Value proposition for IIoT use in equipment rental companies in CanadaPatrick Antwi-BoasiakoA project submitted to the Faculty of Graduate and Postdoctoral Affairs in partial fulfillment of the requirements for the degree ofMaster of EngineeringInTechnology Innovation ManagementCarleton UniversityOttawa, Ontario.Copyright © 2018 Patrick Antwi-BoasiakoABSTRACTTo achieve competitive advantages, equipment rental companies have started extending their portfolio of services to adopt Industrial Internet of Things (IIoT). SMatEquip, the project’s client, needs to know the priorities it should set during customer collaboration using a predictive analytics software to increase the likelihood of value capturing by Cooper Equipment Rentals. Cooper Equipment Rentals, the customer, faces a challenge of not getting access to real-time equipment health (data) whilst units are on rent.
The aim of this paper is to provide a value proposition for equipment rental companies in Canada by leveraging the use of IIoT. This project examined the literature on value proposition development, application of IIoT and interview with some experienced service engineers, key customers, supervisors and managers of equipment rental companies to help identify factors to prioritize when creating value for a rental customer. We conducted a field test and analysed data collected for a week in the context of customer feature selection, test cases execution prioritization and user interface design selection. The author of this project report recommends Cooper Equipment Rentals to adopt and focus on the remote access capability value in their operation to increase the likelihood of value capturing and to stay competitive. The project benefits the client and identifies important values that a data analytic start-up can use when collaborating with customers to increase their likelihood of survival.ContentsABSTRACT 2ACKNOWLEDGEMENT 51 INTRODUCTION 61.
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1 Objective 71.2 Deliverables 71.3 Relevance 71.48 Contribution 81.5 Overview of method and expected results 81.
6 Organization of the document 92 LITERATURE REVIEW 102.1 Value proposition development 11 2.1.1 Value and value propositions 11 2.1.2 Process to develop a value proposition 18 2.1.
3 Active customer collaboration in value creation 24 18.104.22.168 How to collaborate and benefits derived from co-development with customers 26 2.1.4 Value created by IIoT 282.
2 IIoT- based product and services 30 2.2.1 Benefits of smart connected “things” 30 2.2.2 Prospects of IoT application 322.3 Data Analytics Capability 34 2.3.1 Adoption of IoT in rental industry to generate industrial big data 34 2.
3.2 IIoT pedagogy based on equipment health and availability. 362.4 Lessons Learned 362.5 Summary 373 RESEARCH DESIGN AND METHODS 383.1 Overall Research Method 38 3.2 Research steps 393.3 Interview Questions 413.
5 Data Analysis 444 RESULTS 454.1 Interview Participants 454.2 Collaboration process with Cooper Equipment Rentals 48 4.2.1 Interview results analysis 514.
3 Values Cooper Equipment Rentals needs to focus to increase likelihood of value capturing 54 4.3.1 Equipments used for the IoT Proof of Concept 55 22.214.171.124 Proof of concept test results on three rental equipments 56 4.3.
1.3 Value proposition formulation 57 126.96.36.199 Lessons learned 654.4 Summary 665 DISCUSSIONS 685.1 Dominant values after the interview 685.
2 SMatEquip’s value proposition formulation for Cooper Equipment Rentals. 706 CONCLUSIONS, LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH ….726.1 Conclusions 726.2 Limitations 746.
3 Suggestions for future research 74REFERENCES 76Appendix 1: Interview Results 81List of TablesTable 1: Summary of streams drawn from the literature. 12Table 2: Definitions of value. 12Table 3 : Definitions of value proposition. 14Table 4: Structure of value proposition. 16Table 5: Three types of value proposition (Anderson et.al, 2006) 17Table 6: Shows how to collaborate with customers and the benefits associated with co-development (source: Kristensson et al., 2008).
28Table 7: Summary of key trends in technology (source: Ulrich, 2005). 30Table 8: Shows the drivers and benefits derived from smart connected things in organizations (Andal-Ancion et al. (2003, Fitzgerald et al. 2013). 32Table 9 : Research Method. 39Table 10 : List of questions asked.
42Table 11: Review of questions to the service engineers, key customers, supervisors and managers 46Table 12 : List of participants interviewed. 48Table 13: Tabular description of the collaboration process with Cooper Equipment Rentals to develop its product. 51Table 14 : Outline in order of priority of most important factors in value creation. 54Table 15 : Results from examining Cooper Equipment Rental Company. 55List of FiguresFigure 1: Customer Development Model (Bank, 2005). 22Figure 2: Hypotheses testing stages (Source: Blank, 2005). 23Figure 3: Concept testing stages (Source: Blank, 2005). 24Figure 4: Conceptual framework (Source: Blank, 2005).
26Figure 5: Value co?creation in a service logic?based view (source: Grönroos, 2011). 28Figure 6 : Shows low digitization in construction. (source: Mckinsey, 2015). 35Figure 7: Gartner hype cycle (Source: Gartner, 2017) 36Figure 8 : Estimated numbers of connected nodes based on different sectors are presented in Million 38Figure 9 : The four actions framework (Chan et al., 2005). 45Figure 10: Interview results from Supervisors.
53Figure 11: Interview results from Managers. 53Figure 12: Interview results from Service Engineers. 53Figure 13 : Interview results from Key Customers. 54Figure 14: Results of values prioritized across the four groups of participants. 55Figure 15: Three skid-steer equipments used for the proof of concept testing. 58Figure 16 : Customer discovery Framework to develop Cooper Equipment Rentals’ value proposition (source: Modified from Blank, 2005). 61Figure 17: Hypotheses testing stages (Source: Modified from Blank, 2005). 63Figure 18: Concept testing stages.
(Source: Modified from Blank, 2005). 64Figure 19: Remote access interconnection logic with other values and benefits derived at each stage. 66Figure 20: SMatEquip’s remote access capability function with a logical link to other values Cooper Equipment Rentals stands to derive. 73 ACKNOWLEDGEMENTMy profound gratitude goes to the Almighty God for his strength, protection, steadfast love and wisdom throughout the TIM program. My greatest gratitude goes to my supervisor and Director of Technology Innovation Management (TIM) Program, Dr.
Tony Bailetti, for his encouragement, guidance and patience throughout the entire supervision for my project. His prompt responds to my questions and queries played a major role in the successful completion of my project.My deepest appreciation goes the entire Faculty of the TIM program for their valuable feedback during the gate reviews. Their feedback helped me refine my work to deliver a quality project work. I say a big thank you Professors.Steve Kanellakos, City Manager of Ottawa, my mentor, I say thank you for your guidance and advice.
Finally, I would like to appreciate the prayers and moral support from my loving wife; Bernice Antwi-Boasiako and son, Jesse Nana Antwi-Boasiako throughout my period of study. Without you two, it would have been impossible to get through this journey successfully. 1 INTRODUCTION Urbanization requires construction of buildings, bridges and other infrastructure for cities and local communities. This phenomenon drives the need for equipment renting for construction of these edifices.
As the rental industry, experiences boom each year, so does the competitive demand and customer value expectations. There is a clear shift of power taking place in the equipment rentals (Brody et al, 2015) and the use of data analytics via Internet of Things to create value and offer an excellent customer experience is key (Hartikainen, 2017). Internet connected devices will grow to 26 billion in 2020 representing an almost 30-fold increase from 0.9 billion in 2009 (Gartner, 2014). For example, Amazon announced its Amazon dash button program that enables consumers to press a branded wirelessly connected, single function button mounted in the household to order household goods such as detergents and the items delivered to their doors via Amazon delivery channels (The Economist, 2015).
In Canada, despite the rapid growth of rental companies, very few utilize data analytics to gain more insights in real-time data to create more value and revenue (A.R.A, 2018). According to a report by the American Rental Association in February 2018, the Canadian equipment rental revenue will grow to US$6.125 billion by 2021. As such, more education on adoption needs to be done.Presently, there is no clear customer value proposition defined for heavy equipment rental segment.
Thus, the purpose of this study is to develop SMatEquip’s value proposition for an existing equipment rental company that operates Canada-wide to enhance their market share and to be competitive.1.1 ObjectiveDevelop SMatEquip’s value proposition for an existing equipment rental company that operates Canada-wide. 1.2 DeliverablesThis project has the following deliverables:1.
Description of a process used by a start-up to collaborate with a large customer to develop its product.2. SMatEquip’s value proposition to Cooper Equipment Rental Company. 3. Lessons learned from collaborating with a large customer to develop its product.1.3 RelevanceThis project is relevant to the new venture “SMatEquip” and its early customer, Cooper Equipment Rentals, a full-service construction equipment rental company that services contractors across Canada. Cooper Equipment Rental Company specializes in the rental of compact, aerial and heavy construction equipment while providing a wide range of supplies, along with unparalleled service and support.
SMatEquip is a Platform as a Service start-up that aims to use its skills and resources available to resolve the customer’s lack of access to real-time equipment data. This will positively improve its operation processes; improve revenue generation and competiveness for Cooper Equipment Rentals.1.4 ContributionThis project work makes three contributions.
First, the project identifies six specific and important values found in the equipment rental industry that drives a company to be competitive and achieve its business goals. Secondly, it makes people who aspire to start a data analytic start-up aware of the essence of an end-to-end customer collaboration to prioritize values and the need to create a new value demand for survival of the start-up.Thirdly, the project contributes a way to assess the likelihood that an organization will capture value through active collaboration.1.5 Overview of method and expected resultsThe methodology is divided into six sequential phases. Each of them having a specific purpose and outcome. The project first examines literature on value proposition development and the application of IIoT in equipment rental companies.
The next step drafted interview questions based on the literature reviewed and some informal interviews done with some selected experienced service engineers, key customers, supervisors and managers to help identify the values (factors) that can increase the likelihood of value capturing by equipment rental firms. The criteria for choosing these interviewees was that, they should be knowledgeable and have worked ten or more years in the rental industry. In phase three, I developed an evaluation and analysis based on collaboration with the experienced service engineers, supervisors, key customers and managers. The fourth phase involved installation, testing, and analysis of data from the IIoT devices to get feedback from customers and redesign to their needs.
Phase five focused on formulating “SMatEquip’s” value proposition for Cooper Equipment Rentals to develop a competitive edge in the equipment rental market. The final phase, elicits lessons learnt from the collaboration process with the customer to develop SMatEquip’s product. 1.6 Organization of the documentThe remainder of this document is organized into five chapters.
Chapter 2 provides the results of the literature streams used to produce the first deliverable. Chapter 3 describes the method used to produce the three deliverables. Chapters 4 and 5 discuss the results of the project. Chapter 6 provides the conclusions, limitations as well as recommendations for future research work.2 LITERATURE REVIEW Literature on value proposition development via the use of IIoT (Industrial Internet of Things) for equipment rental companies was examined to identify the types of value propositions and benefits derived from choosing the right value proposition type for the customer problem.
A list of the structure of value propositions was drawn from literature and a detailed process on how to develop a succinct value proposition was outlined. The outcome of this literature review was a well-defined value proposition process start-up companies could employ to meet their potential customer needs. Sections 2.1, 2.2 and 2.3 provide a literature review that comprises of three main streams of literature relevant to this project: value proposition development, IIoT based products and services, and data analytics capability. Table 1 illustrates that, the literature is organized into these three streams, and for each stream, it provides key highlights and references.
This section further shed light into the streams and offers definitions to keywords. It then gave a structure and a detailed description of processes involved in developing a value proposition for a start-up company to meet their customer needs in the same section. Section 2.4 provides the lessons learned from examining the literature.Stream Key highlights of the stream Citations to key sourcesValue propositiondevelopment • Value proposition creation and varied customer needs.• Active customer collaboration in value creation.• Value created by IIoTAaker (1996)Anderson et al. (2006)Blank (2005)Fitzgerald et al.
(2013)Grönroos (2011)Hartikainen (2017)Osterwalder et al. (2014)Payne and Frow (2014)Ulrich (2005)Vargo & Lusch (2004)IIoT- based product & services • Benefits of smart connected “things”• Prospects of IoT application.Balaji and Roy (2017)Gromov (2015)Horta et al. (2012)Lenka et al. (2017)Porter and Heppelmann (2014)Woodhead et al. (2018)Data analytics capability• Adoption of IoT in the rental industry for industrial big data.
• IIoT pedagogy based on equipment health and availability.Mourtzis et al. (2016)Provost and Fawcett (2013)West (2012)Yin et al (2014)Table 1: Summary of streams drawn from the literature.2.1 Value proposition developmentSection development of value proposition through customer collaboration and the components entailed in value proposition for emerging “Platform as a Service” start-ups. 2.1.1 Value and value propositionsValue Definitions Definition Reference1.
Value is defined as a judgment always uniquely and phenomenologically determined by the beneficiary. Vargo and Lusch 2008, p. 32. Value is what customers “get” (benefits) relative to what they must “give up” (costs or sacrifices). Zeithaml, 1988, p.2-223 Value of a product/service is commonly defined as the trade-off between the benefits and sacrifices (cost) as perceived by the customer. Ravald & Grönroos, 1996, p.407-419 4 Value refers to an interactive, relativistic preference and experience.
Holbrook, 2005, p.46Table 2: Definitions of value.The word “Value”, as fuzzy as it may sound, has been defined in so many ways by authors in the literature reviewed and are very much linked to the context in which it is used. See table 2 for the various definitions. The key highlight in table 2 was the aspect of value being centered on the experience and perceptions of customers. The summary review of the literature suggests that, value is a trade-off between the benefits received and the costs of getting the benefits, thus improving a function and or reducing the cost function. This definition is for this study.
Vargo and Lusch (2008), describe value as judgment always uniquely and phenomenologically determined by the beneficiary because the user determines the value of the product or service in use. Value is realized when a service is used (Vargo and Lusch, 2004). Consequently, an unsold product or service has no value unless it is procured by a customer (Gummesson, 1998). They further elaborated that, value is fundamentally derived and are not distinct. Meaning that, value is always co-created between providers and beneficiaries through the integration of resources and application of competences.
Vargo and Lusch (2004) introduced a new value perspective by coining the concept of value in use for the customer. An example is when automobile manufactures produce cars for their consumers and value is realized only when the customer makes use of their automobiles, in the context of his or her own life, that it has value. In this instance, manufacturers applying their knowledge and skills in the production and customers applying their knowledge and skills in the use of it in their lives. This then pave way to say that value is customer centric and the supplier’s ability to engage in active dialogue and interaction with the customer increases its potential to support the creation of value-in-use, i.e. to improve how the object of exchange is used (Grönroos, 2011).Value Proposition definitions Definition Reference1. Value proposition of a product/service is a statement of the functional, emotional and self-expressive benefits delivered by the brand that provide value to the target customer.
Aaker, 1996, p.12. Value proposition is one important concept of customer retention as such must solve customer problem, communicated clearly, simple and state both tangible and intangible benefits to be derived with its associated cost for each customer segment.Osterwalder et al., 2014, p. 1-23.
Value Proposition is defined as a crystallized offering to a defined customer segment for meeting the customer requirements that are built with a competitive insight and thus enable the core activities of the company in line with the business strategy. Hope and Player, 2012: p 142-147.4. Value proposition are reciprocal promises of value, operating to and from suppliers and customers seeking an equitable exchange. Pires, Dean, & Rehman, 2015, p. 926Table 3 : Definitions of value proposition.From table 3, we could say the key themes that run across the different literature were customer co-creation, value in use, problem solving and customer retention.
These themes will help a start-up know what to focus on most when development a value proposition for a customer. A well-defined value proposition can make a significant contribution in developing a business strategy and enable the service provider to compete in a chosen market segment (Anderson et al., 2006). The concept of value proposition was first cited in the work of Lanning and Michaels (1988) in which they defined value proposition as the benefits gained by the customers from the product with respect to the price they paid for the product. Though Lanning and Michaels (1988) work focuses on superior value delivery, in this approach, value benefits from the product are explained in the context of if the customer would pay for the product. Since then, value proposition has been addressed in various literature and has been described as a problem solver for customer needs (Osterwalder and Pigneur, 2010). Hope and Player (2012) defined in the table 3 that, value proposition as a crystallized offering to a defined customer segment for meeting the customer requirements that are built with a competitive insight and thus enable the core activities of the company in line with the business strategy. From the table 3, value proposition is addressed from many perspectives of value benefits promise to customers for a defined segment offering.
More so, since customers ultimately determine the value of offerings, a producer can only develop the value proposition for the concerned offering considering the competitors’ offering (Vargo and Lusch, 2004). From the service logic perspective, the customer is the value creator and the role of the service provider is restricted in making a value proposition (Grönroos, 2008). These restrictions for the service provider could be curbed by actively collaborating to understand customers, co-creating and communicating both tangible and intangible benefits in a clear manner. Based on the definition by Aaker (1996), which elaborates on the need for startups to deliver functional, emotional and self-expressive benefits to their target customer, we can say, the higher the value captured by customers, the more the likelihood of survival of the start-up.Structure of Value PropositionNo: Structure of Value Proposition Highlight Reference1 1. Identify your customer’s main problem.
Urgent, pains, cost, time, dissatisfaction. Osterwalder et al.,20142 2. Identify all the benefits your product offers and how you offer it to target customers. • Cost savings, timesaving, revenue increase, customer satisfaction. • Offered as a product, service, or hybrid means.
Ulrich and Brockbank,20053 3. Describe what makes these benefits valuable. Distinctiveness, high efficiency & productivity. Gromov,20154 Connect this value to your buyer’s problem. Makes work easier and simpler, offer information Heikka et al.
,20185 4. Differentiate yourself as the preferred provider of this value. New value demand, expertise & skills, market knowledge & experience. Frow et al.,2014Table 4: Structure of value proposition.As discussed in the above section, value proposition has a significant role in a company’s core strategy (Payne and Frow, 2014).
A start-up company that lacks a superior, customer focused value proposition will not survive, as there can be impediment in the company’s success in the business market (Payne and Frow, 2014). To help with developing a value proposition with superior value, three kinds of value propositions: all benefits, favorable points of difference and resonating focus are proposed by Anderson et al. (2006). All three-value proposition types are meant for a target customer segment and with a focus on creating superior values (Anderson et.al 2006).To ensure value capturing, it is very important that the chosen value proposition can match-up to the company’s needs and goals. Consequently, table 5 provides a summary of how a company can select the best value proposition for his customer. This was done by identifying and selecting a value proposition from the value proposition types, i.
e. all benefits, favorable points of difference and resonating focus. Table 5 summarizes all three types of Value Propositions with their benefits and pitfalls.Types of value propositionsType of Value proposition Consists of: Answer customer question Requires Potential PitfallAll benefits All benefits customers receive from the market offering “Why should our firm purchase your offering?” Knowledge of own market offering Benefit assertionFavourable point of differences All favorable points of difference a market offering has relative to the next best alternative “Why should our firm purchase your offering instead of your competitor’s?” Knowledge of own market offering and next best alternative Value presumptionResonating Focus The one or two points of difference (and, perhaps, a point of parity) whose improvement will deliver the greatest value to the customer for near future.”What is most worthwhile for our firm to keep in mind about your offering?” Knowledge of how own market offering delivers superior value to customers, compared with next best alternative Requires research on customer value and competitive offeringTable 5: Three types of value proposition (Anderson et.
al, 2006)The first is All Benefits. Here the company lists down all benefits likely to be associated with the customer. Since less information on market knowledge and customers exists, competitors are used as a baseline and needed. This information gap can lead to a potential drawback of “benefit assertion”, creating a mirage as most listed benefits may not be realized by customers. Since this type of value proposition is mainly focused and built on points of parity with respect to the next best alternative, those points of differences may remain unnoticed, which is another drawback (Anderson et.al., 2006). The second type is the Favorable points of difference.
This highlights the favorable points of difference on market offering compared to the next best alternative. The drawback with this second type is that, even though it highlights the points of difference compared to the next best alternative, it is not certain that those points of differences really are important and deliver superior value to the customer. (Anderson et.al., 2006)The last type, Resonating focus value proposition, highlights a few points of both parties and differences that provide superior value benefits to the customer relative to customer requirements in the next best alternative. Contrary to the existence of few favorable points of difference, the resonating focus type has points of differences which deliver the highest value to the customer.
Keeping few points of both parties, the supplier can encounter and eliminate perceptions of the customers. From table 5, and among the three types of value propositions, resonating focus was chosen. This is because the project answers the customer question, “what unique value proposition can SMatEquip offer its customer that creates a new value demand and makes them competitive?”Resonating focus is chosen for this study because of three key reasons. First, the Client company has extensive knowledge of how the market operates, hence can deliver superior value to customers, compared with next best alternative. Secondly, the value proposition to be delivered will create a new value demand, and open a great chance for expansion in the near future.
Finally, resonating focus value proposition comparatively is superior and most effective type of value proposition to ensure value capturing by the customer. 2.1.2 Process to develop a value propositionValue proposition is one important concept of customer retention as such must solve customer problem, communicated clearly, simple and state both tangible and intangible benefits to be derived with its associated cost for each customer segment (Osterwalder et al., 2014). Therefore, an early stage start-up ought to develop its value proposition with much attention to the customer requirements. Unfortunately, early stage start-ups entrepreneurs lack detailed information about their technology and the marketplace they plan to enter (Ries, 2011).
A way to gain information about the market and the potential impact of their business idea is to engage in the customer discovery process (Blank, 2005). Blank (2005) Customer Development Model was leveraged to develop our value proposition. The model is an iterative and flexible process that reflects the ambiguous nature of an early stage start-up and launching new value demands.
The model tests the key assumptions that underpin initial ideas about product and its market. The model consists of four distinct but interconnected steps, namely: Customer discovery, Customer validation, Customer creation and Company building. The Customer discovery step which is a very important step in helping to create a value proposition focuses on understanding the customer, their problems, prioritized values and their buying behavior. The second step, helps develop a replicable sales process to scale the company.
The third step which is the customer creation step, help generate a value demand and identity and tease out potential customers in the industry. The final step, i.e.
Company building, focuses on building the start-up to scale and formulate their business plan. For the purposes of this project and our goal of formulating a value proposition for an equipment rental company, and we will focus more on the first step, Customer discovery to develop our value proposition. The rest are out of scope for this project. Figure 1 below illustrates the Customer development model. Figure 1: Customer Development Model (Bank, 2005).
In the Customer discovery stage which is the focus to develop a value proposition, Blank (2005) describes a systematic approach to identify potential customers and the problems you could solve for them. The goal of this approach is to help start-up companies identify their first customers. In summary, the process involves knowing who your first customers are, the specific problem to be solved and turning these assumptions into hypotheses, which will be tested mainly through interviews with the customers. In this project the early customer is known and in cases when the first customer is unknown, Blank (2005) provides a description of a group that will inform you of a potential customer.
These are: • They have a business problem.• They are aware that they have this problem.• They have searched for a solution.• They have put together a “Do it yourself” solution.• They have access to the budget required to purchase a solution.The four-main discovery process in a value proposition development are: Stating your hypotheses, testing hypotheses, testing product concept and evaluating customer feedback and setting next steps (Blank, 2005).
These processes are described in detail below:Stage 1: Stating your hypothesesThe first stage involves documenting a summary of your assumptions to avoid pitfalls of mentally readjusting hypotheses between and during customer conversations. Documentation if not done will lead to poor testing and poor reliability of hypotheses. Teamwork plays an important role in this process, as it will help create a joint ownership of the most fundamental ideas that underpin your business. In addition, there would be a mutual understanding among the team members when the perceived hypotheses need some changes as they were involved from the onset.
Accuracy is key to arrive at information that will be of most use to you. (Vlaskovits, and Cooper, 2010). For a robust customer development model to understand the customer requirements, a company need to find information about the product concept, customers and the problems they want to solve, distribution and pricing, demand creation, market type and competition. This will inform the Client Company of how to approach the problem strategically.Stage 2: Testing your hypothesesThis second stage involves four processes outlined in figure 2 below:vFigure 2: Hypotheses testing stages (Source: Blank, 2005).Step 1: Tap your network – This involves connecting with friends, colleagues and so on to populate a list of potential customers to test your hypotheses. The goal not to sell but is to learn and gather as much information as possible so rank or position of contacts are irrelevant.
Step 2: Prepare your problem presentation – The goal here is to develop an explicitly clear presentation based on your hypotheses about customers and their problems for a feedback. The point here is to find the severity of their problems and obtain information that differs from your own view. Step 3: Gain customer insights – Capitalize on interactions with customers to acquire in-depth knowledge about their businesses by asking them questions beyond their problems. An example: who their likely users would be of your solution, and who the likely buyers would be of your solution and so on.
Step 4: Map the market infrastructure- Engage in conferences and trade shows to gain a better understanding of the environment and its players. Find avenues to talk to potential competitor’s power in the market. And find out trends of the market and potential users. The interaction with potential customers will serve as a channel to gather more information to update your hypotheses to update your problem statement to your target market challenges.Stage 3: Testing your conceptThis third step involves three stages described in figure 3 below.Figure 3: Concept testing stages (Source: Blank, 2005).Once a firm understanding of the customer’s problem, their business, and the space in which they operate is reached, testing and qualifying your product concept is done.
Insight gathered can be applied to your hypotheses to get a further understanding if the product solution offered is headed in the right direction or not. A team discussion has to be to consider the implications for your customer, your problem statement, your product hypothesis and your product specifications to determine if your product is a partial fit for the customers’ problems. If so changes to features must be done and new presentation for feedback would have to be done.
This feedback ought to be shared with the team and enough information would have been gathered so far to produce a product requirement document ,sales revenue plan and a business ; product plan. A minimum viable product is then formed. The product requirement document, sales revenue plan, business ; product plan and the minimum viable product are out of scope for this project and as such not discussed.Stage 4: Evaluate customer feedback and set next steps This final stage involves weighing the information gathered in stages two and three from customers to find out if your product solution solves the customer problem. If not conduct another iteration of problem/solution validation (that is, phases 2 and 3) or to halt your plans.
Verifying for a fit between the product solution and customer problem is of upmost importance and the question to as is if your customer is satisfied with the product solution. If it does not, a review through iteration with customer feedback needs to be carried out. Condense all the information gathered from potential customers to generate a simple, clear value proposition. Figure 4 illustrates the four phases of customer discovery to be used for the value proposition development. Figure 4: Conceptual framework (Source: Blank, 2005).2.1.
3 Active customer collaboration in value creation The traditional approach has been that companies create value, but during the past few decades, customers have become active collaborators in value creation (Moeller et al., 2013). The value creation process entails collaborating with customers and learning from them, as well as being adaptive and loyal to their most desired needs.
(Vargo and Lusch, 2004). To understand value creation through active collaboration, it is necessary to view the customer as the value creator and the service provider and other customers as enabler of facilitator of that value creation (Grönroos, 2011). Customer participation refers to activities customers take within the service process and contrasts the different types and shares of activities taken by customers and service providers as well as their implications for both parties (Bendapudi and Leone, 2003). Such customer participation often implies better productivity for service providers, which can outsource or externalize their activities to customers (Bettencourt et al., 2002). This approach enables firms to derive true value as of the perceived value offered (Fitzgerald et al, 2013).As the North American, equipment rental industry continuous to grow and shift towards technology adaptation (Brody et al, 2015), competition no longer takes place between individual companies, but between entire value chains. Active end-to-end customer collaboration helps companies identify actual needs and adopt simplified, standardized solutions and opportunities thus enabling all the participants in the value chain to prevail and grow.
For empirical support, several studies provide evidence of absorptive capacity enabling firms to better profit from collaboration, thus to realize higher levels of innovation, cost reduction and success. Osterwalder et al. (2015) went on to document that, customer collaboration significantly better intra-alliance knowledge transfer for higher levels of absorptive capacity. As such, platforms as a service must build very pragmatic process on how value propositions are designedConsidering the origin of value and the interaction of customer and provider, three spheres of value creation can be distinguished: a provider sphere, a joint sphere, and a customer sphere (Grönroos, 2011). With the provider sphere, there is no direct interaction between customer and provider, and it only potentially creates value for the customer by preparing for joint value creation. In the joint sphere, direct interaction between provider and customer exists, so value is usually created by customers (Grönroos, 2011). In contrast, interaction in the customer sphere happens between customers or with the facilities of the provider, but without the active and personal involvement of the service provider.The core of this research focuses on the two latter spheres: joint and customer spheres, because the co-creator, which in our case was the equipment rental, company, required customers either to provide data about their preferences independently or jointly to configure the customized output.
Figure 5: Value co?creation in a service logic?based view (source: Grönroos, 2011).188.8.131.52 How to collaborate and benefits derived from co-development with customers Collaborating with customers to develop a product is an important process in the value capturing process and a valuable skill to develop (Ballantyne and Varey, 2006). This process can help distinguish and drive a start-up company from zero to thousands of customers within its first two years of operation (Kristensson et al.
, 2008). The better we become at working with our customers the more valuable we will become to them. Table 6 below describes how to collaborate with customers and the benefits associated with co-development with customers.Step Activity Description Benefits of co-development1 Make the customer your partner Have an open mind about ideas and partner with your customers, assimilating feedback into your product solution Creates a sense of ownership to customers and makes it far easier for them to accept the solution. 2 Teach them how to give feedback Coach customers on the level of feedback needed at each phase of a project. If customers are taught the exact kind of feedback expected at each stage of co-development, a more likelihood of getting useful and positive feedback. Use examples with caveats if possible.
Accurate feedback for modifications to suit existing condition.3 Welcome changing requirements Welcome opinions and ideas that changes requirements, even at late stages in the development cycle rather than discouraging change. • Provides customers more of what they need.• Elicits customer discovery of a better solution. 4 Define acceptance criteria up front Ask “How will we know when it’s done?”. This question is important to avoid over designing the product solution and spinning wheels. An accepted baseline test could be conducted to validate the solution. Accepted and validated product solution.
5 Focus customers on what and why, not how Coach customers on what they want accomplished and why it is valuable to them but not how to implement solutions. Implementation is not their job as they maybe overwhelmed. A clear and precise product value developed.6 Use the “feedback loop” in critical communications Use clear communication means to avoid ambiguous and miscommunication.
Ask for clarification from customer if feedback received is not clear. This will help resolve ambiguities and deepen a common understanding thus a mutual close to perfect solution formed. 7 Ask for help when you need it Customers know what they need and they have a vested interest in getting it from us. If we encounter difficulty or have questions that our customer can answer then ask them, it is in their best interest to help us. Learning new ways and ideas.Table 6: Shows how to collaborate with customers and the benefits associated with co-development (source: Kristensson et al., 2008).
2.1.4 Value created by IIoTTechnology is fast advancing and the Industrial Internet of Things (IIoT), refers to the integration of Internet of Things (IoT) technologies into industrial value creation enabling manufacturers to harness entirely digitized, connected, smart, and decentralized value chains (Hartmann and Halecker, 2015). Ulrich (2005) went on further to explain the need for an understanding of the industry one operates in and how people create new technologies to make businesses and firms stay ahead of competition. The benefits associated with the adoption of IIoT technology are enormous and one needs to perform a thorough assessment to prioritise and match the technology to their needs.
According to Ulrich (2005), there are key trends in technology and are categorized into four dimensions: namely (i) Efficiency (ii) Customization (iii) Connectivity (iv) Speed. Some values derived are summarized in Table 7 below.Technology Trend Benefits (value created) i. Efficiency • Optimization of resource utilization.• Digital simulations, continuous data, and autonomous control loops enable leaner processes.• Reduction of manual activities due to higher automation levels.• Optimization of product and process quality.• Higher productivity, machine availability, production process and output robustness.
• Lower scrap and failure rates.ii. Customization • Flexible operation and monitoring.• Higher quality of work due to simplification and trimming of processes and tasks based on technical assistance systems.• Self-optimization of machinery.iii. Connectivity • Strategic differentiation and competitive advantages based on innovative offerings.
• Enhanced value creation due to remote access.• Several cost reduction potentials due to proactive maintenance.iv. Speed. • Shorter set-up and lead times as well as faster machine speed.• Facilitate faster and more flexible response to customer demands.
• Decrease of time-to-market due to simulations.• Reduction of non-value-adding activities and time.Table 7: Summary of key trends in technology (source: Ulrich, 2005).Porter and Heppelmann (2014) claim that the essential and new thing in IoT is the “things” and what the things can do.
Companies should identify and analyze favourable and unfavourable service experiences and create a knowledge base for selecting the right technology to meet their needs and improve business processes (Fitzgerald et al., 2013).2.2 IIoT- based product and servicesThis section discusses IIoT based products and services (hybrid offers) with emphasis on process improvement and customer satisfaction.2.
2.1 Benefits of smart connected “things”The area of equipment rentals has seen fewer companies leveraging analytics via Internet of Things to create value and offer an excellent customer experience (Hartikainen, 2017). IoT). IIoT refers to the integration of Internet of Things (IoT) technologies into industrial value creation enabling manufacturers to harness entirely digitized, connected, smart, and decentralized value chains (Hartmann and Halecker, 2015). The value of IoT cloud lies on its actual process of dissemination with devices to the extraction of information for some specific purposes. An example is that, IIoT is promised to increase efficiency and flexibility as well as decrease time-to-market and excess production on the one hand, but it is also closely related to changing workforce qualifications, data security concerns, and expiring business models on the other hand (Kagermann et al., 2013).
No organization is sheltered from the competitive disruption emerging from the adoption of smart connected things (Fitzgerald et al., 2013). Westerman and Bonnet (2015) argue that, most big traditional companies seem to have the notion that following the situation is a safer strategy than being a pioneer of a new product.
Benefits realized from digital transformation are divided into three main groups. (Fitzgerald et al., 2013). Namely:1) Better customer experiences and engagement2) Streamlined operations and3) New lines of business. Andal-Ancion et al. (2003) go even deeper into the drivers that determine competitiveBased on a study of large corporations in North America on the competitive advantages of new information technologies, some drivers were identified and grouped into three main forms (Andal-Ancion et al., 2003).
Namely:A. Inherent characteristics of product or serviceB. Interactions between company and its customersC. Interactions between company and its partners and competitorsDrivers with descriptions by Andal-Ancion et al. (2003) are populated above in table 8 and linked to the benefits drawn from Fitzgerald et al.
(2013), to illustrate how these drivers could bring benefits to a company to be more competitive.Type Driver (Andal-Ancion et al.,2003) Description Benefits (Fitzgerald et al. 2013)A Information intensity Information is easier to store and search in digital form.eg. Service manuals.
1 ; 2 Customizability Offering an easier tailored for individual customers. 1 Electronic delivery Some physical products are cheaper and easier to deliver electronically.eg. monthly service reports. 1;2 Aggregation effects Bundling one service or product from collaborating companies behind ne interface.eg.
Amazon offering more than just books nowadays through partnerships. 2;3B Search costs It is easier for customers to find exactly what they need to compare prices and features when it is digitally available. 1 Real-time interface Customers get real-time interface and benefits. e.g. 24/7 customer service delivery.
1 Contracting risk The risk of buying cheap and simple things online is low. 1C Network effects There can be more benefits in more people using the same service and from collaborating companies.1;2 Standardized benefits Companies can synchronize and standardize certain processes to gain efficiency in B2B transactions. 1;2 Missing competencies Technology can facilitate alliances between companies to fill in competencies gaps. e.
g. IT partners 2Table 8: Shows the drivers and benefits derived from smart connected things in organizations (Andal-Ancion et al.,2003, and Fitzgerald et al., 2013).2.2.
2 Prospects of IoT application Digitization via IoT in companies is relatively growing in Canada and the use cases has so far been positive. (Woodhead et al., 2018). In the context of this project where equipment rental companies rent their units to their customers for construction purposes, there is the aspect of a project manager responsible for the project and plenty of subcontractors specialized on some expertise of the construction project, e.g. excavation, loading and masonry work. In addition, a constant attempt for performance measurement, sustainable growth, profitability and competitive advantage.
(Horta et al., 2012).Project Managers go through many headaches trying to pull all strings to ensure that his value chain delivers his project on time and within budget and that, the overall project deadlines are met.
Time is valuable in construction, and delays cost money. When rented equipments breaks down, things don’t get done and it means extended hours on site and delays on other jobs around the site. This is the case where IIoT can reduce or eliminate these inconveniences.IoT can help manage these equipments effectively by actively providing the necessary information for key decision-making.
Much the same way cars are now outfitted with sensors to communicate key data about their functions to the service crew, so too can construction equipments communicate potential issues and malfunctions. This allows for proactive maintenance, which keeps everything moving along smoothly. However, IoT is underutilized in the construction as shown in figure 6 below and there is a lot of room for development in this area. (Mckinsey, 2015).The red section in the figure 6, indicates relatively low digitization. Figure 6 : Shows low digitization in construction (source: Mckinsey, 2015).Application of IoT in the rental companies might have started, but there is still room for more radical digital transformation to be able to realize all the values that comes with it. Gartner (2017) describes the prospects of IoT platform as being at its peak of inflated expectations and has between two to five years cycle of mainstream adoption as shown in figure 7 below.
As such we could say now is a good time for IoT adoption and the technology has good prospects in future and worth embracing. Figure 7: Gartner hype cycle (source: Gartner, 2017)2.3 Data Analytics CapabilityThis section discusses data analytics, especially from the perspective of IoT for big data.2.3.1 Adoption of IoT in rental industry to generate industrial big dataDespite the high level of IoT adoption in other industries for big data the rental industry has seen less of its use (Woodhead et al.
, 2018). West (2012) describes big data as simply the large volume of both structured and unstructured data analyzed to find trends, patterns and associations in relation to human behavior and interactions. The amount of data collected is not as important as what one does with it, hence analyzing big data results such as trends, predictions, and projections can inform an organization to take better strategic business decisions and moves. The goal of IoT adoption in the equipment rental industry is to realize smart equipments where machines and resources communicate in a connected network. IoT adoption increases the total volume of the generated data transforming the industrial data into industrial Big Data (Mourtzis et al., 2016). Thus, transforming businesses from a reactive mode into a proactive way of thinking.
According to Mourtzis et al. (2016), the adoption process is quite easy nowadays due to the low cost of data acquisition. Some benefits that are derived from industrial big data are:1.
Helps to identify root causes of failures and issues in real time to save time and money.2. Helps to add more value to customer experience.
3. Personalizes customer experience.4. It improves customer engagement and loyalty 5. Helps organizations to fully understand of data driven marketing.6. Helps to generate and predict customer offers based on the purchasing habits.Manyika et al.
(2011) predicts that, data generated from the Internet of Things will grow exponentially as the number of connected nodes increases. Figure below illustrates different industry connected nodes. It shows how rapid these industries have grown from 2010 to 2015. In 2010 the number of connected nodes ranged between 17 – 50 million and spiked to 72 -215 million in 2015, showing a massive adoption rate.Ackerman and Guizzo (2011) recognizes both sensors and big data as to of the five technologies that will shape the world as shown in figure 8.
Wireless networked sensors being used in our day-to-day activities will soon form a new web and it will only be of value if data it generates can be collected, analyzed and interpreted (Raskino, 2005). Figure 8 : Estimated numbers of connected nodes based on different sectors are presented in MillionAdoption of IoT will drive the transformation of traditional rental companies into a new data-driven modern digitalized one, hence generating significant economic opportunities. Industrial IoT will also empower the modern rental companies to adopt strategies and handle competitive pressure more easily (Mourtzis et al., 2016).
2.3.2 IIoT pedagogy based on equipment health and availability.Equipment rental has now grown to a very large-scale business attracting a huge ecosystem and financial flows. Equipments are needed by project managers to complete their projects on time and within budget, as such equipment health and availability influences their project deadlines. Consequently, there is the need to train and offer education on data-driven approaches to help increase efficiencies, costs reductions, time savings, and lean management (Yin et al.
, 2014).Wealth of data is exponentially growing and challenging rental organizations to rethink teaching their team the importance of equipment health data (Bernold, 2013). With education as a catalyst, IoT technology is moving from a knowledge transfer model to a collaborative model that helps both technical and non-technical staff increase their knowledge and develop skills needed to ensure availability of equipments (Chen et al., 2012). This is done to ensuring every member of the team understands the need to keep equipments up and running to meet the organizations business goals.
The implications of this education are enormous. For example, learners of remote connectivity and analytics enabled through Industrial IoT (IIoT) will learn how to effectively analyze fault codes and diagnose problems online to reduce the number of maintenance done on site. Modern equipments used in the construction, industrial, and transportation industries has grown increasingly complex and often needs a substantial knowledge in electronics, IT, and software (Chen et al., 2012). This makes it challenging for generalist maintenance technicians to do calibrations and resolve equipment problems. Until recently, Industrial IoT (IIoT) provides two new opportunities for business growth: Product-as-a-Service and Predictive Maintenance (Bernold, 2013).Product-as-a-Service – This transforms the customer relationship from one that focuses on the initial delivery of a solution, into a results-oriented continuous service offering that assures high equipment availability.
Predictive Maintenance – This involves using IIoT and analytics to monitor equipment’s health and proactive measures and decisions taken to initiate a repair prior to failure. This process assures equipment availability. Also collecting data remotely will also help reduce technician’s carbon footprints through fewer field trips.2.4 Lessons Learned• Every customer is unique and collaboration is essential during value creation to ensure value capturing.• Keep a close feedback loop with customers to eliminate ambiguities and deepen a common understanding in value proposition formulation. • There are three types of value propositions, namely, “All benefits”, “Favorable point of differences” and “Resonating focus”.
Knowing what each type entails, helps to choose the right one for a value proposition formulation. 2.5 SummaryThe purpose of the literature review was to discuss the development of value proposition through customer collaboration and identify the types of value propositions and how to effectively collaborate with customers to co-develop using Kristensson et al., (2008) seven steps guide. By knowing the right type, structure and how to collaborate to develop the value proposition, the Client Company will increase the likelihood of value capturing by their customers. The review also helped Client companies identify new value demand markets weren’t aware of. 3 RESEARCH DESIGN AND METHODS This chapter presents the research design and detailed method used to produce the deliverables of this project. It is organised into three sections that includes the overall research method and expected results. The overall research method, describes in steps how the whole research is carried out to develop a value proposition for an equipment rental company. The next section describes in detail, the steps taken to collect data and subsequently talks about the qualitative data analysis done on the data collected. The final section provides a summary of this chapter. 3.1 Overall Research Method This section named ‘Overall Research method’ represents all the steps involved in this research to produce the outlined deliverables. The following table represents the overall research method.Step Activity undertaken to produce deliverable Outcome1 Review literature on value proposition development and application of IIoT in equipment rental firms. (I) Types of value propositions. (II) Understanding the benefits of IIoT use in rental firms. 2 Draft interview questions based on the literature review and interview some selected experienced service engineers, key customers, supervisors and managers of equipment rental companies. (I) Answers to questions.(II) Data on equipment renting.3 Data evaluation and analysis Needs for data analytics service support in equipment renting.4 Install and test IIoT devices Feedback from customers.5 Formulate value proposition SMatEquip’s value proposition. 6 Establish lessons learned Key lessons from collaborating with a large customer to develop its product.Table 9 : Research Method.3.2 Research stepsThe project includes six activities to produce outcomes needed for a successful completion. The six activities are as follows:3.2.1 The first activity focuses on reviewing literature to identify the types of value propositions to help us understand how the value we deliver impacts our customers and some insights on the benefits of adopting IIoT in rental firms. A detailed description of a process SMatEquip used by collaborating with the Customer was outlined to guide our product development process.3.2.2 The second stage was to collaborate with customer and some other key customers. We then conducted interviews with some selected experienced service engineers, key customers, supervisors and managers of equipment rental companies who are knowledgeable, have first hand experience. Their total number was twenty participants: (n=20), specifically: Managers (n=4), Supervisors (n= 4), Key customers (n=8), Service Engineers (n= 4). The criteria for selecting the participants including the key customers was that, at one point in their careers, they worked for a rental company and have 10 or more years of engineering experience in the rental industry. Hence well vexed in the rental processes and field in question. The selected participants, who were known to the author, were interviewed informally to share their opinions and ideas though face-to-face interviews, telephone interviews or answer some semi-structured questions drafted. The physical and telephone interactions lasted up to 25 – 35 minutes, and the feedback generated from the interviews were audio recorded for future clarifications. To ensure more informal and open discussion, interviewees could either speak in French or English languages, and notes taken during the interviews and after the main observations right after the interviews. The purpose of these interviews was to get insights into the current rental practices, limitations and strategies managers and ecosystem players have adopted to sustain and grow their companies. During the interview, “SMatEquip’s” initial value proposition was explained and all necessary information needed to determine how equipment rental companies can be distinct and stay ahead of competition, were collected.3.2.3 After all relevant data had been collected, the primary data sets i.e. insights from service engineers, key customers, supervisors and managers of equipment rental companies were analyzed using qualitative analysis, while the secondary data sets, i.e. data from websites was analyzed using content analysis (capture key information into the framework). For this project, both primary and secondary data was used for analysis. After these interviews, the feedback was transcribed as insights, and they were analyzed by looking for trends, differences & patterns within the results and feedback received and finally synthesizing to form a concept.3.2.4 This step involved installation and synchronization of IoT sensors (plug and play) on the rental equipments and testing using feedback and trends received from the concept as a guide to find best fit to solve the customer problem.3.2.5 This activity helped “SMatEquip” to design a unique value proposition using Blank (2005) framework. The framework consisted of four important steps i.e. stating your hypotheses, testing hypotheses, testing product concept and evaluating customer feedback & setting next steps. The stating your hypotheses, involved documenting a summary of your assumptions to avoid pitfalls of mentally readjusting hypotheses between and during customer conversations. This will inform the Client Company of how to approach the problem strategically. The second step was testing hypotheses and involved the interaction with potential customers to serve as a channel to gather more information to update your hypotheses and update your problem statement to your target market challenges. The third step which is the testing of the product concept to determine if your product is a fit for the customers’ problem. Finally, the last step involves weighing the information gathered in stages two and three form customers to find out if your product solution solves the customer problem. This step is an iterative phase of learning, retesting and making better value propositions to customer’s problems. Identifying these phase outcomes, guided us to identify and formulate an ideal and unique value proposition for Cooper Equipment Rentals.3.2.6 This is the final step of the research and established lessons learnt from collaborating with customer to develop SMatEquip’s product and create a new value demand was outlined. The outcomes of these activities were inputs from collaborating end-to-end with the customer.3.3 Interview QuestionsThe core of this project was the collaboration process between the client and the customer. Value captured was due to the mutual understanding of priorities set and business goals. To enable SMatEquip to successfully achieve this, questions asked were based on Ulrich’s (2008) assessment process, which elicited the importance of technology within organizations and how technology can create a competitive advantage. Questions asked are listed below in Table 10.No QUESTIONS1 What is the problem that is most urgent?2 What do you consider the best way to resolve the problem? 3 What are your current rental practices?4 Is there any form of analysis with the aid of technology currently set in place?5 If yes, what challenges/ limitations do you currently face?6 What factors are being monitored?7 What is your estimated annual budget on maintenance?8 Which factors should be created that the industry has never offered?9Which factors should be reduced well below the industry’s standard?10 Which factors should be raised well above the industry’s standard?11 Which of the factors does the industry takes for granted should be eliminated?Table 10 : List of questions asked.The first set of questions i.e. 1-6, in table 10 above, will help inform us on the current problem, processes and scope of knowledge in technology for rental companies. The last four questions (8-12) in table 4 were extracts from Chan et al. (2005). These key four framework questions enlightened SMatEquip on how to create a value proposition that suits not only the customer but benefit the equipment rental industry by creating a new value demand and give a revealing new look at old perceived truths. Figure 9 are the four key questions that will be discussed in the next section. Figure 9 : The four actions framework (Chan et al., 2005).3.3.1 Insights of key four framework questions.184.108.40.206 Which factors should be reduced well below the industry’s standard? This question forced SMatEquip to consider eliminating some factors such as manual equipment hours tracking that have long been used by Cooper Equipment Rentals.220.127.116.11 Which factors should be created that the industry has never offered? This forced SMatEquip to determine whether its products or services have been over-designed in the race to match and beat customer need. Over designing to capture value meant increasing SMatEquip’s cost structure for no gain.18.104.22.168 Which factors should be raised well above the industry’s standard? This pushed SMatEquip to uncover and eliminate the compromises Cooper Equipment Rentals used to make. An example is manually updating the CRM system with equipment stockist by customer.22.214.171.124 Which of the factors does the industry takes for granted should be eliminated? This question helped SMatEquip to discover entirely new sources of value for Cooper Equipment Rentals, create new demand and shift the strategic pricing of the industry. Collectively, these insightful questions helped SMatEquip to systematically explore how it should reconstruct Cooper Equipment Rentals value elements to offer an entirely new experience: blue oceans of uncontested market space, while simultaneously keeping its cost structure low.3.4 Data AcquisitionFor our study, the principal data collection method was interviewing. The first step begun with collecting a list of factors to prioritize when creating a value proposition via the use of Internet of Things from our literature and the customer’s website. Once that was done, the next step was to build a qualitative understanding of the current practices, challenges and needs of Cooper Equipment Rental Company through informal interviews. A total of 20 qualified and experienced individuals.i.e. service engineers, key customers, supervisors and managers of equipment rental firms were interviewed. Questions asked were semi-structured and built by leveraging learnings from the literature, particularly key four framework design questions extracted from Chan et al. (2005). The full list of questions used can be found in Table 10. The interview candidates were known to the author and were selected as a function of the subjects addressed in questions drafted. The factors that were found not important even after carrying out further research were omitted from the analysis process.3.5 Data AnalysisThe data analysis was based on qualitative comparative analysis. Interviewees were grouped into four groups, namely, supervisors, service engineers, key customers and managers. The analysis begun by cross-referencing key factors and ideas among interview subjects that creates value for Cooper Equipment Rental Company. All factors relevant to value creation were then populated to build a holistic list. This was followed by comparing all responses and finding out trends, differences and patterns that were present. Common factors were clustered and categorized into concepts that will help in a concept development (value proposition). The concept implementation, iterations and integration was used to develop a unique value proposition for Cooper Equipment Rentals. Collaboration formed a major part of the iteration process for developing the value proposition.4 RESULTS Chapter 4 is organized into four sections. It describes the results derived from the analysis and implementation of the assessment framework to best understand what factors and processes to prioritize when developing a value proposition for Cooper Equipment Rentals to maintain a competitive edge. The first section identified the individuals who took part in the informal interview process, stating clearly their company, role and years of experience. Some questions drafted for the interview were drawn from examining literature on value proposition development and IIoT application. The second section shows the first deliverable. i.e. describes the collaboration process with Cooper Equipment Rentals and analyzes the answers to questions collected, finding out the most prioritized values present in most of the responses from the participants. Once that is done, an outlined of a more precise concept in order of most prioritized factor to consider when developing our product is presented in the same section. The third section shows the second deliverable i.e. finds out which of the prioritized values were present in Cooper Equipment Rentals’ operations and those absent or need focus by the company. This informed SMatEquip to formulate a succinct value proposition for Cooper Equipment Rentals. Lessons learned drawn from the collaboration process was outlined in the same section. Section 4 describes the summary.4.1 Interview ParticipantsThe tables below give details of the questions asked, and the participants’ role and company of work.No QUESTIONS1 What is the problem that is most urgent?2 What do you consider the best way to resolve the problem? 3 What are your current rental practices?4 Is there any form of analysis with the aid of technology currently set in place?5 If yes, what challenges/ limitations do you currently face?6 What factors are being monitored?7 What is your estimated annual budget on maintenance?8 Which factors should be created that the industry has never offered?9 Which factors should be reduced well below the industry’s standard?10 Which factors should be raised well above the industry’s standard?11 Which of the factors does the industry takes for granted should be eliminated?Table 11: Review of questions to the service engineers, key customers, supervisors and managers.The foundation of this project involves interviewing and collaborating with experienced service engineers, key customers, supervisors and managers of equipment rental companies (n=20). The criteria for selection was based on engineering professionals with in-depth knowledge about equipment rentals in Canada and must have ten years or more of experience in that field. The selected participants, who were known to the author, were interviewed informally to share their opinions and ideas though face-to-face interviews, telephone interviews or answer some semi-structured questions drafted. The physical and telephone interactions lasted up to 25 – 35 minutes, and the feedback generated from the interviews were audio recorded for future clarifications. Most interviews were done at their work locations on a face-to-face basis to experience some of their challenges first hand and to observe some facial and body language when expressing their opinion. The aim of this interview was to get insights into the current practices adopted by equipment rental companies and to know how best to craft a value proposition for Cooper Equipment Rentals. During the interview, the value proposition for “SmatEquip” was explained and necessary information needed to determine how Cooper Equipment Rentals can stay competitive were collected. See table 6 for list of participants and their relevant details.No: Company Role No: of years1 Cooper equipment Rentals Supervisor 1 102 Cooper equipment Rentals Service Supervisor 2 133 Cooper equipment Rentals Workshop Supervisor 3 104 Cooper equipment Rentals Tech. Supervisor 4 >305 Cooper equipment Rentals Branch Manager 1 116 Robertson Rent All Inc. (Orleans) Branch Manager 2 147 Ontario Rental Supply Branch Manager 3 >148 Robertson Rent All Inc. (Kanata) Branch Manager 4 >109 Ontario Rental Supply Service Engineer 1 1110 United Rentals Service Engineer 2 1211 Ontario Rental Supply Service Engineer 3 >1012 Robertson Rent All Inc. (Orleans) Service Engineer 4 >1513 Warlyn Construction Key Customer 1 2614 Ottawa Interlock Contractors Key Customer 2 1215 Elite Construction Inc. Key Customer 3 >1016 Nepean General Contractors Key Customer 4 >2017 Honey Construction Ltd Key Customer 5 1118 Ellis Don Construction Key Customer 6 >2519 RND Construction Ltd Key Customer 7 >1820 PCL Constructors Canada Inc. Key Customer 8 >10Table 12 : List of participants interviewed.To simplify the data acquisition, participants were grouped into four main categories, namely: (i) Supervisors (ii) Service Engineers (iii) Mangers and (iv) Key Customers. In addition, names of participants could not be disclosed due to ethical reasons.4.2 Collaboration process with Cooper Equipment Rentals For SMatEquip to be able to create a succinct value proposition that matches to the customer’s requirements and create a new value demand in equipment rentals companies, we had to engage the customer from the onset. The value creation process entailed collaborating with customers and learning from them, as well as being adaptive and loyal to their most desired needs. (Vargo and Lusch, 2004). We started by using lessons in Kristensson et al., (2008), to help SMatEquip to actively involve its customer in the co-creation process to increase the likelihood of value capturing. Table 13 describes the collaboration process SMatEquip used.Step Activity Description1 SMatEquip partnership with Cooper Equip. Rentals and some Key customers. The first activity was SMatEquip’s partnering and welcoming ideas through informal discussions with some key customers and selected employees of the customer (service engineers, supervisors & managers) after the initial communication of our perceived values. Preference on value requirements was given to the selected employees of the customer. They know exactly what they need. The Client involved itself in the customer’s safety and toolbox meetings to gain an in-depth understanding of the real problem and create a sense of partnership to achieve a common goal. SMatEquip had an open mind about customer ideas and encouraged customer involvement, assimilating feedback into the product solution. By doing this, it created a sense of ownership to our customer, Cooper Equipment Rentals and made it easier for them to accept the solution as it was a collaborative and agreed solution. One key strategy of partnering with our Customer was to position ourselves to see through the lens of the customer. That helped both parties to focus on the best and cost effective was to solve the problem. 2 SMatEquip taught Customer how to give feedback. By coaching selected service engineers, supervisors & managers of Cooper Equipment Rentals, on the level of information and feedback we would need during each phase of co-development, we progressed faster in finding the right solution. Useful and well-aligned feedbacks helped in easier brainstorming sessions and modifications made to suit the customer need. 3 SMatEquip welcomed changing requirements The Client maintained its grounds of being open minded about the product solution and welcomed opinions and ideas from the selected employees of Cooper Equipment Rentals. These ideas were documented and discussions were held with the team to brainstorm about changes to the scope of work. These changes to the requirements were then made to suit the Customer existing need. SMatEquip were open to modifications even at late stages in the development cycle and desisted from discouraging changes by the Customer. The result was a product solution that offered the Customer more of the values they needed contrary to what we perceived as the solution. 4 Client defining acceptance criteria up front The one question that kept us going and focused was the team’s ability to determine if we have accomplished the task of solving the customer problem. The question we kept asking in our morning meetings was that, “How will we know when it’s done?” This question was important to keep us on-track and focused to avoid over designing the product solution and spinning wheels. The accepted baseline between both parties was that, quantitatively there had to be an improvement in equipment availability in the first week of testing i.e. reduce breakdowns from the traditional five (5) equipments per week to a lesser value, using real-time equipment data. Once that validation was done, then we could say there was an acceptance to our product solution, though it did not end there. Modifications continued until a very effective and cost-effective solution found.5 Focusing customers on what and why, not how. Coaching of customers through discussions on what they wanted accomplished eventually and why it is valuable to them but not how to implement these solutions. It was SMatEquip’s job to collaborate, make modifications using customer feedback and implement modifications and not the job of Cooper Equipment Rentals. Not clearly defining roles in the co-development process can lead to team members and customer being overwhelmed. The customer was made to support by focusing on sharing all his ideas on what he wanted and goals, whilst the Client did the implementation. This led to a precise product value development.6 SMatEquip usage of the “feedback loop” in critical communications. SMatEquip used clear communication means to avoid ambiguous and miscommunication. All team members and Customer’s selected employees were encouraged to ask for clarity if in doubt of a process, a feedback or have any question. This open communication loop helped resolve ambiguities, deepened a common understanding thus a mutual, and close to perfect value created.7 Asking for help when you needed Cooper Equipment Rentals, our customer in this project, knew what they needed and they had a stake in getting it from the Client. When we encountered difficulty, or had questions that our Customer could answer due to their experience and market knowledge, we asked them to learn and share knowledge. It was in their best interest to help us help them in return.Table 13: Tabular description of the collaboration process with Cooper Equipment Rentals to develop its product.4.2.1 Interview results analysis Figure 10: Interview results from Supervisors.Figure 11: Interview results from Managers. Figure 12: Interview results from Service Engineers.Figure 13 : Interview results from Key Customers.From figure 10 above, it was found out that, the four supervisors interviewed valued and prioritised remote access, real-time data, faster response to customers, machine availability, automation of product and operational processes far more than cost implications that had 45% out of the total 63%. Few of the Supervisors gave insights of how using IoT in their domain will affect cost of operation in their team and saw it not an urgent factor in their domain. Managers on the other hand in figure 11, were very concerned about all six values mentioned above. They emphasized the need to have all six values in their line of business to help them drive their team to better serve their customers and achieve their business goals. Four Managers participated in this interview process.Figure 12, which was about Service Engineers, elicited some surprising results, as they talked less about “automation of product and operational processes and cost” and didn’t value those factors as much as the others. The two factors each had a 15% participation rate. Again, “machine availability” factor had a 45% participation rate and showed that what Service Engineers in Cooper Equipment prioritize most in their scope of work are remote access, real-time data, and faster response to their customers. Four Service Engineers were involved in the interview process.The final interview group involved eight Key Customers who had extensive knowledge in the rental industry and figure 13 elicited what they thought about the six key values outlined above. The top three values they requested for was machine availability, faster response to customers and remote access which had a 93% participation rate each, with a 15%,30% and 45% participation rate for automation of product and operational processes, cost and real-time values respectively. All results from the four groups of participants where then populated on bar chart in figure 14 to pictorially show the least and most prioritize values. Figure 14: Results of values prioritized across the four groups of participants.From the graph in Figure 14, it illustrates most of the interviewee’s found the remote access and faster response to customers as the most important values to consider when creating a value proposition for our early buyer, Cooper Equipment Rentals. Again, it can be deduced that, the third most important value to consider is real-time data. Followed by machine availability, cost and automation of product and operational processes.The six most important and dominant values that stood out in the interviews are systematically outlined below in table 14 in order of priority. These values represent priorities unique to Cooper Equipment Rentals.Order of Priority Colour Code Values (factors) to consider1st Remote Access.2nd Faster response to customers.3rd Real –time data.4th Machine availability.5th Cost6th Automation of product and operational processesTable 14 : Outline in order of priority of most important factors in value creation.4.3 Values Cooper Equipment Rentals needs to focus to increase likelihood of value capturingThis section describes which of the values are currently present in Cooper Equipment Rentals and which are not present that they need to attain. To see which values are already present in the company and which are absent, the Cooper Equipment Rentals was studied. The following table shows the results after studying the company.Values (factors) Present? (Y/N/Partially)EvidenceRemote Access. No. n/aFaster response to customers. No n/aReal –time data. No n/aMachine availability. Partially. Rental sales grew from $4.9M to $ 5.8M in 2017. Www. cooperequipment.caCost Yes. Cost management is practiced. Financial report (internal use only). Provided by Branch Manager.Automation of product and operational processes No n/aTable 15 : Results from examining Cooper Equipment Rental Company.The above table shows the extent to which each value (factor) is present in the company. It proves that Cooper Equipment Rentals needs to add a remote accessibility function in their operation as that will seamlessly enable capturing equipment hours in real-time. It will also mean faster response time to customers since predictive planning could be practiced thus enforcing proactive maintenance. Eventual improvement of machine availability, cost (maintenance) will be reduced and finally there will be automation in their operational processes.From table 15, even though there was some percentage of machine availability in 2017 as evidenced by the increase in sales figures from $4.8M to $5.8 M, a lot more revenue could be generated by reducing cost of repair and gaining more control over monitoring of their equipments on rent. Cost management exists in the company through some internal financial records shown to us (confidential records). On a whole, once Cooper Equipment Rentals decide to add these three features in their operation, it will eventually be easy to automate their system updates with real-time data smoothing-out their operational processes. Hence, after studying the whole company, the top priority values that the company should focus on that would increase their likelihood of value capturing are remote access, faster response to customers, and real-time data. This information needed to be validated as such a field testing process called the Proof of Concept was carried out collaboratively by both the Client and the Customer. The Proof of Concept is discussed below.4.3.1 Equipments used for the IoT Proof of ConceptThree skid-steer construction equipments were used for the testing process and details shown below: i. John Deere Skid Steer (JD 329 D) – 2010-015 Serial # 37253541. ii. John Deere Skid Steer (JD 323 D) – 2010-018 Serial # 33191441. iii. Bobcat Skid Steer (T650) – 2010- 050 Serial # 33187741. Figure 15: Three skid-steer equipments used for the proof of concept testing.126.96.36.199 Proof of concept test results on three rental equipmentsAfter outlining the values (remote access, faster response to customers, and real-time data) to prioritize to enable Cooper Equipment Rentals capture value and stay competitive, SMatEquip configured the data analytics software (Predix) and synchronised it with the customer’s CRM system through collaborative efforts to enable a real-time remote data transmission and updates. A collaborative seven-day proof of concept testing was carried out between the client and Cooper Equipment Rentals with three of their skid-steer equipments whiles units were on rent. The testing process involved using feedback received during the testing, modifying to suit customer needs. Seven skid-steer equipments were rented out that week i.e. 18th to 24nd June 2018, out of which three was under testing by installing IoT devices for data analytic. The other four were without these devices. Two out of the four unmonitored equipments broke down (hard breakdown) and could not be repaired onsite. There were several operator abuse conditions and fault codes detected during testing and through data analytics on the Predix platform, quick decisions were taken to prevent a breakdown. For example, the three monitored equipments had no “hard breakdown” and by “hard breakdown” I mean, equipment not being able to be repaired on-site. All four-service request we had were detected earlier and a proactive plan was put in place to do the repair work before any hard breakdown could happen.The implementation of IoT into the customer’s operation reduced a traditional five out of seven equipment (skid-steer) breakdowns to two in a week’s rental. This goes to show that, having the remote access capability to these equipments whilst they were running on site helped SMatEquip through the predictive software to acquire real-time equipment data to plan proactively and make better business decisions to save money, time and inconveniences. That is the whole logic of SMatEquip’s product solution i.e. transforming businesses from a reactive mode of operation to a proactive business. Thus, installing this IoT offering on all units could bring the number down to Zero. The customer feedback and results proved positive and showed the effectiveness of adding a remote-access capability value to their operation.However, for SMatEquip to develop superior value proposition to the Customer, we kept these key values (remote access, faster response to customers, and real-time data) in mind to formulate a unique value proposition for Cooper Equipment Rentals to help them make and save money and be competitive. This is discussed below.188.8.131.52 Value proposition formulationTo develop a superior value proposition that will meet all the needs of our Customer, Cooper Equipment Rentals, and other stakeholders, we had to decide on the type of value proposition to be offered first. As described earlier in chapter 2, out of the three types of value propositions, the Resonating focus value proposition was chosen based on these three factors (remote access, faster response to customers, and real-time data) and it being able to answer our question: “what unique value proposition can SMatEquip offer its customer that creates a new value demand and makes them competitive?”.Resonating focus was chosen for this study because first and foremost, the Client Company has extensive knowledge of how the market operates, hence can deliver superior value to customers, compared with next best alternative. Secondly, the value proposition to be delivered will create a new value demand, and open a great chance for expansion in the near future.Finally, resonating focus value proposition comparatively is superior and most effective type of value proposition to ensure value capturing by the customer. Having that in mind, SMatEquip went ahead to apply the four key steps in the Customer discovery method by Blank (2005), to develop a value proposition for Cooper equipment Rentals. The four activities in the development process were:1. Stating SMatEquip’s hypothesis for Cooper Equip Rentals.2. Testing hypotheses stated.3. Collaborating with Cooper Equipment Rentals to test product concept and 4. Evaluating customer feedback ; setting next steps.Figure 16 : Customer discovery Framework to develop Cooper Equipment Rentals’ value proposition (source: Modified from Blank, 2005).1. Stating SMatEquip’s hypotheses for Cooper Equip RentalsThis activity is important to help any start-up such as SMatEquip to form a robust customer development model. The purpose of this process was to ensure that SMatEquip’s product solution was directed toward the most valuable customer for growth. The hypotheses statement was: If equipment availability is related to better predictions for planning, then SMatEquip’s remote access capability for real-time data in the Customer’s operation will result in faster response to customers to keep the equipments running.It entailed six subsets of factors that needed to be documented, namely: 1.1 Product concept – Our product concept was testing, modifying and iterating using customer feedback to develop the product solution to meet the customer need. This process basically functioned through collaboration and had a “feedback loop” concept. This process involved continuously interacting with Cooper Equipment Rentals for their feedback and vis-versa.1.2 Customers and the problems they want to solve – This step involved documentation of the target customer, Cooper Equipment Rentals. A day-in-the-life summary approach was used to describe conditions before and after our target customer agreed to pilot our product solution. Our customer was an end-user which helped during the testing/verification phase. The problem we solved was a Customers inability to get real-time equipment health (data) whilst units were on rent. Knowing this at the onset problem kept us focused on our strategies to resolve the problem. By employing a remote-access capability, we could acquire real-time equipment health (data) to make useful predictions.1.3 Distribution and pricing – Distribution was necessary for getting SMatEquip’s product solution into our customers’ hands. A smart and efficient distribution strategy was necessary for success as such we delivered our solution by our physical presence and this was a source of competitive advantage. SMatEquip’s distribution strategy was to offer the pilot phase free through a sponsorship by General Electric Digital Solutions, Canada. The current pricing was for the purchase of the IoT plug and play devices. A well-structured pricing model would be done later after a formal acceptance of our value proposition. The pricing model was out of scope in this project.Demand creation – The demand is high as there are many benefits associated with the implementation of our product solution. SMatEquip’s solution is a new trending market demand that will grow quickly in the next 5years according to Gartner’s hype cycle (Gartner, 2017).1.4 Market type – The current market type is the equipment rental industry who are primarily end users. Our solution being niche in the market currently will provide a long-term value for SMatEquip.1.5 Competition – This market is new currently and our current competitors are Sierra Wireless and Nero global tracking. These two companies are mostly specialized in automotive (light and heavy trucks) and have no coverage in the equipment rental sector. SMatEquip has a competitive advantage to win more customers in the equipment rental sector due to their experience and approach.2. Testing problem’s hypotheses – The testing process involved these steps, namely:2. 3. 4. Figure 17: Hypotheses testing stages (Source: Modified from Blank, 2005).The first step was that, SMatEquip tapped into its network by networking and connecting with colleagues, professional groups and employee friends of Cooper Equipment Rentals to populate a list of potential customers to test our hypotheses with. This was not an easy search but through some friends and colleagues, I was able to connect with a management team member of Cooper Equipment Rentals. They invited me to pitch my idea and agreed to test SMatEquip’s hypotheses if we could provide a reliable used case and product support. Even though we were an early stage start-up with no customer yet, our key idea (remote access capability) and strategies were reasonable for a try. Cooper Equipment Rentals also agreed because they accepted having a problem, they are searching for a solution and finally had access to a budget to purchase a solution. The goal was not to sell but to get an opportunity to test, learn and gather as much information and feedback as possible to be able to validate our hypotheses.Secondly, SMatEquip made a presentation of the problem, by applying all the three prioritized values from our analysis in the previous section: remote access capability, faster response to customers and real-time data and the hypotheses in activity 1 into our presentation. The goal was to develop an explicitly clear presentation based on SMatEquip’s hypotheses about Cooper Equipment Rentals and their problems for a feedback. Anther reason was to find the severity of their problems and obtain information that differs from SMatEquip’s view. The third step helped SMatEquip to gain insights from the customer by capitalizing on the interactions with ecosystem players in the rental market. We acquired an in-depth knowledge about their businesses and future opportunities through questions that were beyond their problems. An example: who their likely users would be of your solution, and who the likely buyers would be of your solution and so on. Some insights gained gave me a new perspective of how SMatEquip could make money in sectors using our tools, skills and expertise.Finally, SMatEquip mapped the market infrastructure by engaging in conferences and trade shows to gain a better understanding of the environment and its players. Avenues were found to talk to potential competitors dominant in the market to find out trends of the market and potential users. The interaction with potential customers served as a channel to gather more information to update our hypotheses for our Customer’s challenge.3. Testing product conceptThis third activity involved three stages and described below.Figure 18: Concept testing stages. (Source: Modified from Blank, 2005).By this stage, SMatEquip had acquired enough information and feedback to thoroughly understand the problem and the type of market space Cooper Equipment Rentals operate to find a best solution fit. This informed the decision to test and qualify the product concept of choosing the most effective out of the three values proposed. The customer, Cooper Equipment Rentals, collaboratively with the Client in this project chose remote access capability as the value needed to enable them capture value. The value chosen had interconnections with the other two values i.e. faster response to customers and real-time data, as such was prudent to focus on that. Insights gathered by SMatEquip was then applied to the hypotheses to get a further understanding if the remote access capability implemented was heading in the right direction or not. This step involved a lot of teamwork to eliminate communication gaps and missing out on useful information. A team discussion was held to discuss the implications to our customer, the problem statement, product hypothesis and product specifications to determine if the solution is a partial fit for the customers’ problems. Modifications to features on remote access ; user interface design selection were done and a new updated presentation prepared for customer feedback. This feedback was shared with the team members and retested through several collaborative sessions to draft the product requirement document. The sales, revenue plan and the business ; product plan and the minimum viable product were out of scope in this project and as such not discussed. 4. Evaluating and setting next steps The final stage involved weighing customer feedback gathered in activities two and three to find out if remote access capability solves the customer problem. We had two misfits and hence made two iterations of solution validation (that is, activities 2 and 3) until we had the best fit that was a customised remote access capability that matched up to customer’s exact need. Customer expressed his satisfaction to the solution.SMatEquip then condensed all information gathered and generated a simple, clear and succinct value proposition of a remote access capability for Cooper Equipment Rentals. Figure 16, illustrates the four activities carried out to develop the value proposition development.SMatEquip’s value proposition of a remote access capability to Cooper Equipment Rentals. Figure 19: Remote access interconnection logic with other values and benefits derived at each stage.From figure 19 above, it can be see that all six values that were results of our interview process in table 14, were all interconnected. The remote access capability will give our Customer the ability to get real-time equipment health (data) to make better and informed predictions. These predictions will inform a better planning process that will drive Cooper Equipment Rental service staff to respond to their end-users faster. Thus, gaining the trust and loyalty from their end-users which will eventually bring more money to the business. If the service team of Cooper Equipment Rentals responds to service calls quickly, this action will lead to equipments always being available for end-users to rent i.e. equipment availability. The benefit here is that, it creates a sense of reliability and all end-users will see you as being dependable and would want to always do business with. A high machine availability influences the likelihood of more equipment renting, thus more revenue would be generated and the cost of repairs will significantly be reduced.The final link was the automation of all rental processes. Since the predictive software had an equipment zoning capability, it could update the stock list to the CRM (customer relationship manager) of the Customer without any human effort. This smoothened out most of their processes and solved most of the pain they had to put up with to operate.184.108.40.206 Lessons learned1. You must learn to dance with your customer, step-by-step in the co-creation process. They’re the eventual judges of the value created.2. Keep communication of value proposition simple and concise stating clear benefits and associated cost for each stage. 3. Each step in collaborating with the customer takes you closer to your goal, but the next step is not necessarily any better than the previous one.4. Having an open mind to understand the problem at stake and the Customer’s business goals will help you connect better in the collaboration process.5. Product development does not always require evolving from one step into another and it is okay to stop or even go back.4.4 SummaryChapter 4 presented a description of the collaboration process SMatEquip took to formulate a value proposition for its customer. It began by examining literature on value proposition development and the application of IIoT. After examination and drafting some questions from the literature, some experienced individuals were identified to take part in an informal interview process, stating clearly their roles, years of experience and companies as shown in table 12, and that formed section 4.1.The next section 4.2, presented the first deliverable and how it was produced. The collaboration process was vividly explained to show how a startup co-create with a large customer to develop its product. Results to questions asked were outlined to helped find out in order of importance the most prioritized values present in most of the responses from participants. The results from these interviews elicited six values most prioritized in the equipment rental industry i.e. remote access, faster response to customers, real-time data, machine availability, cost and automation of product and operational processes.In section 4.3, Cooper Equipment Rentals was studied and the aim was to find out which of the values outlined in table 14 was present in the company and those absent or needs to be focused on. This section further explained the top priority values that the company needs to focus on to increase the likelihood of value capturing. These values were remote-access, faster response to customers and real-time data. To validate our theoretical findings, a proof of concept testing was conducted to ascertain our findings. Our findings proofed that Cooper Equipment Rentals needed to include a remote access capability into their operation to capture all the values created in table 14 and be competitive. The proof of concept test showed that, there is an interconnection between all six values outlined in table 14 and the remote access capability is the driver for all values to be achieved, hence the need to integrate that feature into their operation. A value proposition was then formulated based on the theory and practical testing done with the customer. Lessons learned from the collaboration process with Cooper Equipment Rentals were then outlined. The final section 4.4, describes the summary of the chapter.5 DISCUSSIONSIn this chapter, results obtained from Chapter 4 are discussed. The first section discusses the results after conducting interviews with employees of Cooper Equipment Rentals and the link between values prioritized. The second section discusses results of the value proposition formulation by SMatEquip’s to their customer and providing them with recommendations.5.1 Dominant values after the interviewAfter interviewing all twenty (20) individuals both employees and non-employees of Cooper Equipment Rentals, the six (6) values that stood out clearly in order of most prioritized were; remote access, faster response to customers, real-time data, machine availability, cost and automation of product and operational processes as shown in below.Order of Priority Color Code Values (factors) to consider1st Remote Access.2nd Faster response to customers3rd Real –time data.4th Machine availability5th Cost6th Automation of product and operational processesTable 14: Outline in order of priority of most important factors in value creation.Further to this, a study was done in collaboration with Cooper Equipment Rentals to narrow down on the values they need most in their portfolio. Results after studying the company showed that, they had none of the first three values outlined above.ie. remote access, faster response to customer and real-time data. The results after studying the company are shown below: The Customer needed these three (3) values out of the six to be able to achieve their goals and solve their problem. After a further probe by SmatEquip, it was observed that, the last two (2) values. i.e. faster response to customers and real-time data, could all be realized of a remote access capability was implemented first. To prove this theory and validate our findings, a collaborative proof of concept testing was done with three (3) rental equipments i.e. Skid-steers, provided by Cooper Equipment Rentals. Results after a week’s testing with other four (4) unmonitored equipments by Cooper Equipment Rentals, showed that even though the three (3) monitored equipments had some faults, these faults were detected earlier and remedies found to prevent them from breaking down on site. Two (2) out of the other four (4) equipments broke down without being able to be fix on site. They needed to be replaced entirely by the customer with another machinery. The results proved that, having this predictive analytics function over time could zero-in on the number of equipments that breaks down in the customer’s fleet. The traditional breakdowns per week was five (5) out of seven (7) equipments. In our proof of concept week, the customer only had two (2) unmonitored equipments out of the seven (7) rented. This proved that SMatEquip’s remote capability function was essential for Cooper Equipment Rentals to realize these values. A remote access had a link with the others since it will offer real-time data for better predictions to be able to respond faster to customers since you see what happens in real time to equipments before they even breakdown.5.2 SMatEquip’s value proposition formulation for Cooper Equipment Rentals.Customer collaboration was the key factor that helped us to formulate a value proposition for our customer. It helped SMatEquip to see through the lens of the customer to understand their problem and the solution that best fits their need. Also, solutions were mapped with reference to their business goals. This act was important as the customer was the judge of the value created. A detailed step by step process was undertaken with the customer starting with choosing the Resonating focus value proposition type for our project as it offered the benefits needed by our customer and it was also found to be the superior among the rest. After that, Blanks (2005) customer discovery framework was used to formulate our value proposition as shown in figure 16 in chapter 4. This involved a four step process.ie. stating SMatEquip’s hypothesis for Cooper Equip Rentals, testing hypotheses stated, collaborating with Cooper Equipment Rentals to test product concept and evaluating customer feedback ; setting next steps.After following through with all four processes, modifying, iterating and redesigning, customer feedback on the value proposed was gathered and weighed to see if it resolves the problem. Upon getting a positive feedback from the customer, SMatEquip then condensed all information gathered and generated a simple, clear and succinct value proposition of a remote access capability function for Cooper Equipment Rentals. SMatEquip’s remote access value proposition is illustrated below in figure 20:Figure 20: SMatEquip’s remote access capability function with a logical link to other values Cooper Equipment Rentals stands to derive.6 CONCLUSIONS, LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH This chapter presents the project conclusions, limitations and suggestions for future research. 6.1 Conclusions There are exciting times approaching the equipment rental industry as more technological means are now being used to gather data to make tasks easy to perform. The objective of this study was to develop SMatEquip’s value proposition for an existing equipment rental company that operates Canada-wide. This study qualitatively identified from literature, important questions to ask when finding values most prioritized by rental companies, to increase the likelihood of value capturing. This was then followed by an informal interview process involving some selected twenty (20) participants well vexed in the equipment rental industry.ie. Supervisors, Service Engineers, Managers and Key Customers. Thus, data collection from different sources both employees and non-employees of Cooper Equipment Rentals enabled us to have sufficient stakeholder perspectives and aided in the triangulation of the study.A comprehensive collaboration process between the Customer and Client was done to better understand the problem, solution and business goals of the Customer. Moving step by step with the Customer in the product solution development ensured some degree of acceptance. Six factors (values) were identified by the interviewees and outlined in order of priority. Then the customer, Cooper Equipment Rentals was studied to find out which of those values were present in their current operation. After studying the Cooper Equipment Rentals, it was found that there are three factors (values) that the Customer should adopt and focus on to ensure value capturing and be competitive. These are remote access capability, faster response to customers and real-time data. The first value was a remote access capability function, which was found out to be the driver and link to the other values. As such the need for Cooper Equipment Rentals to channel more resources to and implement that functionality into their portfolio to realize all the benefits of the other values. The company should also ensure that they communicate any further enhancements to the Client Company’s product solution even after using it. Product development is an on-going process and doesn’t end after product launch. This project was conducted by following the same logical link between the conceptual framework, current state analysis and the value proposition building process thus establishing a clear logical continuum throughout the project. The reliability of this study was ensured by firstly linking the findings, solutions and interpretations to the data collected and secondly by documenting these findings, solutions and interpretations during the data collection stages. Thirdly, reliability was assured by collaborating and documenting the study with enough transparency so that any start-up company could replicate this process. Finally, it has been ensured by the researcher himself taking a neutral stand throughout the project despite his key insider status to the Customer.All in all, through the conducted research on this project, it is possible to state that technological implementation (i.e. adoption of IoT and data analytics) in equipment rental companies can create competitive advantage and reduce the number of unsafe acts in the equipment rental environment.6.2 Limitations Though this study successfully achieved its objective and met the evaluation criteria such as relevance of the study, validity and reliability, the following limitations is worth noting. The study had a small sample size. Twenty (20) interviewees were used as the sample size of the study to find out the most important factors (values) to prioritize to increase the likelihood of value capturing by an equipment rental company. The study could have considered a larger sample size to assure more visibility in the results. The second limitation was the time span. Due to the limited time, a smaller sample size was used and testing equipments with the customer for equipment data could only be done for a week, thus the short time didn’t help form a firm base for the assessment of results. The last limitation was the research approach. The informal interview approach used in this study didn’t offer SMatEquip enough room and authority to dive deeper into other company portfolios to compare results.6.3 Suggestions for future research From a global point of view, it is suggested that this study should be replicated in other countries, particularly in West Africa where a lot of machinery are used for gold mining and oil & gas operations. This is to verify the extent to which findings reached in this study are consistent with other geographical locations. It is also suggested that further research should be done using a larger population size to have a more rigid sample result. 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The Journal of Marketing, 52(3), 2–22.Appendix 1: Interview ResultsTo be able to create a unique value proposition for Cooper Equipment Rentals, preference was given to their employees and a detailed interview documentation was done since they were SMatEquip’s early buyer and as such knew the values they needed to achieve their business goals. The other participants were then grouped and a summary of most common trends documented. Supervisor 1’s response (Cooper equipment Rentals)Supervisor 1Question No. Response Summary of Interview1 • Manual equipment updating in CRM (customer relationship manager) • Manually checking rental equipments at departure and on arrival. • Had a face-to-face 30 minutes interview at the premises of Cooper Equip. Rentals at lunch break.• He had issues on equipment zoning and stockist checks, especially in winter. Manual process used now. He visually used diagrams to explain the processes he goes through to get equipments updated on his list.• He wants an integration of a new technology with the CRM system to automatically update and send notifications to him via email or text messages.• He welcomed any technology to make his work easier and bring added benefits to his team.2 Have a device to interact directly with the equipments remotely from my office. 3 We use a login and out sheet for data collection throughout the day. 4 All we have is GPS location and estimated machine hours. 5 Fatigue from manual process and inaccurate data (human errors) 6 Location 7 Cannot tell. Not previewed to that information 8 Ability to know when equipment arrives and leaves remotely. 9 Non 10 Remote access. 11 Non Service Supervisor 2’s response (Cooper equipment Rentals)Service Supervisor 2Question No. Response Summary of Interview1 No access to equipments on rents • Had a video 25 minutes interview with him as he had travelled to Kingston for training.• He was very passionate about knowing how units on rent are being used as he said most defects were through operators abuse of machines due to lack of training. However, he had no evidence to support his claim whilst units are on the rental site. They only get that information on the return of the units and are mostly contested by their customers. • He also said that even though there a genuine cases of material failure, having a technology that wold help in proactive maintenance would save a lot of money• He wants a technology that can remotely inform him of such acts when the units are working on site.2 Have a device to remotely monitor equipments on rent. 3 We wait for a service call and dispatch technicians. 4 GPS location, fault codes and estimated machine hours. 5 No dedicated person/system to monitor equipments on rent. 6 Location and estimated hours. 7 ~ $ 170K 8 Ability remotely monitor and control equipments. Alternatively, even shut them down when customer extends their contract but do not pay on time. 9 Manual equipment hours tracking 10 Remote access and online diagnostics with explanations and solutions to diagnosis. 11 Non Workshop Supervisor 3’s response (Cooper equipment Rentals)Workshop Supervisor 3Question No. Response Summary of Interview1 No access to real time monitoring data. • He agreed to have a 30 munities face-to-face interview with me at Cooper Equipment Rentals.• He indicated how they fail equipments assessed for rents due to reactive maintenance. “Due to our current practice of reactive maintenance, most equipments come to the workshop severely damaged and we change thousands of dollars worth of parts”.• He went further to elaborate on the need to get a system/technology to detect problems earlier and diagnose to make quick assessments and business decisions. 2 Have a device to monitor equipments on rent in real-time to ensure a proactive approach is used in managing equipments. 3 We randomly change parts based on instincts to avoid them breaking down. This on a whole is not cost effective. 4 We connect to equipment when they arrive in the shop via data links to read fault codes. 5 Likely inactive fault codes might be corrupted. Data link do not always connect. 6 Active fault codes. 7 ~ $ 290K 8 Ability remotely monitor and control equipments. Alternatively, even shut them down when customer extends his contract but does not pay on time. 9 Equipment repair fire fighting for next rental. 10 Remote access for real time data and online diagnostics. 11 Non Technician Supervisor 4’s response (Cooper equipment Rentals)Technician Supervisor 4Question No. Response Summary of Interview1 No access to real time equipment status. • A brief face-to-face interview was conducted but very precise. We had a 25 minutes discussion and due to his many years of experience coupled with his vast knowledge base, made it simple to find solutions to the problems.• He began by emphasising on the need for his employer to shift to adopting a technology to monitor their fleet. He gave an instance where three equipments were simultaneously faulty and down for two weeks. “That was bad for business”, he said. • “Having an IoT device installed will enable us the technicians discover and repair faults faster. It will also help us do less paperwork and concentrate on the repair process” he exhaled. 2 • Install IoT device to enable technicians to discover and repair faults faster. • Technology will also enable easy accountability of parts used, equipment used on and easy work order processing. 3 We change parts when equipments break down. (as and when basis) 4 We connect our data links to troubleshoot. However, it does not always work. 5 If the data link does not connect, we use our experience mostly. Trial and error. 6 Active and inactive fault codes. 7 Not previewed to such information. 8 • Ability monitor equipments in a live mode. • Ability to diagnose online, predict faulty parts, produce parts list for warehouse picking of parts for us to repair. 9 Non 10 • Real time control and monitoring of the machines. • Ability for machine to tell us what to repair and were to locate faulty parts for replacement. 11 Non Branch Manager 1’s response (Cooper equipment Rentals)Branch Manager 1Question No. Response Summary of Interview1 No access to real time equipment data and manual processes for renting. • He was very difficult to get for an interview but managed to book and have a 30 minutes telephone interview with him.• He touched on the need to have a bird-view about the “health” of his fleet and needed to reduce the waste. He said the company needed a service improvement and adopting this technology with a team he is familiar with will go a long way to help him realise some profit and reduce the current stretch on his team. • He was willing to offer three equipments for a proof of concept testing.• You could deduce from his reposes that he was frustrated but the current rental practises and mode of operation, as he could not account for profit to his stakeholders.• He however did not hesitate to identify two factors that could hinder them adopting to IoT.Cost price – Even though there is a budget for the idea, the cost of adoption must be reasonably priced. A formal value proposition offering has not yet been proposed to them.2 Leveraging technology for timely predictions and control of equipments in real-time for quick business decisions. 3 Reactive maintenance and experience based planning. 4 GPS location and average equipment hours 5 Timeliness and human errors in data collection and analysis. 6 Average equipment hours, active and inactive fault codes. 7 $ 523K (2017) from both field service and workshop. 8 • Offer remote access operation function to customers who need it for blasting operations to reduce injuries. 9 Manual processes 10 • Real time control and monitoring of the machines. • Ability to use technology make maintenance projections. 11 Non Response’s from other Branch Managers of the participantsOther Branch ManagersQuestion No. Summary of Responses Summary of Interviews1 No real-time remote access to equipments. • They were interviewed separately for 30 and 25 minutes respectively via face-to-face at separate locations. • One of the managers said management had once discussed this issue but they were not enforced due to some financial constraints at that time. He was open to discuss with solution to management.• He further explained the need and the benefits they would derive from having real-time data. He ended the discussion stating three key factors we ought to consider when bringing this idea into the rental industry. i.e. Cost of product, service support and the security of data.• The second manager interviewed was quite brief and straight to the point. His first concern was cost and security of data.• He again, hinted the first value he would like to see is gaining remote access of equipments when on rent. In addition, he explained installing cameras on the units to give some visuals would be cool to have.• He acknowledged the immerse benefits out proposal would offer to the rental industry and said he is willing to take SmatEquip’s solution for a trial if we could offer him with a good value proposition. 2 By using new technology to help us gain remote, access of equipments in real-time. 3 We have planning tools but they are not that effective and forces us to do reactive maintenance at times. 4 GPS location and average equipment hours 5 Human errors in data collection and delays in maintenance. 6 Average equipment hours, active and inactive fault codes. 7 Cannot give you the exact figure but on average between $ 210-250K a year (both Managers gave figures in this range). 8 • Offer remote access. 9 Manual processes 10 • Real time access and monitoring of the machines. • Ability to use technology make maintenance projections. 11 Non Response’s from Service Engineers Service EngineersQuestion No. Summary of Responses Summary of Interviews1 Inability to get real-time data on equipments. • Interviews lasted on average between 25-27 minutes with the Service Engineers at multiple locations but mostly with their work locations. • The consensus was that there are no proper tools and systems put in place to analyze rental equipments. • They also agreed that IoT use would bring immerse benefits to the rental industry and welcomed to embrace the offer.• They also touched on the point of real time data, which will help them make some informed decisions on warranty machines before they break down. 2 By using IoT technology to gain real-time access to equipments. 3 We use service bulletins and manuals to make decisions on the maintenance. Which is just an ideal way but not a realistic and cost-effective way to manage equipments. 4 GPS location and average equipment hours 5 Human errors in data collection and analysis. 6 Average equipment hours, active and inactive fault codes. 7 Not previewed to figures. 8 • Offer remote access. 9 Manual processes 10 Real time access and monitoring of the machines. 11 Non Response’s from Key Customers Key CustomersQuestion No. Summary of Responses Summary of Interviews1 Downtime of equipments. • Interviews lasted on average between 25-35 minutes with these key customers at multiple locations.• They each agreed of the non-availability of real-time data on rental equipments and rely on the traditional way of operation.• The consensus was that there should be tools to gather real-time data, analyze and make accurate predictions so equipments do not breakdown and affect their project schedules.• Five out of the eight customers vouched to only rent from the rental company who adopts this kind of technological advancement in their business. As there would be less likelihood of downtimes and eve if there should be one, measures would have been put in place to reduce the turn around time for a replacement.• They also touched on the point of real time data, which will help them make some informed decisions on warranty machines before they break down. 2 By using IoT technology to gain real-time access for timely predictions of equipments. 3 We call the rental companies when the equipment breaks down. 4 GPS location and average equipment hours 5 Human errors (operator) in data collection of hours. 6 Average equipment hours. 7 Do not know. 8 Offer remote access control of equipments for blasting works. 9 Non 10 Real time access for predictions. 11 Non