Ever wonder what the sharing economy, used by businesses like eBay, Uber, Airbnb, might mean to the Engineering Services Industry? If not, it should be on your radar. The fact is that similar business models are beginning to appear in our engineering industry, and they are picking up momentum.
The majority of successful ‘sharing economy’ businesses are in the P2P (Peer-to-Peer) or B2C (Business-to-Consumer) markets. The success in the P2P and B2C space has been realized because many people are looking for good deals with a desire to avoid the expensive and wasteful middlemen in their daily lives. The wide use of P2P and B2C services has created a willingness within society to extend this model further, into B2B (Business-to-Business) markets.
The B2B Opportunity for Engineering Companies
At the heart of all sharing economies is the desire to remove waste associated with underutilized resources. For businesses, this means capitalizing on underutilized resources to provide others with access to them. Often overlooked are a company’s intangible assets, i.e. brainpower, knowledge, and intellectual capital. An example is the intellectual property and associated design deliverables for capital projects. After significant investment and upon completion of construction activities, the designs associated with capital projects are often shelved, never to be used again.
The real potential is for new platforms to evolve that allow companies to offer their design deliverables and intellectual property on a global scale, so that others may use them, while permitting the owner to profit from each sale/license transaction.
Many industries, including the North American oil & gas and municipal sectors are engineering-intensive and amass huge stockpiles of designs. In Canada alone, engineering services is a $28B industry. Globally it is a $1T industry. Of this, a very small percentage of designs are ever re-used. Rather, future projects are normally forced to ‘start from scratch’. In the end, hoarding of such designs results in time spent ‘reinventing the wheel’, thus impeding innovation and technical advancements. A very wasteful practice indeed, ripe for an innovative solution.
Most of today’s capital projects fully leverage digital designs, design transfer and modifications to suit the needs of future projects, making it is easier than ever. The time has come to stop hoarding engineering designs.
The Challenges to Overcome
An initial observation is that the widely used term “sharing economy” may be hindering progress. Although the term is simply semantics, the word ‘sharing’ generally implies that a party gives something away for free to another party. This technicality may be overlooked by consumers who are happy to get what they want at a fair price. However, businesses and their decision-makers have fiscal responsibilities and may be thrown off by the word “sharing” as it implies free. In fact, any proposed solution must be fair and equitable to all parties involved.
The concept of sharing vs. access is further explored in a recent Harvard Business Review post, The Sharing Economy Isn’t About Sharing at All. Thus, it’s beneficial to consider the use of terminology such as “Access Economy” instead of “Sharing Economy” for B2B applications.
Mature industries with a track record of ‘this is how things are done’ indeed pose challenges when it comes to embracing new approaches to business. However, it is the early adopters that experience the greatest benefits from successfully conducting business in new ways. Others also benefit, but don’t often realize the full advantages gained by the early adopters.
The good news is as the B2B markets continue to evolve, there’s profit to be had. In this case by sharing resources that would otherwise go unused.
The Sharing Has Begun
As individuals realize the high value in using P2P and B2C services in their personal lives, it cannot be overlooked that these same individuals desire similar offerings in their day-to-day work.
Businesses have begun to embrace B2C services that employees now use in their daily work activities. Examples include Uber, Car2Go or AirBnB which all provide significant benefits and cost savings to businesses when employees need to travel, whether it be around their city or abroad. Another great example is iStockPhoto where business can easily, quickly and affordably obtain stock images, illustrations and videos to support marketing activities.
Recently, B2B online platforms have emerged that focus directly on industrial markets. It is now feasible for companies to share large raw materials/equipment, distribution infrastructure, and other capital costs. Some examples of successful, progressive B2B focused offerings include:
AnyQuip – Canada’s peer-to-peer equipment rental and sales marketplace. Companies connect on AnyQuip to get underutilized heavy equipment to work in every industry – rent, buy or sell.
Ahoy Employ – Helping companies find the best recruiter with a solid reputation and willing to work within your budget.
IronHub – Delivers the service and the technology to better capture, communicate, and capitalize on your oilfield inventory. Includes a slick digital marketplace to monetize excess inventory.
All of these examples have successfully targeted a new age of waste reduction. It is up to the engineering and business communities to determine the future of sharing / access by honestly evaluating the added value to their business and industry.