A study through MediaPeanut explores the rate of technology development, reporting the speed technology grows is 2x every 18 months when computing is measured. The same study revealed over 89% of big data has been produced within the last 2 years.
Consumer trends reveal that technology is so deeply integrated in day to day life. A full six-course meal can be ordered with the touch of a button on an app. Laptops unlocked with fingerprints, iPhones unlocked with facial recognition technologies. Prescriptions are renewed online and online shopping has replaced the need to leave the house.
Just as how technologies improves day-to-day life, simplifies mundane tasks, and improves processes, technological advancements injected into businesses have a significant impact with lasting effects.
A digital innovation strategy is a useful tool to plan and implement transformative solutions, to improve the logistics and strategy of a business. It boils down to what innovations improve the business and how are they going to be pushed into the business model. These digital innovations alter how a firm operates, and what services or products are offered to consumers. The strategy creates a place for innovations to be constructed and accomplished. Invoking a strong digital innovation strategy helps firms remain innovative in the marketplace and beat out competitors.
If successfully defined and implemented the strategy can:
When constructing and implementing a digital innovation strategy, there needs to be a great deal of thought behind the project. While digital innovations improve many factors of a business and provide a competitive edge, their implementation needs to be done with a logical approach. Innovation is one of the big ticket action words thrown around, but in order to reap its benefits, one must understand the threshold of its impact. Remaining innovative in a changing world is a challenge not for the weak. It seems every day the next big thing is out and what we once did is considered obsolete. Staying aware of the standard of what’s available, and innovations already established, makes the transition more seamless.
Aside from being aware of the current innovation standards, there are various key components that make or break the success of the strategy and need to be conceptualized prior to the strategy implementation.
Key components such as:
The ideation process refers to using creativity, research, and collaboration to develop solutions. This process is catered depending on the firm itself. It includes identifying the problem or working backward and identifying the solution then brainstorming the steps needed to reach it. Key elements of ideation are deciphering the questions. What can be improved? What does that process look like? What should the innovations solve? How do you plan on innovating? Before jumping into a strategy, a firm must explore and define its ideation process. For a digital innovation strategy, an extreme amount of creativity must be expelled. Innovations are revolutionary changes to an existing product or service or way of thinking and must be well thought out.
While all internet users have a digital footprint, outlining their online presence and activity. Not all users understand how to read or access this information. The concept of big data and its impact on forming digital innovation strategies are similar. The sheer amount of data available is overwhelming. It’s important to understand how to use the data effectively. Big data reveals key information that is crucial to understanding the market and consumers. By understanding analytics surrounding consumer behavior a company can predict and build its business model around it as well as use the information to finetune future digital innovations.
Market trends represent the direction a market is heading, it fluctuates and is impacted by consumer behavior. By analyzing market trends firms understand the market deeper in turn allowing them to reciprocate appropriately. These trends display what direction a market is heading, and they show what consumers value. A significant part of market trends is the price factor. It shows the tendency of a standard price, what consumers are willing to pay. Incorporating market trends into a digital innovation strategy protects firms from creating a product or service that has no demand, ultimately wasting resources.
By following trends, key insights into consumer behavior are disclosed. Consumer needs are imperative to understanding the market, they reveal what is important to the consumers. When creating a digital innovation strategy these trends reveal the wants, needs, and demands consumers have. Is a product great and innovative if consumers don’t need it? Without a need or demand products are pointless and expensive mistakes. When thinking about incorporating digital innovations into a business model it’s important to ask, does the consumer need this? Is there a demand for this technology? Does this innovation fit with consumer trends?
The aspect of consumer experience is key when innovations are involved. A truly innovative product is created with the consumer in mind. How will the consumer use this product or service? What will their experience be like?
Myspace is a great example of market trends and how they shift with user popularity and user experience. Myspace use to be the prime social media platform, some may even argue the first social media platform, back in the early 2000s. Users created their own personalized pages and could interact with friends through the platform. At its peak, the website was worth around 12 billion. In an effort to monetize the site, owners added a significant amount of advertising causing users to lose interest. The site failed to pay attention to user preferences and slowly came crashing down just as Facebook entered and took over the marketplace. MySpace failed to pay attention to consumer trends and user experiences which led to its downfall.
Innovations aren’t a one-man show, in order for a firm to truly be innovative its got to be all hands on deck. How feasible innovations are is dependent on the current climate and culture of the firm. Achieving these innovations is done by leadership striving to think unconventionally and creating an open and collaborative culture.
Harvard Business Review surveyed around 3,500 people from various global companies and found a large majority of employees believe innovation is a joint responsibility but that resources to innovate aren’t equally distributed.
A disconnect between leaders and employees is deadly to innovations in tandem with a lack of clearly defined expectations. The communication system between leadership and employees needs to be clearly established prior to implementing a digital innovation strategy in order to grasp the full benefits it has to offer.
While a complex concept, the internet of things (IoT), is key to preparing a firm for digital innovations. IoT refers to a system of ‘things’ relating to their network without human interactions. These things represent a diverse array of products, from an electronic heart monitor to a car GPS.
“The Internet of Things (IoT) describes the network of physical objects—“things”—that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet” - Oracle
IoT shapes how businesses operate and create connections through data. IoT is important to grasp before implementing a digital innovation strategy. IoT reveals the reality of innovations being built into established tech environments. IoT is an innovative concept by nature and its implementation led to operational efficiency, reduced labor costs, and simplified data collection, all done without human interaction. Considering where IoT fits into a firm prior to the implementation of a digital innovation strategy is vital.
Implementing digital innovation improves processes and is a considerably high priority. By utilizing a strategy and taking a logical approach, digital innovations are scaled and grow with the needs of the company, easing the process along the way.
The most important factor to keep in mind when creating a digital strategy is its purpose. What results need to come from the strategy being implemented, what is the end goal? By thinking of the strategy with a futuristic approach the alignment of the goals and the strategy itself, the goals are more achievable.
How leadership responds and carries out the strategy is a defining characteristic of success. The strategy is implemented with a top-down approach, starting with the top dogs, who set the standard.
Forming a vision requires both examining the little details and taking the big picture into account. Asking important questions key details and motivating factors are revealed, which in turn is applied to the vision.
Why do we need to innovate? How do we innovate? What do we innovate?
By asking the right questions the answers will help formulate the next steps. Knowing the answers helps construct the strategy with a forward-thinking mindset. Having a well-thought-out vision leads to faster innovations and informed decision-making.
Now that the vision has clearly been dissected and digested, the planning stage of the strategy is where the meat and potatoes are prepared for implementation. Having a productive plan that aligns with the vision leads to a successful strategy. During planning, a prioritization of goals is discussed. What needs to be achieved first? What KPI are expected? What hurdles need to be accounted for and how do you overcome those? All these obstacles are defined in this stage.
Once the vision has been established and the plan perfected, the strategy is ready to be deployed. The action stage of the strategy is more about reviewing and adjusting. All the leg work has already been done, at this point, it’s a matter of carrying out the strategy and creating minor and if need be major tweaks, depending on how the strategy is received and acting in real-time.
Forming a solid and secure digital innovation strategy helps companies innovate and stay relevant within their market and the surrounding competition. These strategies are vital pieces to the puzzle but must be well thought out and constructed with the consumer in mind. By taking the proper steps to ensure the strategy will be beneficial, companies make transformations to their service that will have lasting effects.