Engineering Delightful Experiences A Frost & Sullivan White Paper frost.com Introduction ................................................................................................................................... 3 Market Trends ............................................................................................................................... 4 Multiple Facets of a Product Translate into Tight Integration Needs ...................................... 4 The Quest to Achieve an Ideal Work-Life Balance ................................................................... 5 “ITfication” of Some Industries .................................................................................................. 5 Achieving Competitive Differentiation ....................................................................................... 5 Ability to Provide Acceleration ................................................................................................... 7 Ability to Create Value ................................................................................................................ 7 Enabling Adoption of Latest Technology ................................................................................... 9 HCL ERS ........................................................................................................................................ 10 Conclusions .................................................................................................................................... 11 About the Author ......................................................................................................................... 12 contents Engineering Delightful Experiences INTRODUCTION In their book1, The Experience Economy, B. Joseph Pine II and James H. Gilmore eloquently articulate the progression of economic value, from the early days of agrarian societies to the dawn of the industrial economy and its subsequent transformation into the service economy. The authors make a convincing point that we are now embarking on yet another evolution, namely the advent of the experience economy, in which the consumer expects not merely goods or services, but experiences. Pine and Gilmore argue that the successful companies in this new era will wrap experiences around their products and services in order to sell them better. However, in order to obtain the full benefit of staging experiences, businesses must purposely design engaging experiences that are capable of commanding a premium, as depicted in the figure below. One of the advantages of an experience-based marketing strategy is that it enables a company to manufacture a viral effect. Figure 1 – The Evolution toward the Experience Economy d e t a ti Stage N n O re Experiences I e SIT Diff O Deliver P Services E V I T I Make T d E e Goods P at M ti O n e C r Extract e diff Commodities n U Market Premium PRICING Source: Frost & Sullivan, adapted from an HBR article The iPhone is, of course, the iconic example of the newest stage in the evolution of economic value. People came to love the iPhone not just for its features, but for the entire delightful experience of using it – the way it looks and feels, the device’s usability and user interfaces, how they acquire and use apps, and the list goes on. A key component in the pursuit of a delightful experience is customer feedback. Earlier on, engineering was a hierarchical, top-driven approach with pre-planned product development schedules devised by the companies’ leadership. These engineering leaders were quite apart from the customers, and as a result, more focused on the need of the hour, which was the technology aspect of products. As a result, customer feedback had a longer cycle to be incorporated into an offering, as experience was secondary to capabilities or technologies in the product. However, today the markets have swung the opposite way, since customers care less and less about the technology per se, and have higher expectations about having a good experience. This experience, driven by 1 “The Experience Economy: Work Is Theater & Every Business a Stag,” by B. Joseph Pine II and James H. Gilmore, Harvard Business Review Press, © 1999 3 frost.com a customer-centric engineering process, has brought the engineering leadership much closer to the customers. Feedback cycles are now much shorter and multiple channels of feedback have opened up with social media coming into place. Engineering superior customer experience is the biggest competitive advantage companies are trying to create for themselves today. In this white paper, we will examine current market trends in the global engineering space, including the multiple facets of a product and the required tight integration to bring that product into fruition, the work-life balance dynamic, and the “ITfication” of some industries as they embrace IT models. We will then examine how competitive differentiation can be achieved in engineering great products, via delivering a faster time to market, creating value and leveraging the latest technological advancements. Finally, we introduce HCL’s Engineering and R&D Services (ERS) business, and why we believe it is uniquely positioned to capture mindshare and be a trusted and reliable partner in engineering delightful experiences. MARKET TRENDS Multiple Facets of a Product Translate into Tight Integration Needs Creating a product that delivers a great end-to-end user experience requires a much more integrated approach to engineering, one in which information technology is embedded in a product ecosystem from the initial design stage. Take the automobile. Increasingly, a buyer’s choice of car is based on the software on board and its ability to manage the overall driver and passenger experience through multiple systems – entertainment and communications, remote diagnostics, driver and passenger safety. This will become increasingly true as traditional products become more like services. For instance, an intelligent car will know if its fan belt is likely to break in the next 50 miles. Using its 4G or LTE communication chip, it will check the inventory at the nearest repair center, tell you that they have the part, book an appointment for you, and order a replacement part to replenish the repair center’s inventory. In fact, an automobile is no longer simply an automobile; it’s an automobile with an overlay of telecommunications, consumer electronics, and other elements of the driver and passenger experience. This convergence of industries in a single product is leading many companies to ask what business they’re in. It may not be the company’s traditional business or any of the traditional industries. Companies in today’s automotive industry instead will need to look at what value they can create for customers and what partner ecosystem they must develop to make that happen. Experience-driven engineering will become essential in the future, impacting both the car manufacturers and the CTOs of electronics and semiconductor manufacturers. As the quantity of electronic components inside of a car continues to rise, the need for a scalable solution to connect the various isolated networks (engine control unit, controller area networks, multimedia systems, and sensors) within the vehicle has grown as well. This is where In-Vehicle Ethernet can play a key role, as it is a more standardized and less-expensive alternative compared to other network technologies. In-Vehicle Ethernet can potentially develop into a standardized automotive infrastructure component and will spur the advent of a new wave of connected vehicle applications. Automobiles are just one of numerous products and services in which user experience is becoming paramount. Smart lighting in commercial airliners is reducing the jet lag of long-haul passengers. Sensors in homes and assisted living facilities are improving the quality of life for elderly residents by monitoring their well-being. Mobile telephones, with a penetration in emerging markets that is many times higher than that of credit or bank debit cards, are serving as payment portals that bring financial services to traditionally underserved populations. 4 Engineering Delightful Experiences Products are lending themselves to service-based models so that there is a renewable relationship and companies can make recurring revenue. The Quest to Achieve an Ideal Work-Life Balance Employees are increasingly aware of the need to increase their productivity while also striking a proper balance between their work and personal lives. Therefore, there is a growing demand for solutions that allow these employees to be productive from anywhere and enable them to use some “downtime” effectively to answer e-mails, send scheduling requests, set up and participate in meetings, and work collaboratively with other members of the team. A number of pilot projects undertaken by enterprises in North America and Europe have indicated that when teams of interdependent workers (such as customer service reps) are allowed to create their own plans for how and when to get their work done, productivity improves considerably. There is another dynamic that is worth mentioning here, namely how “Gen Y-ers” are treating work-life balance more as a work-life blend. The shift also stems from the observation that Gen X is more tech-savvy, while Gen Y is tech-dependent, and as such, can flip back and forth between its personal and work lives quite frequently. In order to achieve such a work-life blend lifestyle for their employees, enterprises need to be able to supply access to their corporate data from any device, anytime, anywhere. Solutions such as telepresence and unified communications (UC) are creating tremendous value by creating travel savings, and enabling faster decision-making, stronger customer relationships, cost control and improved productivity. “ITfication” of Some Industries Industrial revolution improvements are coming from innovations and efficiencies being delivered via IT models. The IT function is to aggressively adopt a product development – and thus business-crucial – role, so it will have to think beyond software applications and become more focused on consumers. Collaboration between CTOs and CIOs will have to significantly increase. And for both the CIO and the CTO, technology will be only a means to an end; that is, an experience that will delight the users of their products. ACHIEVING COMPETITIVE DIFFERENTIATION In order to offer a delightful QoE in their products and to differentiate themselves from the competition, companies need to: • have product/service velocity; • make a compelling value proposition; and • provide innovation via the latest technologies. In other words, there is a need for a more integrated approach to engineering, i.e., one in which IT models/ techniques are leveraged right from the start (i.e., initial design stage). But some leading brands might need to develop a relationship with a trusted partner that can provide that essential component. And what characteristics should the portfolio of such a partner have? 5 frost.com In terms of an accelerated go-to-market strategy, it is necessary to make a distinction between “incremental” or “affordable” innovation, which delivers a few extra features to an already existing product, often hiding in plain sight, but yet with the potential to pave a product’s way to mass adoption; and “breakthrough” or “quantum leap” innovation, which have the potential to create new product categories and change people’s lives, ushering end users into a new world of possibilities. A successful company such as Apple can delight its customers in providing breakthrough innovation via products such as the iPhone while also pragmatically delivering incremental innovation, adding value and features to its product line. While those extra functions might not seem like much taken in isolation, over time, as users take a step back and look at the totality of these additional features, the subtle flair of Apple’s methodical innovation approach becomes evident. The fact is that “game-changing” products such as the iPhone simply do not come around every year, not even every three years; if that happened, these breakthrough products would not be as ground-breaking and revolutionary after their introduction. Therefore, it is important to seek out both types of innovation: those coming from building up incremental features and functions, and those that can create a paradigm shift within an industry, revolutionizing it and creating a new delightful end-user experience. In order to achieve this goal, it is necessary to manage innovation both “upstream” and “downstream” a product line. For instance, the figure below depicts the various solution types for video conferencing, ranging from simple (mobile) to complex (immersive telepresence). Incremental innovation can be achieved for each product category, but it was breakthrough innovation that delivered a new product category that delivers the most compelling end-user experience (immersive telepresence). Figure 2 – Gamut of Video Conferencing Solutions Video Conferencing Solutions Immersive Telepresence ) e c Life-size images, spatial audio, every n e participants has a seat at the table ri e Multipurpose p x E Rooms can be use with or of without telepresence y (leveraging MCUs) alit Personal u Q Single-screen executive E ( tdeelsekptroeps etnecleep urensitesn,ce o Immersive Q Mobile Telepresence: er Supported endpoints: Providing the s Highest QoE U (cid:127) Smartphone - (cid:127) Tablet d n (cid:127) Laptop E Product Features Source: Frost & Sullivan 6 Engineering Delightful Experiences Ability to Provide Acceleration The early adopters of a new technology in a given industry can typically command a coveted premium, while defining and creating a new market segment. Competitive pressures have shortened product lifecycle and, as a result, created more need to have agility in new product introductions. HCL’s ERS (Engineering and R&D Services) division can bring three key pillars toward addressing this goal: accelerated development, plug-and-play solutions, and global delivery. ERS has mature and proven competencies in delivering complex engineering products across nine industries. Figure 3 – ERS Global Delivery Model Source: HCL ERS Accelerated delivery can be achieved by focusing on four different areas: concept to manufacture, transition and resourcing, quality and compliance, and engineering delivery. Each of these areas can accelerate development for different aspects of the overall project delivery, be them for ramp-up time, product launch, product quality or end-customer satisfaction. Plug-and-play solutions can also dramatically shorten the time to market, reducing development time by as much as 30%. In its engagements, the ERS team relies upon 20-plus ready-made solutions across segments such as Mobility, Cloud, M2M, Smart Devices, Analytics, NUI, Online, and Video, among others. These plug- and-play solutions are categorized into four main groups: Product Intelligence (PI), App Test Factory (ATF), Performance Engineering (PE), and Extendable framework for device testing (eDAT). Lastly, ERS can deliver across five continents, supporting clients with a “follow-the-sun” capability in a scalable, culturally diverse fashion that takes advantage of factors such as proximity and familiarity with local regulations. The local expertise across several locations around the world can be leveraged to engineer the best solution. 7 frost.com An example of ERS’ acceleration capabilities is a project that involved the end-to-end development of a monocular handheld infrared camera for law enforcement. The ERS team: • Accelerated the product release in nine months; • Achieved a 25% reduction in the time to market; • Attained the highest sales volume and fastest ROI; and • Sold more than 40% of its projections. Ability to Create Value Another tenet in achieving a strong competitive differentiation is making a compelling value proposition, which can be attained by delivering an incredible price-to-benefit ratio. Mature products have a competitive feature-to- margin ratio, while emerging markets have lower price points. In addition, innovation has a risk everyone wants to mitigate. ERS tackles all of these issues via a three-pronged value strategy, consisting of: • Value-Based Quality: A catalog-based testing that lowers the cost of quality and concomitantly raises the product quality. • Value Engineering: I ndustry-leading test, value engineering and product lifecycle management expertise, VAVE and service monetization. T his results in a roughly 30% impact on TCO and 25% impact on customer satisfaction. • Value-Based Sustenance: ERS relies upon 30-plus years of engineering acumen with best-in-class mature processes delivering superior customer satisfaction. This results in a 25% impact on engineering and maintenance costs. ERS’ value creation pedigree includes a 15-year mature engagement with one of the world’s largest telecom OEM companies, and consisting of development, testing and sustenance of an industry-leading switching portfolio. This infrastructure is deployed by over 35,000 customers globally with an overall business impact of more than $4 billion and spanning 60 patents. One of the key improvements was the 35% improvement in release cycles. 8 Engineering Delightful Experiences Figure 4 – ERS’ Value Engineering Info Acquisition, Analysis, Ideation - Phase 1 Validation, Finalization - Phase 11 (cid:127) Gather key product data Implementation - Phase 111 Pre-Workshop (cid:127) Perform Analysis to identify areas for cost out (1~3 Weeks) (cid:127) Brainstorm alternatives -Designs, Materials -Processes, Tolerances -Sourcing, Standardization (cid:127) Pmscraoanldeuu fpcartco truderuleicnatgsio efnodr t ofu ll RELEASE UNDERSTAND IDEATE (1~3 days W@ orksh(cid:127)o pDocument all ideas (cid:127)(cid:127) FRpireno-acdl eutrectsti ftiaicnpagpt ircooonvmsa lposl re ted Onsite) (cid:127)(cid:127) RBuanildki ncog nosfe Indseuass completed (cid:127) Create Ideas short-list n PRIORITIZE for validation atio TAEPSPTRIONVGA &L oHf CExLc Ceellenntecre CuTsetaommer t n em (cid:127) High level analysis e -Technical Justification lp -Financial Justification through m cost modeling I -Implementability (cid:127) Create working PROTOTYPE VALIDATE (cid:127) Risk assessment dpreositgont yapned wBiOthM new eks) (cid:127) Compute ROI We n (cid:127) Redesign based on REDESIGN BUSPINREEPSAS RCEASE (6 to 10 Evaluati(cid:127)o Define project objectives approved project plan (cid:127) Present project ideas (cid:127) Summarize financials (cid:127) Risk mitigation plan (cid:127) Project timeline Customer Approval Source: HCL ERS Enabling Adoption of Latest Technology The convergence of industries is catalyst to both new technology challenges and opportunities. One such instance is the advent of the SMAC (Social, Mobile, Analytics, Cloud) stack, which is becoming increasingly more pervasive and becoming a “game-changer” for all businesses across various industries. ERS qualifies the latest technology in three main categories: • Disruptive Technology: Technologies such as NUI (Natural User Interface), NFC (Near-Field Communication) and SDN (Software-Defined Networking), which are proving to be potential game- changers and for which ERS can leverage a portfolio of over 1,250 patents across multiple industries. • Adjacent Technology: Group of related industry technologies that impact the convergence trend and capabilities for technologies ranging from aerospace to software/online. • Next-Generation Technology: This denotes technologies that can be used to created next-gen experiences, resulting in up to 25% improvement of usability and adoption. This requires an effort involving the set up of advanced research units, labs and capability development. 9 frost.com Figure 5 – ERS’ Next-Generation Technology Source: HCL ERS As an example of ERS’ help in stimulating the adoption of newer technologies, the unit has developed an Android-based, in-flight handset for airplanes from design to manufacturing. This was a complete end-to- end industrial design project, including component and material selection, Android v. 3.2 customization, and integration with TI-based hardware. HCL ERS HCL’s Engineering and R&D Services (ERS) can be that trusted partner, advise its clients on key issues, and help them deliver a delightful experience to their end customers. In order to achieve this, ERS can leverage the following intangibles: • Global footprint: ERS has at its disposal a total of 18,500 engineers across four continents that serve a total of 300-plus active engineering engagements at 75 active offshore development centers with dedicated labs and 22 shared labs. • Wide array of experiences engineered: ERS maintains a diversified portfolio capable of engineering delightful experiences across a comprehensive gamut of verticals, including aerospace, automotive, consumer electronics, industrial manufacturing, ISV and online, medical devices, semiconductor, servers and storage, and telecom. • Customer pedigree: ERS has an enviable blue-chip customer list, having worked with seven of the top 10 A&D companies, most of the major automotive OEMs across North America and Europe, seven of the top 10 medical device companies, two major mobile and digital lifestyle OEMs, top three white goods manufacturers, four major platform vendors, two networks operators, three of the top seven Fortune 500 CSPs, five out of the top seven OEMs, top four handset manufacturers, top three VAS solution providers, six out of the top 10 Semi OEMs, and seven of the top 10 ISVs. 10