1 / 38

Alternative Innovation Technology in Business Conference 07

Alternative Innovation Technology in Business Conference 07. Focus on ‘Non Product/Service’ Innovation Stories are drawn from Horizon Technology Group Plc Initially COO, then CEO, now non-exec director Involvement spans 18 years Supply Chain and Business Model Innovation NitroSell Ltd

Download Presentation

Alternative Innovation Technology in Business Conference 07

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Alternative InnovationTechnology in Business Conference 07

  2. Focus on ‘Non Product/Service’ Innovation Stories are drawn from Horizon Technology Group Plc Initially COO, then CEO, now non-exec director Involvement spans 18 years Supply Chain and Business Model Innovation NitroSell Ltd Initially customer, then investor, then non-exec director, now CEO Involvement spans 5+ years Architecture and Pricing Model Innovation Given time available, stories are all ‘condensed’ ! Innovation

  3. Lessons from Horizon Story 1 – The Early Days – Supply Chain Innovation Innovation

  4. Taking Market share is VERY tough Strong incumbent is always difficult to dislodge. Taking market share bit-by-bit is too slow. Look for innovative ways around this dilemma. The search for this leverage was a major innovation driver for Horizon. R&D is not just about products For Horizon, it should be about opening new businesses and adding new service lines. The Horizon Story

  5. Dominated the Macintosh market in Ireland. Began looking for growth opportunities; PC market & Unix market Challenge was to Find a new market niche, or Redefine an existing one. Next Step

  6. Supply Chain Basics

  7. For major brands, distribution should be viewed as an outsourcing relationship. A distributor’s REAL customer is its supplier, NOT the resellers is sells to. The supplier has greater influence on your revenues. Margins are just the way the manufacturer tells you what resources he wants you to invest. You ‘should’ be the exclusive partner. If not on offer, you must be confident of achieving preferred or dominant partner status. This set of assumptions is the ‘outsource’ model. The Lesson

  8. Horizon Supply Chain Innovation

  9. Was it successful Once we adopted this aproach, we won our first major contract with Compaq. HP, IBM, Cisco, and Apple followed. Outcome

  10. What lessons can be generalised from this story. Always invest something in R&D Sometimes R&D is about opportunities for whole new businesses. Sometimes it is about adding revenue to an existing business. Sometimes it is just learning about new markets. It pays to realy understand your supply chain and the supply chain of your competitors. Is there any opportunity or transition you can exploit. Can you disrupt it. Make sure this knowledge informs your strategy and structure. If there is a mismatch, then change. Generalising

  11. Lessons from Horizon Story 1 – The Early Days – Supply Chain Innovation Story 2 – Growing Clarity – Aligning strategy/structure Innovation

  12. Review led us to several difficult conclusions. The ‘Outsource’ model does not work for small suppliers Over about 18 months, we terminated agreements with all by 4-5 of the 20+ suppliers. Do not do anything not priced into the margin We wound down and then closed all product support and repair functions. The model does not work well for small resellers When we absorbed Gericmar into Clarity, the combined business had around 400 resellers with credit accounts. In stages, we wrote to 200 of them, closing their credit accounts. The Gericmar Review

  13. Did the restructuring work ? At the end of the restructuring / integration; Revenues were up (despite terminating suppliers/customers) Costs were down significantly. Clarity became the largest partner for the majority of suppliers. Overall From a standing start, Clarity became the largest distributor of IT product in Ireland within 5 years, and remained either the #1 or #2 possition every year thereafter, till we sold the business in 2006. Outcome

  14. What learning can we generalise; The 80/20 rule exists EVERYWHERE. Use it. Stay focussed on markets consistent with strategy. If drawn into others to pay bills, acknowledge it is just opportunistic. Do NOT change your strategy to justify your decision. Innovative models do NOT eliminate the need to compete deal by deal, But they do introduce route to step growth. Generalising

  15. Lessons from Horizon Story 1 – The Early Days – Supply Chain Innovation Story 2 – Growing Clarity – Aligning strategy/structure Story 3 – Riding the Sun-rise – Leveraging partnerships Story 3

  16. Advanced Model

  17. This model was extremely successful for Sun (and Horizon) in Ireland. Eventually convinced Sun, to give us a UK ‘Channel Development Partner’ contract. Almost immediately, we became largest CDP in the UK. Leveraged this relationship and our ‘outsourcing’ culture, to approach other suppliers. Advanced Model

  18. Have these innovative channel strategies been successful; Horizon is now the #1 supplier in UK/Irl for; Sun Microsystems EMC Nortel Oracle Juniper Tandberg F5 Horizon was IBM’s fastest growing partner ever in UK. Oracle dismissed their other distributors in the UK, when they appointed Horizon in 2007. Does it work ?

  19. What learning can we generalise from this. The way you present yourself to the market, can be incredibly powerful. It was never contractual, is was cultural. ‘outsource’ model Vs ‘conventional’ distribution ‘outsource’ model simply allowed us to differentiate ourselves. Follow your thought processes though to their logical conclusion. Don’t stop too soon. You can grow in the face of a strong incumbent, by taking all the growth in the market. By getting markets ‘allocated’ to you by manufacturers Generalising

  20. Introduction The NitroSell Stories

  21. Lessons from NitroSell Story 1 – A new architecture The NitroSell Stories

  22. CD/DVD/Tape Backup System MS Office 16 Port Switch x 2 Network Server Stock Manager IP (Digital )SecurityCamera) Printer (Networked) Main RMS database IP (Digital )SecurityCamera) Navision or Mid 20th Century Platforms Late 20th Century Platforms MS Office Accounts PC iSaaS SecurityCAM database Wireless Stocktake IP (Digital )SecurityCamera) Netscreen (customer facing) POS POS S+S Offline RMS database Offline RMS database UPS UPS Architectural Innovation SaaS Environment Web Store Content Mgmt Payment Gateway Marketplaces Online Malls Shipping Order management eMail Marketing Search Engine Social Networking Gift Registries Product Reviews Discount Schemes Software as a Product Environment

  23. Don’t get tunnel vision on new technology. You can create valuable niches by providing solutions which leverage existing IT investment. Generalising

  24. Lessons from NitroSell Story 1 – A new architecture Story 2 - Innovative Pricing Models Pricing Innovation

  25. Pricing Innovation

  26. Pricing Innovation • Provision of an ongoing service, requires an ongoing charge.

  27. Pricing Innovation • Usage Based Revenue Models • Greatly simplified Pricing • Aligned with customer benefit.

  28. Pricing Innovation • Look for indirect ways to extract value for you, at no cost to your customer.

  29. Pricing Innovation

  30. Pricing Innovation

  31. What can we generalise from this; Models are NOT mutually exclusive NitroSell currently uses or has plans to use 5 of these models. Model mix may change over time NitroSell likely to discontinue ILF at some point. Models can facilitate win-win outcomes Charges not contested because they are; Based on results, or Based on clear, visible, measurable customer benefits. Models put pressure on up front funding Lower ILF results in greater up front cash drain. Models require sophisticated billing systems NitroSell spend around 1/3 of development on this issue. Generalising

  32. Lessons from NitroSell Story 1 – A new architecture Story 2 - Innovative Pricing Models Story 3 – A portal to better business The NitroSell Story

  33. NitroSell Supply Chain

  34. Finance Automation of recurring billing (annual/quarterly/monthly), Manage complex pricing structures, Automatic Credit Control(online history, invoices, statements), Tracking all commissions due to distributor/reseller Support Access to documentation and training materials, Provision of support(knowledge base, support ticketing, etc) Implementation support materials Operations Provide Client ability to configure their stores content/features Reporting on store performance over time. Portal Features

  35. Allowing Resellers to leverage the Portal Creating their own pricing models, Using Implementation tools, Leveraging the support infrastructure. Get performance reporting on all their retailers In 2008, we have more planned. Undertake their recurring billing for them. Provide credit management tools. Innovations

  36. What can we generalise from this Bringing a SaaS solution to the market, requires a Portal type system. Using a reseller channel to sell your SaaS solution significantly increases Portal complexity. Once in place, Portal technology makes your solutions VERY scalable. SaaS Prerequisites

  37. Explore innovation opportunities in ALL areas Explore the consequence of an innovative model, before you ‘jump’, An innovation in your culture and attitudes, can be MORE powerful that a new product or service. Keep reviewing what you have done. How can it grow and develop even more. Summary

  38. If you keep doing what you’ve always done,you’ll keep getting what you’ve always got. Thank You ! Innovation

More Related