The importance of software innovationThe Trapeze Team | November 11, 2015
One of the key challenges facing Local Authorities in the UK is ensuring that the suppliers of their IT systems are able and willing to innovate over the full length of any tendered contracts. This is especially true in the realm of real-time passenger information (RTPI), where lack of innovation equals technology stagnation and ultimately reduced appetite for bus travel.
The importance of innovation in general is well understood, of course. Organisations recognise that failure to innovate damages efficiency, creating extra, unnecessary work for staff, and making working processes unduly complicated. Furthermore, a survey by PwC of CEOs from firms around the world found that innovation was ranked as the number one priority by the majority of business leaders.
But, of course, it’s one thing for an organisation to claim it promotes innovation – and quite another for firms to follow through with it and actively strive to innovate constantly over the length of a business contract. It’s the classic ‘actions speak louder than words’ trope.
For Local Authorities embarking on contract tendering processes, discerning which organisations are likely to follow through and provide innovative solutions to the IT challenges they face and which are not, is an absolutely critical task. But it’s not necessarily an easy one.
In this article we’ll discuss what we think are important features Local Authorities should look for during tendering processes for new IT systems, such as RTPI software, with the hope this will help these organisations select the best partner for their operation.
Software for life
When it comes to innovation strategies, it is important that suppliers adopt a ‘Software for Life’ model. This specifically means that a percentage of the maintenance associated with a given product must be reinvested back into the product’s development.
Such a strategy of reinvestment is often forgone by organisations in favour of maximising profit, but this can of course prove counterproductive. Indeed, as this article in The Business Place points out, making the choice to reinvest profits supports growth: “In the long-term, the business is healthier […] and the rewards will be far greater.”
Yet within this model, it’s also important to be able to differentiate between those software firms that reinvest simply for the sake of reinvesting – and those that target and prioritise reinvestment to product areas in line with customer feedback and industry trends. Such a focus is endorsed in this article by Gaebler Ventures, which reminds us to “focus on the value of expenditure […] do not invest on factors that do not have long term value.”
A supplier truly willing to support innovation of any product over the length of a contract would be able to evidence cases where they have taken on customer feedback and redirected investment to specific product areas in line with client suggestions . Such a smart approach to targeted innovation is more likely to ensure future product developments are truly innovative, and ensure the software never becomes stale.
Special Interest Groups (SIGs)
The ability to add additional modules to a core software product is important, since it can provide functionality specific to the needs of certain organisations – but not others. For Local Authorities searching for a real-time system, for example, with the capacity to exchange additional information with a UTMC system, may not find such functionality among a supplier’s core system. However, innovative suppliers will be able to add this functionality through the addition of a new module.
To ensure new modules work, quality development and software engineering is critical. Innovative suppliers will form Special Interest Groups (SIGs): groups of customers who want a new module and are willing to help the supplier develop it. The key role customers play in product development here means that they are able to essentially tailor new software tools to meet their specific needs. Thus, they receive the products they want and need, and which are also highly relevant to the changing face of the industry.
Alongside participation in SIGs – where customers will receive the module at a largely discounted rate after development has finished – companies like Trapeze also look to involve customers in product planning through User Groups and conferences, where developers are able to interact closely with customers to understand their needs, aims and objectives – which can thus inform product strategy.
Such approaches to module development provides a mutually beneficial outcome to suppliers and customers. Customers are able to directly influence development priorities – both in terms of what modules are developed, as well as specific functionality of each module. The software supplier, meanwhile, gains priceless insight into which areas deserve investment of R&D budgets – as well as the knowledge that all innovative work carried out is to the benefit of customers.
Mitigating against risk
When it comes to innovation, it can be tempting to try too much. This might seem an odd thing to suggest, considering the clear risk of innovating too little. However, if both supplier and customer encourage each other to abandon tried and tested methods in favour of pursuing out and out innovation, there is a high risk that cost inefficiencies can occur, or technologies pursued that are rapidly overtaken and become outdated.
As a means of illustrating the potential dangers of innovating too much, look at research by a collection of US universities into Formula One racing teams which found that those teams that tried to innovate the most often don’t reap any benefit for their efforts and usually weren’t the most successful on the racetrack.
“We found that it wasn’t always good to be the aggressive innovator,” said Jaideep Anand, one of the lead researchers from Ohio State University. “The most successful teams made incremental changes that gave them the benefit of marginal gains without disturbing all the other parts of the system.”
Applied to our industry, the lesson here is that in order for Local Authorities to mitigate against the risks of innovating too much, it’s important to work with a supplier that understands the difference between smart innovation and innovation for innovation’s sake.
To do this, first clarify that a supplier has extensive industry expertise, which can be brought to bear to establish the true value of new methods and technologies. This experience, and the knowledge of industry experts and thought leaders, will ensure development and innovation only takes place as and when – and where – it is needed. This avoids the risk of too much innovation, while ensuring your organisation isn’t left far behind on the racetrack.
As we’ve already alluded to, it’s all very well for a supplier to claim to be innovative, and quite another for them to actually be willing to innovate over the course of any agreed contract. In order to ensure you work with a truly innovative supplier, it’s important to see evidence and examples of innovations introduced by the supplier to their products.
As one such example, Trapeze recognised early on that, when it came to traffic light pre-emption technology, the move away from PMR to GPRS/3G provided a means of changing current approaches to that area. The company participated in an industry initiative to develop an XML standard (RTIG-T031) in conjunction with the UTMC providers for sending traffic light pre-emption requests via the back office. This significantly reduced the cost of deploying TLP, since it removed the need for in-vehicle radio technology, and for road-side receivers.
Examples of such ‘Eureka’ moments should be easy to come by for genuinely innovative suppliers, keen to provide effective solutions to previously difficult challenges or issues.
Of course, for any length of contract, Local Authorities require suppliers who will not accidentally stumble upon answers to challenges; but instead be consistently available to offer expertise to guide and maintain the software product to ensure it remains cutting edge.
Innovation is, after all, a discipline. Your supplier must possess the capacity for innovation required to ensure there are ‘Eureka’ moments for the full duration of any contract . Such consistent innovation will ensure your systems are maintained cost effectively; run efficiently; and remain at the forefront of industry technology throughout the lifetime of the project.