Digital transformation and digital innovation aren’t just buzzwords or concepts to ‘keep an eye on in the next decade’; they are here. Sure, tech like virtual reality received a lot of hype in 2018 and hasn’t really panned out the way we would have expected (yet), but digital transformation (DX) is happening across every industry and the time to start thinking about it is now. IDG’s 2018 Digital Business Survey reports that 89% of companies plan to adopt a digital-first business strategy, but only 44% have fully adopted this approach.
Companies founded with a digital mentality (i.e. Warby Parker or Netflix) aren’t really the focus here as they don’t need to ‘transform’, but they are still great examples of the power in digital innovation. Rather, organizations should take note from the likes of The New York Times and Philips which prove that pivoting to digital (in otherwise very analog industries) can help you not only survive, but thrive in today’s landscape. On the other hand, fail to innovate or lean into digital technology and you risk following in the footsteps of Toys R Us or Kodak. With all of that said, what does digital innovation really mean?
Digital innovation isn’t about the technology itself, but rather about people’s ability to utilize digital technology to solve traditional problems. It is the process of leveraging advancements or innovating with technology to reimagine how business is done.
Digital disruption on the other hand is the sometimes lethal effect on businesses that fail to transform and improve experiences or create efficiencies and lower costs. Advancements like machine learning, internet of things (IoT), artificial intelligence (AI), and omni-channel experiences continue to evolve, and each of these technologies have the power to drive serious growth for companies by automating tasks otherwise reserved for humans. This may sound like a problem (or opportunity) reserved for software companies or, at the very least, reserved for the IT department, but every organization can stand to benefit from leveraging digital technology. The key is finding out the best application for your business.
Define, De-Risk, Deliver
To start, it helps to think about the current state of your business and map out where your challenges or opportunities lie. Could your operations team benefit from creating efficiencies in your business by providing access to information for improved decision making? Is there a way to improve the employee or customer experience when interacting with your firm? Possibly the opportunities lie externally and involve customers, vendors, or competitors. Or is it an internal problem focused on employees and current systems?
Put simply, digital innovation is not easy. Once you’ve defined the opportunity and objectives for your digital strategy, the work of innovating (ie. identifying and testing different solutions) begins.
It is important to keep in mind that this likely will be and should be an iterative process. At Differential, use Design Sprints to help rapidly define and de-risk our clients' initiatives. We help compress the front-end work that could potentially take months of discussion, testing, and failure into a few weeks so that you can walk away with a clear vision and a prototype for your digital product that has been tested with real users.
Finally your team must actually execute on the vision and deliver a solution. Any digital product owner can attest to the issues with large initiatives, but software projects pose their own set of challenges that require unique expertise and experience. In fact, Digital Journal lists a ‘lack of skilled workers’ as one of their Top 5 Reasons that digital transformation fails. Technology like AI and AR sound cool (and they definitely are), but brainstorming ways to use this technology and actually building the tools and systems to do so are very different tasks.
Where do you want your company to be 2, 5, or 10 years from now? Is digital innovation a part of that growth strategy? It should be. As the proverb goes, "The best time to plant a tree was 20 years ago. The second best time is now."
Not sure where to begin when it comes to digital innovation? Feel free to contact us. We're here to help take your back-of-the-napkin idea and build a great digital product.