4.3

Concept Development

Concept development refers to the process of planning and defining new solutions or services for the business. Emerging business needs, such as digitalization, may justify and trigger new technologies based on concept development.

Concept development, in fact, triggers the entire Sourcing function by introducing various alternatives for implementation and utilization. Concept development is discussed in more detail in Chapter 2, Enterprise Development.

Concept Development (as in Enterprise Development)

The aim of Concept Development is to examine and re-think business operations and ways of working; and in parallel to scan the technical solutions supporting them in an easy-to-understand way.

Concept Development may be triggered by new business needs or by new solutions enabled by IT. Concepts define the best fit-for-purpose way to reach the target.

However, concepts are not easy to define and their impact and interdependencies can be contrasting. Concept Development always takes into consideration the costs and organizational impact of different solutions. Neglected or inadequate Concept Development often results in partial or insufficient optimization of sourcing, projects and services.

Globally digitalized environment requires evermore accelerated development of businesses, products, and services. IT solutions can either become a bottleneck or enable change. To enable change Concept Development is based on two different approaches with related outcomes and objectives:

  1. How can we streamline our business operations using common harmonized services across different business areas/functions? How can we improve work efficiency and the throughput time of our processes?
  2. Can we innovate new business models, products and services that create new revenue?

In most cases the key to Concept Development is the digitalization of processes and services. Business and IT should have a joint master plan covering gap analysis, strategic initiatives and allocated resources for digitalization over the entire strategic planning timeframe of the company.

 

Figure 2.5.1 Concept Development process with increasing depth of commitment

The process of developing concepts is crucial as it efficiently translates initial business needs (or issues) into accurate concepts. The concepts in turn serve as the optimal starting point for new development initiatives. Involving a variety of stakeholders at an early stage and working together according to agile and lean principles is a good starting point for new ideas and eventually creating new value for business. Deepening the commitment level, i.e. spending more time and getting more engaged people at each phase, supports the fail fast – learn fast strategy.

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