The digital landscape is always in a constant flux. Change is not a future concept, it is always happening now. If graduates studying IT thought this concept was tricky (that what they’re learning may be out of date by the time of graduation), how do businesses feel?
Businesses across all sectors are constantly feeling this shifting. Consider this: a recent report by McKinsey found that companies with advanced digital capabilities generate 2.8 times more revenue growth than their peers. Digital innovation is no longer optional, even for the most local and traditional of business types.
We can define it as the implementation of new technology to fundamentally alter product creation or service delivery – but we mustn’t forget that it can also be centered around internal processes. This article looks at providing a roadmap that goes from strategic planning to real-world implementation.
What is Digital Innovation?
Digital innovation is a broad term, and it doesn’t just mean adopting the latest tech. A cash-only takeaway store that begins accepting card isn’t digital transformation, but it could be if the POS system they employ is a part of a broader ERP implementation that digitally tracks stock, sales and suppliers within a cloud-based system.
But even then, that’s missing something. Ultimately, digital innovation really pushed companies to change their culture and organisational structures – it has to run deep. Product innovation may mean new digital goods or services, but it may also mean an overhaul of internal operations. Netflix began by offering films via streaming rather than post, but this led to a data-driven approach to everything, where even Netflix-produced films are informed by user data. Process innovation means improving operational workflows and KPI tracking. And business model innovation involves overhauling how a company operates using digital tools.
Emerging tech like AI and the Internet of Things (IoT) all act as catalysts for this transformation – it’s not just the specific tech itself.
Laying Out a Strategy
A well-defined digital innovation strategy is going to be a prerequisite. It ensures all initiatives and new individual adoptions (i.e., using LLMs) align with core business objectives. This strategy acts as a roadmap and enables clarity when assessing adoptions.
A robust strategy must include a clear definition of goals, such as what the business is trying to accomplish with digital efforts. Comprehensive market analysis may be required, such as the current industry trends and customer demands. Of course, deferring to an expert within the field is economical; besides, having an in-house expert is unrealistic. Competitive analysis may also be needed to identify unique selling points.
The available resources are going to be important, such as budgets, personnel and existing technology, and then measurable Key Performance Indicators (KPIs) can be established to track progress.
Some companies that help include Making Sense – Digital Transformation, who specialise in custom software and digital transformation strategies. They work with clients across diverse sectors and will save businesses time in researching industry trends. Accenture also provides extensive consulting services, with a focus on technology strategies. Finally, Deloitte offer technology consulting services too, as well as having a broad global reach and deep understanding of innovation.
Bridging Strategy to Implementation
The transition from strategy to action is where many initiatives begin to falter. A detailed plan is what turns strategy into tangible, actionable steps. This requires realistic timelines and budgets, along with meticulous resource allocation. A project team with defined roles will be needed, and selecting the right tech stack that aligns with the goals laid out.
A minimum viable product (MVP) allows for market testing, if the transformation is product-led. This is where early user feedback is invaluable and risk assessment identify potential problems. Mitigation strategies can be developed, along with agile methodologies.
Ultimately, the process will be iterative in nature, as it allows for flexibility, so long as the core goals and methodology remain consistent.
Executing the Innovation
Of course, implementation requires you to tread carefully. A phased roll out of any new innovation is going to be preferable, though it’s not always possible. When product-led, it can reduce disruption and assist user adoption. This is where testing is even more useful.
Change management is equally important, as it prepares the organisation for the changes ahead. Regardless of where the transformation is taking place, continuous monitoring will track the performance of the implementation – whether it’s internal operations or a new service, data must be gathered wherever possible. And, if the change is internal, feedback still remains important, but from the employees.
Agility
Digital innovation is rarely a linear process, but an iterative one. Constant improvement will be needed because the transformation cannot be completed in one go. Teams should be ready to pivot when needed in accordance to a feedback loop.
Data can inform the success of previous iterations, but highlight problematic areas too, such as new bottlenecks or potential security weakpoints. Clearly, there is a lot to consider, and implementation can get messy – this is where the value of using a consultant and outsourcing team really pays off.
Smooth digital innovation depends entirely on the strategy, just as much as the execution. It’s not just the tech that’s important, but a broader vision and alignment with goals.
