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Universitè di Grenoble – Rintracciofacile è una Case Study

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Universitè di Grenoble – Rintracciofacile è una Case Study

Innovation Through Design Individual Assignment” è il titolo dell progetto studio dove Rintracciofacile.it è case study.
Grazie a una intervista a Victor Khaireddin, CEO di Rintracciofacile.it sono stati evidenziati gli elementi di innovazione che hanno portato Rintracciofacile.it ad esseere il 1° player di settore dopo 1 anno dallo startup.

Ringraziamo Leopoldo Trontelj e Grenoble Ecole de Management per la gentile autorizzazione alla pubblicazione.

1. General key success and failure factors when designing a new product or service

There is a concept in Innovation Management called Innovation Funnel: meaning that few innovations succeed to effectively become marketable innovative products. It is estimated that from 3000 raw ideas just 125 manage to become projects, and from these project only 1 idea manage to become a successfully launched product.
Everett Rogers defines five characteristics or key success factors that an innovation needs to have in order to get accepted by the customers:

  • Relative Advantage: how improved an innovation is over the previous generation.
  • Compatibility: the level of compatibility that an innovation has with individual’s life
  • Complexity/Simplicity: individuals are unlikely to adopt the innovation if it is complicated or difficult to use.
  • Trialability: how easily an innovation may be experimented.
  • Observability: the extent that an innovation is visible to others.

Other factors that influence the diffusion of an innovation are the characteristics of potential adopters, the communication process, and the institutional & social context: individual versus organisational adopters, structural & psychological segmentation, social & professional networks, role of opinion leaders / celebrities / testimonials.

As underlined by Keith Pavitt the most common causes of innovation failures are organizational problems, specially coordination and control. Between the external issues we find competition and cognition.

Other elements that may determine the failure of an innovation launched on market are the perceived risks from the customer point of view:

  • Financial risk: present and futures expenditures that the customer needs to support to adopt a new product
  • Operational risk: the risk that a new product may not work
  • Physical risk: threat for consumer’s safety
  • Social risk: social disapproval because of the adoption of the new product
  • Psychological risk: fear to make a mistake in purchasing the new product
  • Waste of time risk: buying a new product implies a lot of research to compare the different offers
  • Opportunity risk: not adopting the best possible offer

2. Overview of the company and its place in the industry

The group IREC S.r.l. works in the field of debt collection, credit management, and asset investigation, and it’s specialized in the market of Italian SME’s. It’s therefore working to help small and medium companies and professionals to get back problematic credits in Italy and abroad in exchange of a “success fee”.

Organizational Structure
The group IREC S.r.l. has a functional organizational structure formed by four departments: Administration and Finance, Customer Relationship Management, IT, and Marketing Management. The group has a controlled company, Rintracciofacile.it, which is responsible of the asset investigation activity. The workforce of the company consists in 32 employees.

Market Analysis
The industry of debt collection in Italy is quite concentrated in few main players which manage big volumes of credits, typically from banks and public utilities. The three main companies in the Italian debit collection industry are CRIBIS, from CRIF Group; Cerved Group S.p.A.; and Firecredit. Anyhow, these companies are big players with key main accounts who don’t compete directly with IREC, which targets SME’s.

Customer Analysis
The customers of the company consist in a great number of SME’s for the activity of debt collection, while for the activity of asset investigation the customers are divided between law firms and other debt collection companies. Law firms pay the asset investigation service to IREC in a B2B perspective in order to carry out the activity of debt collection for their clients. Between these companies there are some of the main accounts of IREC, which are “Studio Bonelli Rede” and “Studio Lipani Catricalà & Partners”, which account for around the 80% of the asset investigation business volume. The other 20% is distributed between the other debt collection and investigation companies. Some key accounts between them are “Credit Safe Italia” and “Cevid investigazioni”.

Unique Value Proposition (UVP) and Key Differentiator Factors
The Unique Value Proposition of IREC can be identified in the personal relationship that the company is able to build with its clients and that differentiate it from the main players of the market. Another key differentiator factor of the company is its attention to IT innovation and to web accessibility, well represented in the company by the e-commerce platform of Rintracciofacile.it, recently founded by the owner of the company Victor Khaireddin, which represent an innovation in terms of usability and transparency uncommon for the industry of asset investigations

3. Interview with the owner Victor Khaireddin and transcript of the interview

Leopoldo Trontelj: Mr. Khaireddin, could you please talk us about the innovation of “Rintracciofacile.it” which you recently introduced in your company?

Victor Khaireddin: Rintracciofacile.it is a company I founded in September 2018 as controlled company of IREC S.r.l., it is the business unit in charge of managing the asset investigation activity for companies, law firms and other debt collection enterprises. It represents a radical innovation in the industry of asset investigation, being the first e-commerce platform in this market.

Leopoldo Trontelj: How did you came out with the idea of Rintracciofacile.it?

Victor Khaireddin: The asset investigation market is often perceived as an obscure and mysterious world, where to get information you need to pay private investigator and tell them everything about your story, your problems and your objectives. I found my self in the same situation when working in the activity of debt collection, which is the core business of my company and requires the asset investigation service; so I came out with the idea of building a platform to internalize the process and at the same time provide a service to customers which could make the activity of asset investigation easier. The result was the launch of the e-commerce platform Rintracciofacile.it, which with the help of technological tools allows customers to analyse the financial situation of debtors online in a fast, easy and transparent way.

Leopoldo Trontelj: So, this innovation represents for IREC also a key differentiator element from the competition, right? Were you the first player in the market to adopt this innovation?

Victor Khaireddin: Exactly, the transparency and the usability of the platform is a key differentiator element for my company in the market of asset investigation, improving the customer experience for more and more tech savvy clients. We were the first to use this kind of technology in the market, and this is giving us a remarkable competitive advantage toward our competitors. Some players in the market are now starting to adopt similar systems, but we were the first movers.

Leopoldo Trontelj: Tell us about the e-commerce platform usability, how does Rintracciofacile.it works?

Victor Khaireddin: It is very easy to use. It is an open source platform where customers can buy asset investigation and pay by credit card or bank transfer. We tried to simplify as much as we could the customer experience by making the customer journey completely online. Even the final delivery of the asset investigation consists in a pdf file which can be downloaded online. In case of any difficulties, the customer can call the customer-service and receive a quick service recovery action. We also recently introduced a chat-bot called Sherlock, that helps the customer to navigate the website and select the product by chat. Technology is at the centre of this innovation.

Leopoldo Trontelj: Which have been the main difficulties encountered in the adoption of this innovation?

Victor Khaireddin: One first order of difficulties has been in the field of technology. Since Rintracciofacile.it was built from 0 and there weren’t previous cases in the market, the IT department completely internally build up all the software and internal process on which the platform works out. The technological development has been so long, but we were so excited of the innovation, that we start promoting the service in business fairs even before it was ready! To let you understand how much it have been a long process, made of continuous improvements.
Another order of difficulties has been of financial nature, because we developed the platform and its promotion with a 100% owned equity. Everything we earned was reinvested in technical improvements and promotion activity.

Leopoldo Trontelj: Have you encountered any organizational difficulties? How did the employees react to the introduction of the innovation?

Victor Khaireddin: Yes, absolutely, that of the organization has been one of the main issues when we launched Rintracciofacile.it. In facts, before the platform, we had an asset investigation department that used to do the job in an old fashion. One of the main problems has been to train our employees in order to get this innovation accepted: make them used to the fact that now orders comes with a simple email, asset investigations have to be processed and drafted online, and the service has to be sent to the client entirely via internet. These changings have costed in terms of human resources training costs and time.

Leopoldo Trontelj: What about the customers, did they perceived the innovation as risky, too far from the usual practices, or were they well disposed toward it?

Victor Khaireddin: As all the market innovations, at the beginning it was looked at with a mixture of suspicion and curiosity, especially because we work in the market of services and not in that of physical goods, where something as an online sales platform is more widely accepted in the present times, and the customer service is not that fundamental as it is in the service market; anyhow, when the customers started to see how the new platform was easy to use, they quickly got used to it and it is now becoming more and more accepted even in our sector. We have nowadays a solid customer base of around 5000 lawyers all around Italy, so we can affirm that the innovation has resulted quite successful.

Leopoldo Trontelj: What about you as entrepreneur, where you worried of a possible market failure when adopting the innovation, how did you personally face the innovation risk?

Victor Khaireddin: There’s no entrepreneur which is not worried about a market failure, especially when launching an innovation never tested before in a certain industry; nonetheless, there is the need of continuing the innovation process without fear, with the hope that the market will appreciate what you realize.

Leopoldo Trontelj: What do you think is the key success factor in the innovation process?

Victor Khaireddin: The key success factor of the innovation process in my opinion is to solve problems with solutions. You will always find difficulties when realizing something new, the difference is made when you are able to find solution to your problems without the fear of innovating.

Leopoldo Trontelj: Do you see any risks that may come from this innovation?

Victor Khaireddin: If I had to think about a risk that may come from this innovation is that the increasing digitalization could make me lose the human relationship with the customer base. I think that one of the main future challenges for service entrepreneurs in the Digital Revolution will be to keep a strong interpersonal relation with the customers, this will become a more and more important differentiator factor from the competition.

Leopoldo Trontelj: Do you see future opportunities and possible developments of this innovation?

Victor Khaireddin: I don’t see at the moment any new future developments of the e-commerce platform because it is already working so well, I can say that for the philosophy that distinguish our group we will continue listening to the stimulus coming from the market in an optic of continuous improvement, without stopping our innovation process.

4. Analysis, discussion and lessons learnt.

The innovation of Rintracciofacile.it introduced by IREC S.r.l. seems to be a successful innovation for the company. It allowed its owner to save costs by internalizing the activity of asset investigation and at the same time it opened new markets. We can define it as Vertical Integration strategy with the scope of capturing downstream profits. Another clear advantage is that the innovation allowed the company to extend its market from a local to a national dimension. This is an advantage not only in terms of revenues, but also in terms of brand awareness. Considering that the company has been a first mover in the industry of we can deduce that it managed to realize a Blue Ocean Strategy and it’s right now getting extra revenues from its first mover advantage position.
The innovation seems to have met the Everett Roger’s 5 Characteristics of the successful innovation. In terms or Relative Advantage, we have seen that an e-commerce platform is a completely new tool in the asset investigation industry. From the side of Compatibility, being our society more and more digitalized, the transition of this business on the online seems not only to be possible, but necessary. On the other hand, we could say that not all the customer of this market may be willing to use a 100% online service and may continue to prefer traditional channels. Regarding the element of Complexity, the website has a good usability, but not all the customers in the target may be able to use properly the informatic channel. For what concern the Trialability, in facts there where no way for the company to experiment the innovation before the launch, being the first mover in the industry. On this point we can affirm that the owner took all the risk on the initiative. Regarding the Observability, there is a Marketing department in charge of the advertising and communication activity which is quite active.

It is our opinion that the company has been able to overcome the Organizational Problem, outlined by Keith Pavitt, with adequate expenses on the training of human resources, that allowed the employees to successfully bridge the knowledge gap.

Personally, I’ve really appreciated the initiative of the company to build up this innovation, and I think that the innovation process has been led properly. I’ve always perceived the entrepreneurship as a risky activity to avoid, also for the merciless statistics that we are used to read in the faculties of Business Management about failing entrepreneurial initiatives; all the more so if we talk about innovation, with the concept of the Innovation Funnel. In this case instead I must admit that the case study made me look at the innovation process from another perspective. Hearing about the innovation process as a normal route, with common problems that need to be solved to proceed on the way, made me look at the phenomenon with more trust.

It is our opinion that the company has been able to overcome the Organizational Problem, outlined by Keith Pavitt, with adequate expenses on the training of human resources, that allowed the employees to successfully bridge the knowledge gap.

Personally, I’ve really appreciated the initiative of the company to build up this innovation, and I think that the innovation process has been led properly. I’ve always perceived the entrepreneurship as a risky activity to avoid, also for the merciless statistics that we are used to read in the faculties of Business Management about failing entrepreneurial initiatives; all the more so if we talk about innovation, with the concept of the Innovation Funnel. In this case instead I must admit that the case study made me look at the innovation process from another perspective. Hearing about the innovation process as a normal route, with common problems that need to be solved to proceed on the way, made me look at the phenomenon with more trust.

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