INNOWATER Introduction to Business Proposition Toolkit July 2013

Overview of INNOWATER 2 INNOWATER is an innovation partnership of public innovation agencies, water associations, technology specialists, innovation experts and eco- innovative cluster organisations from Belgium, Cyprus, Denmark, the Netherlands, Spain and the UK, coordinated by the European Water Partnership (EWP); The overall objective of INNOWATER is to establish and implement a water innovation partnership that develops and tests new and better support tools and delivery mechanisms for innovative SMEs and first user industries; A priority for the project is facilitating the market transition of innovative products and services; A three year project, started in Feb 2010; pilot testing of tools from Sept 2011.

Seven key challenges facing innovators 3 1.Scientific Isolation – resulting from poor communication, cooperation and collaboration between market and innovators; 2.Lack of Research Funding - specifically investment from end users; 3.Technology Push Paradigm – innovators often fail to generate market intelligence and to define end users’ economic, regulatory, and risk profiles; as a result it is difficult to define differentiating USP; 4.Proof of Performance Paradox – a lack of understanding of key routes to market and procurement processes leads to difficulty in convincing end users to test new technology, and act as champions; 5.Inadequate Entrepreneurship Capabilities - including market insights; 6.ROI and Risk Reduction Trap – it is difficult to convince end users with risk averse purchasing policies to adopt new technologies; 7.Lack of Sustainable Finance - linked to the lack of a compelling business case.

INNOWATER aims to bridge the gap Barriers relating to the lack of sector knowledge, difficulty in articulating the economic justification, and perceived risk to the end user. 4 SME Innovator Industrial End user Barriers relating to the lack of understanding of end user needs (commercial, technical and operational) and procurement behaviour Market facing toolkits

Defining a Business Model – the Missing Link 5 Success requires the right technology, skilled resources, and the most appropriate “business model”; Few entrepreneurs have an appreciation of the complexity involved; The water sector is a mature and relatively risk averse market, with a well established supply chain, raising specific challenges And making the need for a compelling value proposition critical. A “business model” defines the manner by which the business enterprise delivers value to customers, entices customers to pay for the value, and converts those payments to profit. In other words it should reflect what customers want, how they want it, and how an enterprise can organize to best meet those needs.

The Business Proposition Toolkit (BPT) 6 The BPT is a business support framework that assists innovating SMEs within the water sector in the articulation of a robust value proposition and the formulation of an appropriate business model to meet the needs of the end user markets. Consultant’s Manual INNOWATER Web Portal Unit Summaries & Data Collection work books 1.Business Model Overview 2.Capability Assessment 3.Action Plan Outputs

Role of the INNOWATER Web Portal 7 Developed as an information resource to be used alongside the BPT – available to both Consultant and SME during development; Purpose to provide Pan European, sector specific intelligence to: Provide evidence to inform the decision making process Act as a prompt to support idea generation Signpost to suitable third party sources and networks; Provides sector specific Case Studies of successful business models; To become a ‘living’ document, continually updated on the basis of intelligence gained through the delivery of the BPT.

The BPT is a consultant led process 8 Role of Consultant: To facilitate, coach and challenge the SME in development of content for/ completion of the BPT Signpost to appropriate sources of third party data/networks/contacts; Review quality of outputs at key points; Provide feedback on the process for future development. Role of SME: To generate primary supporting data and evidence; Complete the Work Sheets; Ownership and ‘sign off’ of the outputs; Provide feedback on the process (and performance of the Consultant) for future development.

The Overall Process 9

The core of the BPT is divided into units 10 The interrelationship between units is not linear – it is an interactive and iterative process with on- going feedback; The consultants will agree with the SME where effort should be focused; Completed over a period of several lapsed weeks, as evidence is gathered to support decision making.

Output automatically generated by the Unit Summaries work book 11 Example

What’s in it for the SME? 12 1.One-to-one support from a specialist business consultant, trained in the delivery of the BPT and with access to the supporting collateral; 2.Development of a validated business model, with robust supporting evidence, specific to their needs; 3.An Action Plan providing priority next steps, and associated resources, to ensure that the business model is progressed, implemented, and refined as appropriate; 4.An understanding of any key gaps in current delivery capability; 5.Improved knowledge of, and access to, a variety of sector specific resources and contacts.