Innovating in the satellite industry: risks and rewards

by Staff Reporter | June 10th, 2012

Dr. Phillipe Francken, vice president, risk management and innovation at SES

From risk mitigating to risk sharing, Dr Phillipe Francken of SES and Roger Franklin of Crystal Solutions weigh in on collaborative approaches to innovation and they concur that the biggest risk is not to innovate and be outpaced by other industries.

 The questions we need to address are: Why do we need to innovate, what type of innovation is relevant and how to make the innovation successful and properly manage the risks

“Insertion of new technologies in space systems is not a goal in itself, but needs to be viewed within the broader context of innovation – the ultimate objective of which is value creation,” says Dr. Phillipe Francken, vice president, risk management and innovation at SES. His responsibilities encompass various aspects of satellite and launch vehicle technical risk management, and space insurance. He has also been coordinating SES’ innovation programme since 2010. Dr. Francken believes that “successful management of innovation is a key risk management challenge”.

With Crystal Solutions’ spectrum monitoring solution, Sentry, nominated as one of the World Teleport Association’s top technologies for 2012, CEO and owner, Roger Franklin, describes the time as exciting for his company. Speaking to SatellitePro ME, Franklin explains the company’s approach to innovation thus: “Crystal Solutions’ focus on innovation stems from the close relationships we have with our customers and the deep understanding of their businesses.

“When interacting with customers, we really listen to them. We don’t stop with just what they ask about; we translate that into what they really need both now and in the future. We concentrate on building customer relationships to the point where they think of us as their problem solvers. We feel we are succeeding if they call us first when they have a problem that they don’t know how to solve.

“Many of our customers, such as FOX, ESPN, and Turner, are extremely innovative organisations, so through working with them, innovation naturally occurs. When we get our employees out at customer sites, they better understand our customers’ businesses and innovation arises out of the exchange.”

The recent spate of innovations from the US-based company is no accident, says Franklin.”There has been a specific emphasis on innovation,” affirms the erstwhile software engineer, now turned business owner and supplier of content control system technologies for the broadcast and satellite industries.

“Internally, we value and reward action, and do not punish mistakes. That is a fundamental philosophy that I believe in and perpetuate throughout the organisation. Particularly in the recent history of the company, we have focused on innovation. We have released more new products in the last 20 months at Crystal than we have in the last 20 years. It is an exciting time for the company.”

While the company gives a positive spin on mistakes, high-profile failures, according to SES’ Francken, “have durably reduced the industry’s risk appetite”. But he adds, “However, failing to innovate can also be a major risk.”

In this damned if you don’t and a (high probability of) damned if you do, Francken outlines the basic questions companies should be asking themselves before embarking on innovation – “The questions we need to address are: Why do we need to innovate, what type of innovation is relevant and how to make the innovation successful and properly manage the risks.”

Roger Franklin, CEO and owner, Crystal Solutions

Why do we need to innovate?

The ‘why’ seems fairly obvious considering that customer needs are changing. Stressing that the space industry needs to evolve and adapt in order to remain competitive, Francken says, “The terrestrial telecommunication infrastructures are evolving at a much faster pace than space infrastructures. The exponential increase in performance and cost reduction of terrestrial technologies will continue, while the satellite industry might, at the most, evolve with linear performance increase.”

We concentrate on building customer relationships to the point where they think of us as their problem solvers

The opportunity for the satellite industry according to Francken, is in the area of developing hybrid satellite-terrestrial systems. “There is a huge opportunity for satellites to be used for distribution of linear video content and/or for backhauling,” stresses Francken.

In addition to the potential for growth, there are primary strategic imperatives driving innovation.

“From the reduction of the total cost of ownership of space-based solutions and improving the flexibility of satellite payloads to face market uncertainties over a 15+ year mission life, the industry also needs to address new markets and confront the convergence between the video and data at a system level,” explains Francken.

Innovations transform internal workings of an organisation

Crystal Solutions’ Sentry was nominated in the category of Teleport Technology of the Year by WTA members for its innovative ability to make efficient use of teleport resources. While externally, the innovation is regarded as standalone initiative, Roger Franklin throws light on the need to make innovation transformative to ensure enduring success.

“We have invested a great deal in corporate-wide information systems so that the deep understanding of the customers and their networks is captured and the knowledge is transferred throughout the organisation,” responds Franklin.

As more innovation enters the company, the processes must be monitored and frequently tuned to ensure that the organisation is keeping pace with the innovations

He adds, “It is crucial that the knowledge is not confined to a sales or development silo; it must be well understood in production and service to ensure our customers have a positive experience with Crystal every time. Processes are also crucial to ensure consistent customer experiences and we focus on continual improvement of them. As more innovation enters the company, the processes must be monitored and frequently tuned to ensure that the organisation is keeping pace with the innovations. This is a challenge, and one that is well worth the effort to ensure that our customers are being well served.”

The right sort of innovation

While it is essential to innovate, with limited R&D budgets, innovation needs to focus on the right objectives. Leveraging the experience gained in SES with responsibilities in the areas of satellite and launch vehicle procurement, advanced technologies, reliability analysis and orbital mechanics, Dr. Francken outlines a blueprint of sorts for innovation.

“A proposed innovation must address identified strategic needs. In my view, innovation must be viewed from a system standpoint, considering simultaneously the launch vehicle, the satellite business and payload, the ground network and user equipment aspects.”

Innovation must be viewed from a system standpoint, considering simultaneously the launch vehicle, the satellite business and payload, the ground network and user equipment aspects

Describing the qualitative and quantitative parameters to innovation, Dr. Francken believes the purpose of innovation should be “to either allow for new features / capabilities not permitted by traditional technologies and from the quantitative point of view, there should be an improvement of at least 25% in a key parameter – cost, throughput, lifetime and so on.”

Concurring with Roger Franklin on the need for innovation to be transformative, Dr. Phillipe Francken stresses that innovation should be more than normal product line evolutions.

“Most product line evolutions address marginal improvements of performance parameters. Product line evolutions tend to concern aspects of little direct relevance to the customer, like improvement of product line commonalities or management of obsolescence issues. Innovations should be looked from a long-term perspective, not as a short term response to a need.”

Most product line evolutions address marginal improvements of performance parameters. Innovations should be looked from a long-term perspective, not as a short term response to a need

Collaborating with customers to innovate

Being in tune with customers is critical to innovation, according to Franklin. He explains: “Marketability is key to the value of our solutions and our biggest successes have come from products that were developed as a collaborative effort with our customers. Conversely, our biggest product disappointments have come out of development without a clear indication of market need. Consequently, we check for relevancy from very early in the process.

“Luckily that naturally occurs when we are working collaboratively with customers to create solutions to their real-world problems. What we have found through this innovative, collaborative effort is that although our customers have very unique networks, they tend to have problems that require similar solutions. So once we have solved a problem for one customer, the solution for others is similar.”

How to manage the risks of innovation

Dr. Francken admits that innovation conflicts with the space industry’s technically conservative culture coupled with the operators’ heritage requirements.

“This dilemma calls for a sound understanding of real innovation, where new technologies are game-changers justifying the extra risk. A sound technical risk management approach is required to consider all aspects of design, qualification, manufacturing and testing.

The crucial criteria to evaluate risk in innovation includes looking at available alternatives – can similar performances be achieved with flight proven technologies? In addition, testability is critical

“The crucial criteria to evaluate risk in innovation includes looking at available alternatives – can similar performances be achieved with flight proven technologies? In addition, testability is critical – is ground qualification and testing fully representative of conditions in orbit, over the entire life and considering all interactions at system level?”

Risks can be lowered, says Dr. Francken, when “innovative solutions at system levels are based on heritage components that are combined and utilised in new ways. Moreover new risk sharing can be explored jointly by satellite operators, manufacturers, space agencies and the insurance community.”

Despite the risks, Dr. Francken believes that “innovation is essential to the future of our industry, and not just to improve the competitiveness of one operator or manufacturer against its peers. True innovation is not limited to technology developments, but involves a proper combination of technical, economic and market intelligence aspects leading to real value creation.”

Crystal Solutions’ Roger Franklin concurs and says, “The bigger risk is not to innovate. If we as a satellite industry are not innovating, then we will be outpaced by other industries.”

 

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