‘Digital innovation’ and ‘digital transformation’ are more than mere buzzwords. Effectively applied they can help an organisation develop and re-imagine itself to meet the needs of new and emerging markets.
But in a world of business jargon, how many of us truly understand what these terms mean? And how can we use these approaches to shape the future and manage our human resources.
These are the questions tackled by Dr Pietro Micheli, Professor of Business Performance and Innovation, at Warwick Business School, in the second of two new illustrated guides on ‘The Rise of Digital Technology’ for Crown Workforce Management.
Whilst digital innovation and digital transformation are both components in the rise of digital technology, he explains, the terms are not interchangeable. Though ‘innovation’ underpins the ability for businesses to ‘transform’, each point to different opportunities, challenges and aims.
The guide, available from www.crownworkforcemanagement.com/digital2, clearly explains how digital innovation involves the creation of new, IT-enabled products and services that facilitate seamless experiences for people. “Digital innovation is a key component of how products and services are developed today. Think of it as a support for future products and services,” suggests Dr Micheli, in an accompanying video in which he details how digital innovation is creating fantastic opportunities across a range of sectors.
Here he describes how digital innovation, the introduction of new channels and use of data analytics can help create enhanced customer experiences. In the workplace, innovative technology can also improve employee motivation and productivity. For example, employers today can get a more accurate picture of personnel performance and communicate more frequently with digitally-supported performance conversations as opposed to annual paper-based appraisals; and in many organisations, the learner-driver creation and access of personal development materials is superseding traditional face-to-face learning.
While digital transformation often relies on digital innovation, he points out that the emphasis really should be on ‘transformation’.
“Transformations are underpinned by an adoption of technology, but also by the fact that they have the right people in the right place at the right time… If you want to change the experiences of individuals – in flights, in banks, in hospitals – you need a different interaction that is managed by understanding not only what your employees can do, but what they should do,” he says.
To meet the increasing demands of customers who expect fast, personalised services often accessed by the touch of a smartphone, Dr Micheli believes that organisations need to change their overall strategy and operations. “The nature of companies is changing and so is the business model,” he adds, “the way in which they function and the way in which they generate and capture value.”
The guide cites as examples automotive manufacturers now providing mobility services and how our notion of financial services providers would be likely to change were Amazon to start offering retail banking services.
To conclude, Dr Micheli asserts that digital transformation does not fall within the remit of IT staff alone. It requires the involvement of employees from all areas of the business, driven by clear leadership from senior managers.
“To some extent the technologies are already there, but it’s the culture of the organisation that needs to change. The type of people recruited and deployed for different tasks is fundamental.”
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