to explore the digital business ecosystems developed and a coordination model for digital business ecosystem integration; moreover, we have analysed the value of information logistics integration. The research is based on a case study and on mixed methods, in which we use the Delphi method and Internetbased tools for idea generation and development. We conducted many interviews with key experts, which we recoded, transcribed and coded to find success factors. Qualitative analyses were based on a Monte Carlo simulation, which sought cost savings, and Real Option Valuation, which sought an optimal investment program for the ecosystem level. This study provides valuable knowledge regarding information logistics integration by utilizing a suitable business process information model for collaboration. An information model is based on the business process scenarios and on detailed transactions for the mapping and automation of product, service and information flows. The research results illustrate the current cap of understanding information logistics integration in a digital business ecosystem. Based on success factors, we were able to illustrate how specific coordination mechanisms related to network management and orchestration could be designed. We also pointed out the potential of information logistics integration in value creation. With the help of global standardization experts, we utilized the design of the core information model for B2B integration. We built this quantitative analysis by using the Monte Carlo-based simulation model and the Real Option Value model. This research covers relevant new research disciplines, such as information logistics integration and digital business ecosystems, in which the current literature needs to be improved. This research was executed by high-level experts and managers responsible for global business network B2B integration. However, the research was dominated by one industry domain, and therefore a more comprehensive exploration should be undertaken to cover a larger population of business sectors. Based on this research, the new quantitative survey could provide new possibilities to examine information logistics integration in digital business ecosystems. The value activities indicate that further studies should continue, especially with regard to the collaboration issues on integration, focusing on a user-centric approach. We should better understand how real-time information supports customer value creation by imbedding the information into the lifetime value of products and services. The aim of this research was to build competitive advantage through B2B integration to support a real-time economy. For practitioners, this research created several tools and concepts to improve value activities, information logistics integration design and management and orchestration models. Based on the results, the companies were able to better understand the formulation of the digital business ecosystem and the importance of joint efforts in collaboration. However, the challenge of incorporating this new knowledge into strategic processes in a multi-stakeholder environment remains. This challenge has been noted, and new projects have been established in pursuit of a real-time economy.