Digital Labs make a major contribution to the company’s success. They enable digital transformation through innovative solutions and expand the mindset. They have great influence on increasing the competitiveness of companies. How should a Digital Lab be set up to play such a role?

In recent years, technological developments have significantly strengthened each other. New frameworks such as Ionic, cloud platforms and technical innovations such as the EUV lithography-based high-performance 7 nm chip from Samsung are just a few examples.

With agile software development and methods of Design Thinking, software applications can now be realized with the greatest benefit in much shorter time. Digital Labs bundle these innovations and help companies to make processes faster and leaner, and to develop innovative offerings for their end customers. This blog is inspired by the od lab of Innogy SE in Essen.

What makes a Digital Lab extraordinary?

The knowledge of the latest technologies in software development and their application is a matter of course that many can do. The intelligent combination of all influencing factors on the success of the business makes the difference.

Fig. 1: Influence factors of a Digital Lab on the Company’s Success

With the factors shown in Figure 1, a digital lab can make a difference in a company and bring great benefits. The following selection of core competences should clarify this:

Value Proposition and Smart Offerings 

Equally through its value proposition, a digital lab can show its unique selling points. It’s about supporting the business with a product that delivers the maximum value. In the Champions League , a Digital Lab plays when it can combine, implement and develop key qualifications with customer-oriented concepts. In times of specialization and niche strategies, an End2End focus helps the customer the most. Often customers have good ideas but still have no idea about the technical realization. It’s a Lab  that can validate ideas as well as finish products. This allows it to anchor its offer in two harbors: the current demand and the potential opportunities that may generate future demand.

Consistent from MVP to Minimum Awesome Product (MAP)

An MVP is a very lightweight application that focuses only on the core functions that are really important. The MVP is often used for quick customer testing. Often the design and performance aspects are neglected. Today, the good labs rely on the MAP, colloquially “Do it right the first time!”. In prototyping, the product idea is already being tested with representative customers at the end of the first working week. The prototyping based on Jake Knapp has significant speed and quality advantages compared to MVP or Proof-of-Concept . Based on a valid backlog, a product can be developed right the first time within three months. This includes a sophisticated user experience (UX) and user interface (UI).

UX/UI – Perfect User Experience and Best Performance right from the Start 

UX/UI is more complex and more relevant to success than some think. On the one hand, it is about improving the user experience on the website through usability, logic and efficiency of the functional processes and the aesthetics of the website. Easy and intuitive operation begins with the putting into the position of the user. A successful implementation can be recognized by the duration of use and retention or the click-through rate on product websites. In the digitization of business processes, good UX/UI shows itself in the shortest possible time for case processing with simultaneous data integration into the system landscape.

Lean Operation – The Business Case must make sense

The consideration of the later workflow in the daily business of the customer is the first priority here. Even in the design sprint and prototyping stages, great importance must be attached to efficient handling in the user journey. The performance and process costs during operation must be kept in view together with the Business Product Owner. For this purpose, it is recommended to define relevant KPIs in the Design Sprint (1st working week).

Fig. 2: Alignment of a Digital Lab

Team Identity and Behaviour 

Realizing top performance is not an automatism. In order for a team to be able to achieve this in the long term, mission, value proposition and the capabilities of the team must be harmonized. Team identity and behaviour then bring it to the level that produces top performance. The word “identity” also contains the basic building block for the crucial “identification” on the basis of which identity becomes possible. Establishing this identity is a two-way approach between the business model and the individual ideas of a team member.

We speak of team identity when the whole is more than the sum of its parts. In comparison to a group of lone fighters, a team is characterised by a distinct sense of togetherness that creates added value. The thinking, feeling and acting of the team members makes the difference. This applies in particular to a Digital Lab that refers to the agile manifesto and lives self-control.

Tailored Toolbox for Every Situation 

With each application individual goals are pursued. Therefore, it is very helpful if a Digital Lab can target a large repertoire of methods that has been tried and tested with experience. This applies to the generation, validation and prototyping of ideas as well as to agile product development. This can draw on a years-rehearsed set of Backlog, Planning, Daily stand-up, Review, Retrospective, User Testing and Showcases.

Price Model 

A high method quality of a lab already leads to a lower implementation effort, e.g. by substituting unnecessary features already in the design phase. In addition, a digital lab can also lead to a cost-effective implementation through its pricing model – for example, through cooperation in the nearshore sector, as long as a complex project justifies potential communication risks.

What Use does a Digital Lab Have for the Business ?

The primary benefit is easy to describe:

  • development of an effective and slim application that is widely accepted,
  • very short realization time and low development costs through proven methods,
  • very high user-friendliness and performance,
  • full integration into the existing system landscape and consideration of operational needs,
  • coaching and training of directly involved employees. 

The business remains in competition with its competitors. Innovations and optimizations are still required. But the business can play a trump card:

The Digital Lab can be in active collaboration with the product owner of the business “Change Agent”, “Coach” or “Rule Breaker”. It can help the business sector to keep competition at a distance through digital transformation.

The development in the digitalization of companies will continue. Tell us about your experiences. This will help us with our mission to better support the in-house experts in companies.