Term/Case study
Chapter 5
Innovating with Technology, Systems and Information
OUTLINE
Understanding What it Means to Innovate with IT
The Process of Digital Business Innovation
The ‘push’ and ‘pull’ of Innovating with IS/IT
Getting Management Attention for Ideas and Innovations
Joining the Dots: the Search for Ideas
Innovating by Leveraging Information: Exploration and Exploitation
The Big Data Challenge
Discovering Strategic IS/IT Opportunities from Information
Building an Analytic Capability
IT Innovation
What is IT Innovation?
Cutting (“Bleeding”) Edge
“Old” Technology
Digital Innovation
“The successful exploitation of ideas”
The Process of Digital Business Innovation
Idea generation
Awareness
Evaluation
Implementation
Assimilation
IT/IS Innovation Process
Idea generation
Identifying, understanding and appreciating the innovation and the opportunity it potentially offers or the problem it solves.
Concerned with generating new ideas, discovering new technologies and envisioning how they could potentially be leveraged
Awareness
For those ideas that emerge from the IS/IT unit and deemed to have potential, getting the attention of management can be a challenge
Concerned with ensuring that buy-in for the idea is achieved and might entail developing a prototype to ‘prove’ that it works and demonstrate the potential benefits
Evaluation
Deciding whether, how and when to undertake the innovation and make resource commitments
Normally based on business judgement – managers' opinions of the potential of the ideas, not just quantitative criteria
‘Stage gates’ or filters:
Business relevance
Technical compatibility
Economic
Supplier compatibility
Implementation
Undertaking a project or program to deploy the technology
Managing any change or diffusion that may accompany the implementation
Assimilation
New innovation is absorbed into practices and routines within the organization
Fundamentally transforms the dynamics of competition within an industry or the structure of its ecosystem
IS/IT innovation funnel at UK retailer John Lewis Partnership
Identify – A new technology that has been identified by an individual team or group as being of potential benefit.
Candidate – The Technical Architects Group (TAG) has agreed that the technology is of potential benefit to the business. Usually at this stage they are considering suppliers' offerings in this technology area.
Propose – A formal proposal has been written recommending the use of the technology and providing a cost/benefit case for it.
Develop – Produce and test a prototype business application.
Trial – A limited trial of the technology is under way.
Deliver – The technology is being used in a live environment, although not necessarily company-wide.
Open/Closed Innovation
Closed
Internally Focused
Limited to Available Resources
Performed by Employees
Open
Externally Focused
Social Media enabled
User Innovation Communities
Volkswagen's App My Ride
Volkswagen's App My Ride community (http://www.app-my-ride.com/) centred on two separate yet interconnected activities: idea generation and app (application) development.
Participants were invited to submit ideas to the community idea ‘pool’, where ideas were subsequently adopted and elaborated upon by other developers in the community.
First two stages of Innovation
How does an organization become aware of new IT and of new innovations that may result from applying these technologies? Where do ideas come from?
How does an organization make sense of the innovation? How does it assess the capabilities of new information technology from a variety of perspectives, including relevance to the business, commercial impact, and technical compatibility?
How does the IT organization engage with the business to build IT awareness and promote innovation opportunities? How do the business and IT work together to construct experiments and pilot projects to test the potential of new information technology?
Innovating with IT/IS
Pull
Push
Game Changer
Innovator’s Dilemma
Disruptive Innovation
Sustained Innovation
Factors Impacting the Process of Business Innovation with IS/IT
Firm strategic context
The role that information and IS/IT plays in its strategy
Information or IS/IT seen as a source of competitive differentiation or an administrative expense to be minimized?
Industry influences
A myriad of different discussions taking place at any one time
Some of these relate to new technologies
Others to business challenges, regulation, customers, supply chain, markets
Organizational influences
The organization itself can both enable and constrain innovation activity.
Factors Impacting the Process of Business Innovation with IS/IT
The CIO at the global law firm, which has a reputation for innovating with IS/IT, reflected that:
“I think we are blessed because there are a few key people at the top who really do believe in innovation and really see the value of technology. Our CEO loves technology and sees the potential role it can play and is prepared to spend money on it”.
Getting Management Attention for Ideas and Innovations
One word, perhaps more than most, captures the challenge of getting management attention: the proposed innovation lacks ‘legitimacy’.
While an idea might be very relevant and offer significant opportunities, it can still fail to gain any traction in the organization.
Gaining legitimacy for ideas
Build the trust of those who are likely to be affected
Be honest about upsides and downsides
Understand your audience well
Work toward win/win
Use more than information
Searching for Ideas
Technology awareness
Business understanding
Alertness to opportunities
Gaining legitimacy for ideas
complacency trap occurs when an organization believes they are innovating, when in fact they are applying a known technology to a defined problem or opportunity.
legitimacy trap occurs when a technology with potential application is identified but because of, for example, the poor credibility of the IT unit or lack of appropriate business relationships, it fails to gain any traction in the business.
imitation trap arises when the organization simply copies what others have done in applying technology to a business problem or opportunity, which solves the problem, but does not lead to innovation.
ignorance trap arises when they fail to acknowledge that there are problems and opportunities still to be defined and technologies to be identified.
Leveraging Information
Exploration
Use Information to generate new knowledge
Ways that data is being explored include: modelling risk, conducting customer churn analysis, predicting customer preferences, targeting ads, and detecting threats and fraudulent
Be proactive in gathering data
Exploitation
Harnessing information to reduce transaction costs or to take advantage of information asymmetries
Exploring Information
The DIKAR Model
Information management
Relates to the capture, processing, maintenance, storage and presentation of data and information
Knowledge generation
Concerned with the discovery of insight from the information
Decision making
The development and assessment of alternative options before a choice is made
Execution
Carrying out the actions required by decisions taken and measuring the results of those actions.
The Big Data Challenge
A challenge for all organizations today is to immerse themselves in the wealth of structured, unstructured and real-time data generated from operational processes as well as that emanating from outside the organizational boundary, from customers, competitors, suppliers, business partners and other ecosystem players, and finding ways to capitalize on this information or so-called ‘big data’.
This is not really an IT issue – although there may be technical matters to address – but an issue for all executives as there are likely to be potential strategic implications from the exploration of information.
Information, Knowledge Discovery and Decision Making
(a) Manager + Information = Decision or Insight
(b) Manager + More/Better Information = Better Decision or Insight
Equation (a) captures the generally accepted relationship between manager, information and decisions or insight.
Equation (b) is the logic that typically lies behind investments that most organizations make in analytical tools.
Knowledge Creation
Socialization
Sharing of tacit and explicit knowledge by individuals through observation, imitation and practice (i.e. without verbalization)
Combination
Combining sets of explicit knowledge held by individuals through social processes
Externalization
Involving interaction between explicit and tacit knowledge through social dialogue to create shared concepts, normally within a team and often involving the use of metaphor
Internalization
Closest to traditional organizational learning, although action is seen as an important component.
Techniques for Discovering Strategic Opportunities
Techniques for Discovering Strategic Opportunities
Moving between questions and data
Three Competences for an Analytics Capability
Manage data
Accurate, timely and quality data is the foundation of an analytics capability
Make sense of information
Data/information must be interpreted and meaning ascribed
Act on understanding
Organization must have the ability to act on insights and make appropriate decisions
Building Analytic Capability