Learnings

How can innovative Design Thinking improve Energy-as-a-Service (EaaS) business models?

Learnings
23 March 2022

How are you reading this article? On your smartphone, tablet or on your computer? Or maybe you even printed this article if you like to read on paper. Chances are, you are reading this article however, whenever and wherever it suits you. And that convenience is exactly what we as consumers expect today.

So why would this love for freedom in consumption be any different if it comes down to choosing and managing our energy needs? Stretch Innovation answers this question in this blog article, by deep diving into how innovative Design Thinking can improve Energy-as-a-Service (EaaS) related business models.

Give me solutions!

As a result of the emerging digitalization, consumers are exploring more than ever new ways of optimizing their energy consumption and better managing their energy cost. Who does not want to save upon its monthly energy bill, right?

In addition, to meet energy-related needs, consumers are looking for new ways of generating sustainable energy. In addition, innovative energy applications are developing at top speed, which makes it hard for consumers to keep track of all the possibilities. Curious about all those innovative energy approaches? Read our other blog article about innovative business models in the transforming energy market!

However, nobody likes complexity. Same goes for the energy market, as only a few people truly understand the working of innovative energy technologies and their impact. One of the most recent business models in the industry, Energy-as-a-Service (EaaS), provides a solution to both the upcoming consumer needs, as the need to reduce complexity. EaaS is a transformative business model, as it works hands-on.

As a matter of fact, Energy-as-a-Service (EaaS) as a business model is nothing new. Namely, it is an adaptation of its well-known bigger brother Software-as-a-Service (SaaS). Nevertheless, it is the application of such a business model in the energy sector, that makes it the new kid in town. EaaS is an innovative business model, in which Energy Service Providers (ESP) offer numerous energy-related services, rather than only supplying electricity. For example, Energy Savings as a Service (ESaaS), Lightning as a Service (LaaS) and Heating as a Service (HaaS). Want to read more into EaaS examples? Take a look at our blog article about innovative energy business models.

The “new” kid in town: the Energy-as-a-Service business model

The question is, how can energy companies ride the wave of those changing consumer needs with EaaS? Part of the solution lies in the principles of Design Thinking.

Phase 1: Research & emphasize

Design Thinking is a customer-based approach, which is often used in innovation strategy. This process starts from a design point-of-view, meaning that you create the space to let human-centered thinking flourish. Design Thinking operates by integrating the needs of consumers, the technological possibilities and the requirements for the business to be successful.

We at Stretch Innovation are practically addicted to Design Thinking, as this process draws on lateral (or sideways) thinking to trigger creativity. Nowadays, innovation leaders are aware of the latest technologies, but often lack thorough understanding of their most valuable asset - their customers.

This is exactly where Design Thinking kicks in, as it assists innovation leaders to solve their customers’ problems in a structured way. And that is also exactly why it is extremely useful to make Energy-as-a-Service business models a more widespread solution to transforming consumer needs and to reduce complexity in the energy market. You are probably thinking “This all sounds wonderful, but how can we actually apply Design Thinking in our business?”, well we have broken it down for you in 4 hands-on iterative phases.

Phase 2: Define

Innovation leaders need to understand customer realities throughout every phase of the process and must phase into customers’ shoes to really understand what their customers are thinking, feeling and doing. Additionally, innovators need to understand their customers’ goals and challenges. Customer research is key to this first phase because it helps uncover these conscious—and sometimes unconscious—drivers of customer behavior. The biggest pitfall here is to solely rely on your own experiences without adding a more outside perspective.

Phase 3: Ideate & Prototype

Next, the innovation opportunity has to be identified, based on the input of customers from the empathize phase: their opinion, needs and insights. Needless to say, it can take time to really pin down the right framing. The final product of this second phase only exists out of a simple sentence or two. For example, “How can we create a solution to help Peter, a senior who lives by himself, to address his interest in smart energy technology. Peter does not really understand why smart energy meters exists, but he is really concerned about the rising energy costs.”

Going the extra mile by using Design Thinking

A brainstorm should take place, together with innovation leaders and experts, based on the defined problem from the previous phase.  

We at Stretch Innovation use cross-industry information transfer exercises to consider how non-energy companies delivered outstanding customer experiences and how that can be applied to the problem of consumers. We believe that involving industry experts of the company itself can give us a coherent image of the possible solution. Next, we host an intense brainstorming session to stimulate ideas that we can use to find a solution that hits the sweet spot of customer desirability, technical feasibility and business viability.  

The Design Thinking techniques that can be used in this phase are structured notes, crazy 8’s, mutation games or any other relevant ideation techniques. A possible outcome of this phase is the following ideation:
“Peter could benefit from an integrated energy service offering smart devices that monitor and manage energy assets and optimize their usage and thus cost.”

What follows is an experimental approach, in which the innovative solution is identified. In this phase the actual prototypes, scaled-down versions of the product, are produced at low-cost. Next, you can test how users behave with the prototype, discover new solutions and assess if the implemented solutions are successful.

Get out of the house!

Finally, the solution pitch is presented to others for feedback. This could be to other internal stakeholders who have gone through the first phase based on feedback. Additionally, the storyboard can be iterated (and retested, if necessary) to make sure there is a solid offering that meets the target customer’s needs.

Iterative, not lineair

When it comes to Design Thinking, it is very important to note that this is an iterative process, not a linear one. Meaning that it Design Thinking flows from one phase to another and back.

Learnings

How can innovative Design Thinking improve Energy-as-a-Service (EaaS) business models?

Learnings
23 March 2022
How can innovative Design Thinking improve Energy-as-a-Service (EaaS) business models?

How are you reading this article? On your smartphone, tablet or on your computer? Or maybe you even printed this article if you like to read on paper. Chances are, you are reading this article however, whenever and wherever it suits you. And that convenience is exactly what we as consumers expect today.

So why would this love for freedom in consumption be any different if it comes down to choosing and managing our energy needs? Stretch Innovation answers this question in this blog article, by deep diving into how innovative Design Thinking can improve Energy-as-a-Service (EaaS) related business models.

Give me solutions!

As a result of the emerging digitalization, consumers are exploring more than ever new ways of optimizing their energy consumption and better managing their energy cost. Who does not want to save upon its monthly energy bill, right?

In addition, to meet energy-related needs, consumers are looking for new ways of generating sustainable energy. In addition, innovative energy applications are developing at top speed, which makes it hard for consumers to keep track of all the possibilities. Curious about all those innovative energy approaches? Read our other blog article about innovative business models in the transforming energy market!

However, nobody likes complexity. Same goes for the energy market, as only a few people truly understand the working of innovative energy technologies and their impact. One of the most recent business models in the industry, Energy-as-a-Service (EaaS), provides a solution to both the upcoming consumer needs, as the need to reduce complexity. EaaS is a transformative business model, as it works hands-on.

The “new” kid in town: the Energy-as-a-Service business model

As a matter of fact, Energy-as-a-Service (EaaS) as a business model is nothing new. Namely, it is an adaptation of its well-known bigger brother Software-as-a-Service (SaaS). Nevertheless, it is the application of such a business model in the energy sector, that makes it the new kid in town. EaaS is an innovative business model, in which Energy Service Providers (ESP) offer numerous energy-related services, rather than only supplying electricity. For example, Energy Savings as a Service (ESaaS), Lightning as a Service (LaaS) and Heating as a Service (HaaS). Want to read more into EaaS examples? Take a look at our blog article about innovative energy business models.

How can innovative Design Thinking improve Energy-as-a-Service (EaaS) business models?

The question is, how can energy companies ride the wave of those changing consumer needs with EaaS? Part of the solution lies in the principles of Design Thinking.

Going the extra mile by using Design Thinking

Design Thinking is a customer-based approach, which is often used in innovation strategy. This process starts from a design point-of-view, meaning that you create the space to let human-centered thinking flourish. Design Thinking operates by integrating the needs of consumers, the technological possibilities and the requirements for the business to be successful.

We at Stretch Innovation are practically addicted to Design Thinking, as this process draws on lateral (or sideways) thinking to trigger creativity. Nowadays, innovation leaders are aware of the latest technologies, but often lack thorough understanding of their most valuable asset - their customers.

This is exactly where Design Thinking kicks in, as it assists innovation leaders to solve their customers’ problems in a structured way. And that is also exactly why it is extremely useful to make Energy-as-a-Service business models a more widespread solution to transforming consumer needs and to reduce complexity in the energy market. You are probably thinking “This all sounds wonderful, but how can we actually apply Design Thinking in our business?”, well we have broken it down for you in 4 hands-on iterative phases.

How can innovative Design Thinking improve Energy-as-a-Service (EaaS) business models?

Phase 1: Research & emphasize

Innovation leaders need to understand customer realities throughout every phase of the process and must phase into customers’ shoes to really understand what their customers are thinking, feeling and doing. Additionally, innovators need to understand their customers’ goals and challenges. Customer research is key to this first phase because it helps uncover these conscious—and sometimes unconscious—drivers of customer behavior. The biggest pitfall here is to solely rely on your own experiences without adding a more outside perspective.

Phase 2: Define

Next, the innovation opportunity has to be identified, based on the input of customers from the empathize phase: their opinion, needs and insights. Needless to say, it can take time to really pin down the right framing. The final product of this second phase only exists out of a simple sentence or two. For example, “How can we create a solution to help Peter, a senior who lives by himself, to address his interest in smart energy technology. Peter does not really understand why smart energy meters exists, but he is really concerned about the rising energy costs.”

Phase 3: Ideate & Prototype

A brainstorm should take place, together with innovation leaders and experts, based on the defined problem from the previous phase.  

We at Stretch Innovation use cross-industry information transfer exercises to consider how non-energy companies delivered outstanding customer experiences and how that can be applied to the problem of consumers. We believe that involving industry experts of the company itself can give us a coherent image of the possible solution. Next, we host an intense brainstorming session to stimulate ideas that we can use to find a solution that hits the sweet spot of customer desirability, technical feasibility and business viability.  

The Design Thinking techniques that can be used in this phase are structured notes, crazy 8’s, mutation games or any other relevant ideation techniques. A possible outcome of this phase is the following ideation:
“Peter could benefit from an integrated energy service offering smart devices that monitor and manage energy assets and optimize their usage and thus cost.”

What follows is an experimental approach, in which the innovative solution is identified. In this phase the actual prototypes, scaled-down versions of the product, are produced at low-cost. Next, you can test how users behave with the prototype, discover new solutions and assess if the implemented solutions are successful.

Phase 4: Test, Test, Test

Finally, the solution pitch is presented to others for feedback. This could be to other internal stakeholders who have gone through the first phase based on feedback. Additionally, the storyboard can be iterated (and retested, if necessary) to make sure there is a solid offering that meets the target customer’s needs.

Iterative, not lineair

When it comes to Design Thinking, it is very important to note that this is an iterative process, not a linear one. Meaning that it Design Thinking flows from one phase to another and back.

Get out of the house!

Once the innovative solution created with Design Thinking is mapped, qualitative validation should be gathered from target users. This could be done through small-focus groups - with prototypes, Minimum Viable Product (MVP), mockups - or in some cases in-depth interviews.  

Do you want to explore what Design Thinking methodologies can do for your business or do you want to discover more about the Energy-as-a-Service possibilities, do not hesitate to get in touch with us!

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Learnings

How can innovative Design Thinking improve Energy-as-a-Service (EaaS) business models?

Learnings
23 March 2022

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