Who moved the value?

Value is what the customer is willing to pay for. What may be a treasure in one generation of product may be commoditized in the next generation or era. Here, “era” in the technology space does not constitute any more than two years. In every stage, as value moves along, it is imperative to track its movement for a successful delivery.

Tracking the value migration is a pesky affair. This paper focuses on the various stages of product’s life time and how Product Engineering Service (PES) providers and their customers can systematically map the market status of the product they have envisioned together and co-create for the successful realization. This article is concerned with standard based products. The standards could be open or proprietary, but for this paper, we would confine to open standards.

Four phases
Statistician George Box said, “All models are wrong. But some are useful.” With that disclaimer in place, let me offer a model which is useful to us. There are four distinct phases during the life time of a product:

1. Evolution of the standard
In this phase, while every effort is being made to freeze the specifications by the standards body, it would usually take more time than we can afford. So, as the standards come up for discussion, parallel development efforts would have to be afoot since development after the standard becomes official will ruin sales. Hence, some calculated risks would have to be taken, and makers should develop a working prototype of the standard. In this phase, most of the value resides in the standard itself and the mastery over it to make it work. Usually, the keen users of this would be the “innovators” and portion of “early adopters” of technologies. Here, the functionality and first-to-show-the-world working prototype is likely to be a winner. In some cases, the winner implementation has to be radically modified to get it to next stage.

2. Product design
Once the standard is likely to take a foothold, the value starts its migration to the next area. That is, design and implementation. In this phase, many firms would have access to the standard. Hence the ability to interpret the specification and design it in the most effective way would determine the value of the offering.

3. Product development
Once products enter the market based on that continually evolving standard, value migration starts its seamless journey to the next area. In this phase, what matters is that the product can be delivered at a low cost (need not be the lowest) quickly. Value shifts to time-toreach the market. It may be a me-too race; nonetheless being ahead of the pack makes the difference.

4. Product sustenance, enhancement and graceful migration to next generation
In this phase, rarely a firm reaches the leadership position if it missed Phase 1 or 2. But, it has some critical “strategic” components that can propel it to the leadership position for the next generation of products. Here, the value resides in meeting SLA (Service Level Agreements) norms, key backward compatibility components that would serve as bridge to move to the next generation standard.

See Figure 1 for the Technology Adaption Life Cycle (TALC) Curve and the Phase mapping. The phases of TALC and the four stages described are marginally overlapping and so are the customers.


Figure 1: Technology adoption curve.

Aligning delivery and model
Wipro’s Product Engineering Services (PES) we handles numerous projects. So, it is imperative to ask, “Which are the most successful product deliveries and does this model has any significance or correlation?” Yes, indeed it does. And the following are the common items:

1. Critical issues to the customer can be unearthed by various methodologies.



Table 1: CSF and source of revenue.


2. When priority in execution is very tightly aligned to the value migration curve, the CSAT survey during the end of the project is near the top.

3. Client clearly sees a business benefit – that is clarity in the fixed costs and visibility in the variable costs.

Overall, TIME moves the value. Constant realignment with a product’s phase is one good recipe for successful delivery.


Case Study: Audio Player Project
This is taken as the case study for following reasons:
1. this project went through all four stages which described;
2. business model changes were done three times;
3. all stages witnessed one of the highest Customer Satisfaction (CSAT) Score over a period of three years and six months; and,
4. staffing is based on Critical Success Factors for the particular phase of project; therefore, staffing was optimal without having any delivery dangers.

Stage-1: The company started discussing with the customer and showed a basic working prototype. However, the customer was targeting an ultra-low cost player. They had a good engineering budget to reduce per device cost. Therefore, a low-cost proprietary DSP core was chosen. It doesn't have the usual tools that normally come when standard DSP platforms are bought. As such, it entailed a lot of specific one time use tools for development. Also, all of the development was in assembly language since the compiler support is yet to come by. The product entered the market early enough to be success. CSAT was excellent.

Stage-2: With the market feedback pouring in, there were specific set of features to be implemented aside from planning and scaling for the next generation add-ons for the product. The focus went from functionality to performance. It entailed a lot of benchmarking efforts to see if the design was effectively done on certain vectors. During this phase, the project witnessed a change in business model as well, and CSAT was very good.

Stage-3: The major focus during this phase went to optimization of implementation, such that it clearly focused on a particular market segment. Some proprietary hooks were added to address certain unique needs of geography. During this phase too, there was a business model change. The CSAT was excellent.

Stage-4: During this twilight phase of the project, the company handled minor enhancements, bridge to new generation devices and met the SLA norms. There were few requests that were predicted based on the data gathered so far and a clear provision for unforeseen inflows. This kind of prediction for minimum load and planning for variable load resulted on different kind of flexible business model that suited both sides. CSAT for this phase was excellent.


Author Information
Madhu Parthasarathy is the General Manager, DSP & Multimedia Group, of the Product Engineering Services of Wipro Technologies. He can be reached at madhu.parthasarathy@wipro.com.