Leveraging Disruptive Technologies for Systematic Innovation

18-04-2013
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Innovation and Technology

The one thing around us that is changing and evolving at a very rapid pace is technology. Over the last few years, disruptive technologies such as Big Data Analytics, Mobility, Cloud Computing, Social Computing and Next Generation BPM and Decision Platforms are acting as Digital Disruptors to trigger transformational initiatives in businesses (and society) across industry sectors. Interestingly, and perhaps logically, there appears to be a clear pattern that enterprises the world over are linking projects in these technology areas to their Transformation and Digital Innovation initiatives.

In other words, there appears to be an expectation (often not explicitly stated) from enterprise customers the world over that these disruptive technologies are what will help them build innovative solutions in their respective sectors. There are plenty of obvious examples:

  • Retailers the world over are trying to leverage the power of mobile applications, for example to enhance store associate productivity or for implementing mobile point-of-sale terminals.
  • Consumer Goods vendors are keen to leverage advanced consumer analytics to understand demand signal from consumers, and improve agility in their product development and launch processes.
  • Insurers are looking to leverage the power of Social Media to keep their customers engaged.
  • Banks and financial institutions are looking at big data analytics for operational risk management.
  • Small and medium businesses across industry sectors are looking at cloud applications to help them get started with minimal capital expenditure on their own data centers and software infrastructure.

Now, if these technologies are primarily being considered as innovation enablers, then is there a systematic approach to plan on how they can be leveraged?

Innovation as a Discipline

Many people consider Innovation as the realm of inspiration and creativity. While these are certainly important traits for innovation to take place, equally and perhaps more important are the traits of perspiration and discipline. Innovation does not necessarily have to happen with Archimedes type Eureka moments. A systematic, disciplined approach to addressing a problem in a different and non-traditional manner is what usually results in more instances of innovation, rather than relying only on the Eureka moments.

Note that moments of insight are important however, a systematic and disciplined approach often results in focusing our energies in a manner where these moments of insight might occur more  frequently rather than if they were just left to chance.The million dollar question, as is often the case, is where to start. One way to figure out where to start is to identify problem areas, or Target Areas for Innovation that we can channel our innovation pursuits into.

In the article The Discipline of Innovation at Harvard Business Review [see references], Peter F Drucker identifies 7 such target areas, namely Unexpected Events, Demographic Changes, New Knowledge, Changes in Perception, Incongruities, Industry and Market changes and Process Needs. These areas are depicted in Figure 1.With these areas serving as a baseline, an enterprise innovation strategy can look into each of these to identify opportunities, problems or gaps that need to be addressed through innovation.

Focused Innovation

Now we can come back to the original question: How can we leverage disruptive technologies to achieve innovation in a systematic manner?One way to address this is in looking at the intersection of the disruptive technologies and the 7 target areas.

1.       Industry & Market Changes

The best example we can consider in this category is the rise of the social & mobile consumer. Mobile devices have become the primary means for accessing the internet, and social networking is forming the main chunk of online time. These trendsare resulting in changes in the consumer market that I believe will appear quite dramatic when we look back after some time.

The implication is that if you are in a consumer centric business such as the retail or consumer goods sector, areas where you could focus your innovation efforts on could be mobile applications, social marketing or consumer analytics.

2.       Demographic Changes

A good example I can think of for demographic changes is the increasing number of people above the median age in a region such as the United States of America. One resultant implication would be the increased focus on healthcare and this would be one good area for focused innovation. For example, we could see cloud applications for the management of health records and easily accessible by patients as well as their doctors using mobile devices. Microsofts Health Vault application falls in this category.

3.       Incongruities

Incongruities refer to gaps or whitespaces, such as the one between availability of data and using it well. For example, companies across sectors such as Telecom, Retail, Consumer Goods, Financial Services, Insurance and even Energy and Utilities are likely to have a lot of consumer data. However, there is still a remarkable lack of consumer insights for example the question What do my customers really want? is still yet to be answered well. It is also becoming increasingly clear that

the answer to this question might determine not just the growth but also the survival of several organizations.

4.       Unexpected Events

Usually, no stone is left unturned in business planning, to ensure predictable results.  Yet, there is no shortage of unexpected events with both positive and negative consequences. The example that comes to my mind is the sudden surge in tablet computer sales over the last few years, and the corresponding decline in PC sales. This has caught a lot of the large incumbent players completely unprepared, and has opened the market for a whole lot of new companies specializing in mobile devices and eating into the market of the PC manufacturers.

What does this mean from an innovation perspective for example for the software industry? One implication is that sincethe large majority of computing devices that will be sold going forward will be tablets rather than PCs, then the focus for software applications should be tablet and touchscreen applications rather than PC based applications.

5.       Changes in Perception

The best example I can think of is that cloud computing, which was initially often equated with virtualization of hardware. However,perceptions now have changed significantly. Cloud computing today is as much to do with applications as it is to do with infrastructure. The success of Salesforce.com is only one example among several.With this change in perception, one area to look to innovate is in the cloud applications space. Conceptualizing, designing and implementing applications for cloud rather than the traditional on-premise scenario should be one innovation focus area for organizations across most sectors.

6.       Process Needs

Process Optimization is a regular focus area for innovation initiatives, especially incremental innovations. With the increased focus on analytics, one interest area for a lot of enterprises across industry sectors is process visibility and analytics. The implication in terms of innovation focus is to look at areas of Business Process Analytics, Process Visibility Improvements, improved visualization of process data, and so on.

7.       New Knowledge

Todays disruptive technologies are likely to be tomorrows commodity technologies. In this context, I would say that new knowledge refers to next generation technologies which might become tomorrows disruptive technologies.  The innovation strategy for any enterprise should include a portion of innovation investments should go into exploring and nurturing such technologies.

Conclusion

Innovation is a key item on the agenda for most enterprises the world over. Disruptive technologies such as the SMAC stack (Social, Mobile, Analytics, and Cloud) are being increasingly looked at as innovation enablers. One challenge most enterprises face is in identifying target areas for innovation initiatives. This article describes a systematic approach to identify such target areas.

If you are looking at leveraging one or more of the disruptive technologies for your innovation initiatives, please reach out to us.

References

1.       The Discipline of Innovation, Peter F Drucker http://hbr.org/2002/08/the-discipline-of-innovation/ar/1



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