In some situations using a non-standard solution may have governmental, technical, process based, financial or other commercial competitive advantages. This route works great if you have the time, money, and resources to develop, maintain, and support a ‘home-grown’ innovation. Certainly an organization can maximize that investment by patenting the solution and then seeking possible revenue through licensing for years to come. But for many, using non-standard solutions comes with bigger risks.
Taking a non-standard approach can be too much of a risk for a business, its stock holders, and its customers. In many cases, the process of creation and innovation is full of failures and repeated attempts, until the “right” solution is found. The act of creating something new and non-standard can take years and come with a significant price tag as the solution evolves from an idea, to prototype, then proof of concept, proof of solution, and finally, production. Upon entrance to the market as a product, the traditional product life cycle of service, support, and new updates to keep the solution viable takes over, exposing even more risk.
Regardless of what line of business you are in, you are surrounded by standards. Standards reduce the amount of time, money, and resources one must apply in building (or buying) a solution, maintaining it, and supporting it over the long life cycle of a product.
In customer-centric businesses, like retail, the focus is generally on reducing costs and having solutions that are affordable, easy-to-maintain, have the ability to integrate with other back-end solutions, and have long road maps. This minimizes risk, and provides low cost solutions that allow a retailer to focus on what they know best: delivering outstanding customer service and fostering greater loyalty.
Innovation and Non-standards Can be Game Changers
History is full of world and game changing solutions. In retail, innovations include bar codes, self checkouts, mobile shopping, loyalty programs, NFC, RFID, and ZigBee solutions. Generally these innovations were created and brought to the business by technology companies who had the ability to support the innovation process. These solution providers also had the market to support the product lifecycle by selling the solution to any customer that wanted it. For those early adopters of the solution there was a competitive advantage. However, since retail is a highly competitive business all retailers must purchase and deploy the winning solutions to keep pace with their competitors. In time, the solutions become common and standard.
Standards are Very Important
Standards provide for a solution to be produced in large quantity with a robust supply chain, and a wider variety of support channels. They are supported by a large ecosystem of companies that ensures greater innovation and competitive pricing. They also enable compliance and ease of audit in regards to the massive (and growing) number of government regulations. In essence, standards are efficient, safe, portable (sharing), compliant, supportable, and lower cost through sales competition. All of this ultimately benefits the end consumer.
Standards Benefit Two Groups
The consumer: Flexibility and interoperability of solutions can make consumer lives and shopping experiences easier and less stressful. Flexibility gives consumers a broad choice of offerings with the comfort that what they buy and own is safe, a good value, will be around for long period, and doesn’t require a lot of effort to use. For example, a customer in a retail shop that wants to use a mobile device doesn’t care about how everything works, but they do care that they can shop easily, quickly, and in a secure manner that protects their privacy. If every retailer had a different device, different application, or different process, consumers would quickly determine the easiest solution. At a grocery store, this could be a return to the old fashioned manual and fully staffed check-out lane that does not save time or money. With standards, a consumer can use technology that they can trust as safe, of good quality, and reliable, technology that empowers them with confidence that they are in control, not the store.
Businesses: They can rely on suppliers to develop, offer, service, and maintain products that are accepted across their industry regardless of region. Standards also give the business the opportunity to deploy new products quickly when compared against a ‘home-grown’ innovation or proprietary solutions. For suppliers, standards businesses the opportunity to transition between suppliers in the event that one may go out of business, stop providing that particular product, or the business simply is looking for a better price or service level. Standards also eliminate potentially costly education, training, and support methods. A unique product may be cool, but if you have to spend a lot of time supporting, training and retraining employees and customers, you can quickly eat up any profit margin the ‘home-grown’ product brings. Standards allow businesses to focus on competing for, servicing, and retaining customers.
Standards Matter Because…
A good example of this is ZigBee Smart Energy. This standard grew from an idea to a way to securely monitor and manage energy use across a home, city or geographic area to ensure the availability of power in the future. This low power, low cost, highly secure standard is now in the market as a global standard, supported by hundreds of companies, utilities and regulators. Plus the standard has been installed at millions of homes around the globe. ZigBee Smart Energy is growing rapidly as more governments support it, and as customers want more ways to save money, gain control of their energy and be a bit more green by using a variety of products and tools that they can access from within the home or remotely via the Internet.
Standards may be considered inflexible to some, but when implemented correctly, they hit all the points that businesses strive for every day, including earning, retaining, and growing their customer base. Standards can achieve these points because they’re safe, secure, reliable, rigorously tested and are economical solutions that reduce research and development costs. Eventually standards become commonplace and, perhaps, even taken for granted because of their efficiency and popularity, allowing business to focus on other innovations.