The Building Blocks to Digital Innovation

‘Digital Innovation’ has become the new ‘Mobile First’ buzzword for almost every company across the land over the last couple of years. These two initiatives are actually very closely related in many ways though the ‘Mobile First’ strategy gives some more wiggle room for traditional practices and flexibility in how updates and upgrades are deployed.

When assessing an organization’s capabilities to deliver on Digital Innovation goals, a number of key IT, Infrastructure and Ecommerce competencies must be reviewed before embarking on the journey.  In this article, I will use my experience leading Mobile & Digital Innovation for F500 companies to touch on some of the more important factors that must be considered and that have a significant impact upon a company’s ability to be agile and deliver against goals of business transformation through digital innovation.

So lets dive in and look at the necessities that need to be in place for businesses to successfully createQ value through digital innovation.

Strong Systems Architecture

You will be hard pressed to find any mid to large company that has operated for 20+ years and does not have at least a few pockets of systems that are critical to the organizational infrastructure, but are either:

• Baked in-house, often by a set of ageing developers, putting substantial risk on succession planning for retirement of those with the unique knowledge of the systems in question.
• Heavily modified off the shelf solutions that have been amended to fit the company’s purposes to the extent that they have completely diverged from the solution’s core development path to the point of non-reconciliation, and the company is subsequently unable to leverage new features from the core product’s development path.

Both of these scenarios can create major headaches for a business. This is supplemented in many cases by a combination of:

• Poor, or non-existent documentation to the customization that has happened over decades of work.
• Customizations and feature additions that have been undertaken without long term planning.
• Abstracted rules and customizations that have not been not centrally managed and administered in a structured manner.

This combination can create significant challenges for teams looking to drive business transformation through digital innovation. Often the customizations that are baked into the company’s systems are done so as these systems are integral to the operations of the business, and modern approaches to connectivity through APIs and Microservices architecture, are not readily available.

Consequently, businesses can look towards Digital Innovation as a strategic objective, but will often find that providing the meaty value for customers, partners, and internal development teams, is lacking due to the complexity and unique setup of the underlying core business systems that are impacting upon these plans.

The Solution

For a business to successfully pursue a transformative innovation strategy, there are three core facets that must be in place:

1. Microservices Architecture
2. API Ecosystem and Management Layer
3. Strong Product Development principles and a deep internal understanding of the blockers and enablers that exist.

Now, this isn’t to say that a company can’t pursue tactical innovation without the underlying organizational structure built out to promote success, but such innovations will tend to operate more at the surface layer of the business, and by leveraging edge case, or less integrated solutions to enhance upon the user journey.

The “Quick Fix” Solution -Keep it at the Edge!

A good example of business driving innovation from within are the recent enhancements to Amazon’s delivery service. The user receives real time updates on their item delivery, plus a Push message with picture showing the location of the delivery when an item has been delivered.  This is entirely done from the combination of the edge device (the driver’s cell phone), a simple connectivity to the delivery order in question, and by leveraging baked in App features. Likely the supporting data around this service is stored in a database that is not fully integrated into Amazon’s core technology stack, but rather has been built on as a value add through a rapid innovation process.

For most businesses, the best opportunities to drive digital innovation currently sit at the outside of the core of the business operations. Nonetheless, such innovations can still add significant value to the customer, by smart identification of customer pain points and a frank assessment of the necessity to get deep into the company’s IT infrastructure to solve against these issues. The majority of the time, this deep integration is not necessary, or if it is, certain requirements can be pinpointed and acted upon to help facilitate the new initiative.

Creating a Culture of Innovation

The next step in the journey is to take the data insights and learning gained from these new initiatives, and to integrate these to the incumbent elements of the core business. Doing so will enhance the capability of staff across a business to leverage these new insights to identify, nurture and champion further digital innovation initiatives by exposing the areas of relative weakness across the capitalizing, and create internal drive to update, upgrade and transform these for the right reasons.