Peter Merholz's Stop Designing Products presentation at SHiFT 2006 made the case for designing systems instead of just the point solutions within (in most cases individual products). Merholz described how Adaptive Path's research when working on the redesign of a financial services Web site led them to discover that the Web site they were working on was only a single part of a much broader set of customer touch points for their client.
Merholz then walked through several examples of integrated systems in action. In addition to George Eastman's original Kodak "box camera", he described how iTunes, the iPod, and the iTunes Music Store all work together to create a cohesive experience. In particular, the iTunes software absorbs a lot of the functionality that other MP3 player companies try to cram into their player. Flickr, on the other is an example of a very open system (as opposed to Apple's tightly closed system) that allows others to expand the site's functionality.
Insight into these examples and more led Merholz to embrace Frog Design's mantra of "the system is the product" and to evolve Adaptive Path's work and principles to account for a broader set of customer experiences and increasing expectations. As a result, his firm and other designers have needed to address bigger problems.
Why the shift? Looking at the history of economic theory, Merholz explained how most approaches to date have focused on enabling optimization of efficiency and quality. Now these factors have run their course (Dell Computer differentiating by price alone is a notable example) and companies need creativity and innovation to move forward. As a result, the importance of design has begun to increase.
According to Merholz, the path forward is developing coherent "experience startegies" that establish a vision that defines how users engage with your entire organization (system). Not just your product.