Market Obsolescence

Obsolescence is a by product of the market experimentation that must be recognized, accepted and reconciled by the participants as a real an looming outcome of the drive to experiment within the market and especially the supply chain. Experimentation produces both new features and functionality to push the market forward and also elimination or obsolescence of existing or previous capabilities that are not longer necessary or relevant. This obsolescence must be accounted for in the process in order to ensure that the portfolio of services and capabilities remain current and provide value. This effort to specifically identify obsolescence is important to the vitality and support requirements for the market participants to eliminate the support for obsolete services and functionality. The continued support of obsolete services and capabilities will place a drag on the ability to experiment and move forward.





Every experiment will potentially create an obsolete process or function and this must be recognized and taken into account and planned as part of the process. The effort and impact to the business increases with each obsolete process or function that is not retired and eliminated. Elimination of the obsolete functions and services must be a key part of the experimentation process because of the overhead required for ongoing maintenance and support. Planned obsolescence is an important practice in the market from a maintenance and value perspective. The value of the improvements realized from experiments will be quickly overwhelmed if the obsolete functions and processes are not retired.





Planning and executing obsolete service retirement is not the fun, or sexy, part of the experimental improvements proces, however it is an important part of the process to ensure the function and service catalog is appropriately maintained and services and functions are bringing value. The costs of maintaining obsolete functions and services will quickly escalate to overwhelm benefits of the improvements realized from improvements realized through experimentation.





In addition to the increased maintenance and support costs, the obsolete functions and services also impact and delay the realization of improvements from experiments, in other words, working around obsolete functions impacts the complexity and delays the delivery of experiments because of the effort to work around the obsolete functions. Eliminating the obsolete functions improves the velocity of change through experimentation. Google is a great example of eliminating obsolete services and functions. They regularly announce the retirement of functions and services that have outlived their useful lifespan and the value added capabilities are provided through new services or functions that have been created as a result of experiments.





The challenge for many of the partners is recognizing and accepting the obsolescence of services, features and functionality and most importantly eliminating the obsolete items. This can be especially challenging when you are focused on responding to change in the market. This challenge must be rationalized and prioritized through the realization of the potential impact to the partner in the event that the obsolescence is ignored. The weight of obsolete services, features and functionality will become overwhelming in the event that they are not retired and this challenge comes down to the focus; it is too easy to walk away and ignore because of the demands of the changing market.

Market Experimentation

It is abundantly clear from the industry leader practices that a key aspect of success is the practice of experimentation. This practice has become necessary to confirm demands of the consumer and other partners within the extended supply chain. Data and analytics will take you so far in responding to the demands of the marketplace and then the final clarification and confirmation requires experimentation as part of the continuous improvement process. In fact, the experimentation is a critical piece of the continuous improvement process and these leaders in industry are extending the continuous improvement practice to the the business decision process. This is an important factor in the ability to sense and respond to changing demands, the reaction to change must utilize the continuous improvement process to test validity of process and change in meeting the market demands.




The growth and importance of experimentation in clarification and implementation of change is a reaction to both the velocity of change and the almost overwhelming cost of bad decisions in the model of increased velocity of change. There are really two factors involved in the increase in experimentation:


The velocity of change and the amount of data available to help the market to sense and respond to change is increasing. First the velocity of change has reached a tempo of discontinuous velocity that requires continuous evaluation and re-evaluation. While the volume of data available has increased exponentially with the growth of omni channel commerce the analytics can take you so far and then the final steps require a series of trial and error experiments.


The cost of change has increased to a level that almost prohibits very large change. This means that the change must be coordinated and executed in steps that allow for validation and corrections prior as part of the change delivery cycle.

These are important factors to encourage and expand the level of experimentation.




When the market partners reach of level of capabilities to segregate the back office planning and forecasting and financial systems from the customer and partner facing capabilities to allow for change in the customer and partner facing applications to be implemented efficiently and without significant change to the back office operations then the model of experimentation can really take the center stage. This takes significant investment from the retailers and an especially large investment from the larger retailers. Unfortunately for the retailers, they must perform both activities at the same time in order to continue to succeed. Amazon and Google both excel at these activities as they have built the foundation with the concept of integration and segregation to reduce effort and impact of change on their back office and both us experimentation as a foundation function in their activities.




One of the lasting effects from Amazon is their practice of experimentation and willingness to drop a concept when it does not succeed. This impact of this practice is the market of discontinuous change and increased velocity of change. Others must also embrace this practice now in order to survive and this can be very tough for the large retailers. The initial reaction was to acquire operational capabilities and now these retailers much change their culture and framework to support quick an iterative change to react to the demands of the market.

Velocity of Failure

The twin to the velocity of change is the velocity of failure and these two opposite actions are closely related and end up driving each other in increasing discontinuous cycles. These are increasingly related and a failure to meet the velocity of change will surely increase the velocity of failure but meeting the velocity of change can also increase failure as well. The challenge in meeting these demands is the knowledge of insight and direction of the change. The challenge to obtaining the knowledge is the data collection and analytics required to collect and develop the knowledge from the data. There is really no way around this challenge because the velocity and types of change will surely overrun any retailer that ignores the challenge. What we should have learned from Amazon is that change is iterative and very much a trial and error process and this must be embraced in order to succeed in change.




This is no time to wait for the change to be identified by the industry to react and implement the change. The level and also types of change will interact and react in ways that create all new changes and the only thing that really can be predicted is that the rate of change will only increase, bringing with it an increased velocity of failure. This can be extremely intimidating for large retailers because they are not generally equipped for high velocity change and this is not their general practice. They are just coming out of a long time practice of generally waiting for the change to stabilize before responding. This practice no longer works because of the velocity of change and this is a great example of how the velocity of change increases the velocity of failure.




In order to avoid, or at least respond and change to the changes that will drive failure retailers must not only become more nimble and open to executing change and they must become increase their knowledge of the factors driving change, they must focus on the factors that will allow them to sense and respond to change. The most important aspect is the improved ability to sense the changes and then the analytics to understand how to respond. The sense practice becomes the early warning of direction and types but the most important aspect is the analytics to understand how and when to respond. The velocity of change and most importantly, the velocity and volume of data available in the marketplace has dramatically increased the velocity of failure and as the volume of data increases both the velocity of change and failure increases. Retailers, and truly all partners in the marketplace, must focus on the data and the analytics in order to sense and respond appropriately to the change.




There is an even greater change that is disrupting the marketplace now; the change that is important today can be the failure of tomorrow. This is probably the greatest marketplace disruption factor. Amazon is probably the best example of the velocity of change and change experiments to understand the marketplace. Amazon is continuously implementing change as a means to experiment and better understand the market and also the potential. Google is another example from the technology and retail sector that has focused on experimentation to meet and create the marketplace. These practices should be mimicked by others to ensure their success and most importantly reaction and change to avert failure.