Thomas Ulrik Lund, Digital Strategy Advisor and former Head of Digital Strategy at Novozymes, addresses how to prevent your MVP ending up in the digital graveyard without adding business value.
Right now, lots of companies are building minimum viable products (MVPs) based on use cases that were selected because they were low hanging fruits. Even though the MVP is successful, many are experiencing that it is hard taking the next step towards operationalising the solution and realising the benefits. Why is that? I see two main reasons:
A lack of strategic vision.
Use cases must be evaluated through the lens of a strategic vision and not only because they are easy picks. Many companies skip or invest too little effort in developing a vision for how the digital technologies will transform their business model. MVPs therefore risk lacking the strategic fit often required to get the final funding for implementation. Either because the use case in retrospect lacks the strategic and transformative element, or even worse, because the strategic vision has never been built and the use case is left to its own stand-alone business case that may not be strong enough isolated from a strategic perspective.
An example of this was in a manufacturing company that had picked Preventive Maintenance as a use case. The MVP showed great results in terms of predicting maintenance requirements and reducing downtime, but the operational investments needed in sensors and analytical competencies, were too high to justify the case. A broader strategic vision for digital transformation of the manufacturing process was missing. The use case was therefore not seen as a strategic steppingstone but rather as an isolated business case.
MVPs are being developed in incubators that are too far away from the functions where they eventually must be implemented.
Incubators are great for fostering ideas, thinking outside-the-box and experimenting with use cases, but too often the incubator forgets to consider what needs to be true for a solution to be adopted by the business function that it impacts. Integration with legacy IT systems and compliance with security policies are also often overlooked due to a lack of coordination with IT.
I have seen this happen with a new digital service developed by an incubator in the financial industry. The MVP prototype got great response when tested with customers. But while the incubator saw the service as an integrated element in the customer platform, the platform architect had not been involved upfront, resulting in an architectural conflict in the product design that eventually hindered the implementation.
In conclusion, to avoid the risk of being stuck with a bunch of successful MVPs but no real benefits, consider if you have spent enough effort in building a vision for your digital transformation, and a framework for picking use cases that applies both a business case and a strategic dimension to the evaluation.
Try also to balance the positive effects of having a digital incubator detached from the core business with the need for maintaining close ties with the business functions where the benefit realisation eventually will need to take place.
Good luck with your digital transformation journey!