What is Digital Innovation?
Digital innovation is defined as the process of ideating and developing new digital solutions to improve businesses, personal lives, public services and social utilities.
Some examples of digital innovations across sectors are smartphones for consumers/ personal use, software-as-a-service (SaaS) solutions for businesses, mobile apps, digital gas and electricity meters, internet-of-things (IoT) devices etc.
Before we dive deeper, let’s clarify a few things around this concept. At times, there seems to be a confusion/ mix-up in online content around digital transformation and digital innovation. To clarify, it is digital transformation that is the organizational/ business utilization of digital solutions to improve efficiency and effectiveness, not digital innovation. Digital innovation is what produces the solutions that are then used in digital transformation projects, along with its various other forms and uses.
Digital innovation also differs from technology innovation, in the sense that technology innovation includes digital innovation, but not the other way around. A technology can be digital or non-digital, such as technology used in power generation, vehicle engines and turbines, industrial machinery etc, all being non-digital. A simple example to explain the difference will be an old CRT TV which uses analog cathode-ray tube technology (technology innovation), while the modern flat screen TV uses LCD digital displays (digital innovation and technology innovation).
Now that we have that out of the way, let us understand digital innovation in further depth.
Related: What is Innovation Management?
Framework for Digital Innovation Process
Digital innovation today has a big space to play in. From pure software to hardware-software integration to only digital hardware, the room for ideation and implementation is wide.
Invariant of the industry that you are in, the basic framework for digital innovation is the same. Here are the key process steps in the digital innovation framework:
- Step 1. Vision and ideation:
Vision is the abstract idea of where you want to innovate digitally, followed by ideation, which is being more specific about the actual innovation. In the initial vision stage, you don’t need to know what the final innovation will look like, instead the focus should be on the space where you are drawn to innovate.
For example, you may be in the industrial machinery business and your vision is to digitize a process, a tool or combination of both. This is the vision. At this stage you may not know how this is to be done exactly, or what kind of software will need to be developed etc.
The very next stage is the ideation of the solution. This may have many variations and options in raw state without much research going into what the feasibility of each idea may be.
This is pure idealistic vision and ideation.
- Step 2. Idea screening and innovation model selection
Idea screening is the process where your digital innovation gets more real. This is the step where you need to do some more solid research and see which ideas are more feasible to do. This is also where you can get clarity on the type of innovation management model you want to use.
For example, you may choose an iterative innovation model where you have a final idea of the digital solution but you can get there more effectively and efficiently using multiple iterations rather than trying to create the final solution at once.
You also don’t need to completely ditch all the other ideas, you can have them in a buffer to be picked up after some initial success.
A good example here will be how the iPad was created. In an interview with All Things Digital, in 2010, Steve Jobs clarified that his first idea was to create the iPad. But then he felt that the mobile version (iPhone) would be a better investment at the time, and then after its success, or as he calls it “when we got our mojo back”, they picked up the iPad’s innovation.
- Step 3. Technology and infrastructure:
Digital innovation rests on existing available technologies and infrastructure. This may be computing resources such as laptops and servers, and infrastructure such as machinery and real estate space. Your team can then use them to create the prototype solution for testing.
If you are an independent innovator and not innovating for an organization, this is also the stage to calibrate how much investment is needed to develop the prototype and whether you want to reach out to investors at this stage or after the prototype is ready.
- Step 4. Prototype and testing
A prototype is a functional state of innovation in its bare bones. At this stage there are no aesthetic considerables, just pure utility and working components. Once your prototype digital innovation is ready, it is time to test it. This typically calls for a range of tests such as user testing, function testing, market testing, closest competitor comparisons etc.
Based on the feedback from these tests, some modifications may be required before the final development can be done for launch.
It is important to note that this is not the end of testing, which needs to continue even when the final version is ready, and even after launch. Testing is a never ending process to ensure quality and functionality of the innovation, be it software or hardware. Even production lines can have faults, human error may creep in, aesthetic and user experience appeal may need upgrades etc, and all this is made visible through continuous testing before and after final launch.
- Step 5. Final development
Once your prototype has passed the checks with desirable results, it is time for the final development step. It is now that several teams, other than your core product development team, may need to get involved to make your prototype market ready, such as user experience designers, marketing and sales etc.
It is important to note that the input from your go-to-market team is critical for successful final development and launch. The core product development team may have certain ideas about the innovation, which may be contrasted by other teams, which is fine. Selling the innovation is as important as developing it, which is where the success of the innovation will come to fruition. Open internal debates are a part of discussion and collaboration, and is a healthy organizational practice.
- Step 6. Launch and deployment
Launch events are typically a big part of an innovation’s go-to-market strategy. In the case of software digital innovations, the launch may be largely done online. In the case of hardware innovations, it can be both.
The launch may be a few days prior to the actual deployment of the innovation to be made available for public use, be it for businesses or personal use. The innovators may use this time to evaluate demand more clearly based on the buzz and reception of the launch, and post-launch interest.
Once deployed, the teams need to be focused on any issues or feedback and seek to mitigate them through quick resolutions and clear communications with the users. The cycle of feedback and resolution should continue throughout the product’s lifecycle to ensure customer centric updates.
Related: What is a Culture of Innovation and How to Create it
Types of Digital Innovations with Examples of Applications
Digital innovations can come in various shapes and forms. It can be software or hardware or both (like smartphones and laptops). Similarly, it can be a product, or product-driven service. For example, a financial brokering app is a product (the app itself) that drives the service business (the financial brokering).
With that context set, let’s understand the various types of digital innovations that we typically see in its various forms:
- Software and mobile apps
A software innovation can be self-sufficient digital innovation, such as a customer management software, or it can be the product that powers a larger business, such as a laundry services mobile app. The innovation may also use software-hardware integration, as is the case with laptops, smartphones and gadgets where the OS innovation rests upon an innovative hardware, such as the iPad when it was launched.
Then there are software innovations that help control hardware. For example, internet-of-things devices like app-controlled home automation, industrial equipment control systems etc.
The world of software and mobile app driven innovations are still expanding and evolving, and the scope for innovation here is very wide and open.
- Communication devices
Communication devices as digital innovations typically use microchips and software to be functional. Such devices are innovated to work on technological innovations, since digital communication devices are intermediaries that rely on other hardware to enable actual communications.
For example, wi-fi routers cannot let you communicate by themselves without the area already having fibre optic cable laid out with wired telephone connection in the home or office. Similarly, smartphones/ mobile phones themselves cannot communicate with each other without a carrier’s tower or wi-fi.
- Display devices
Innovation in the digital display sector has been vast in the last 2 decades and still on-going. From laminated mobile displays with high resolutions and colors, to large industrial-scale displays and monitors, display innovations has had a robust history of development.
A latest example in digital display innovation is flexible displays that have entered the market but still needs refinements to reach large-scale adaption and cost-reductions. This creates room for new innovations and innovators to enter and disrupt the market.
There is also a lot of buzz around e-ink digital displays that use real ink in conjunction with digital technology to enable paper-like reading. Here too there is a lot of room for improvement and innovation and this digital technology is yet to mature.
- Home utilities and tools
Increasingly, home utilities are being digitized to incorporate smart-tech updates. For example, smart coffee makers, smart refrigerators, smart ACs etc. Even some toothbrushes are now equipped with digital sensors to analyze tooth health.
Although some AI gimmicks also made their way in, the real digital innovations that add real value for users see good success and revenue.
- Personal health and healthcare industry
The personal health market has seen a lot of digital innovations in the last 15 years. For example, smartwatches with health tracking, digital thermometers, blood pressure and heart rate monitors etc have been in the market for a while now and undergoing continuous refinements.
The healthcare industry at large has seen digitization of many equipment for better monitoring and control. Today most hospital and clinic equipment such as X-ray machines, MRI machines, CT scanners etc, all use digital devices to display the information that the hardware is picking up.
- Industrial devices and tools
Industrial automation and digital innovation have been going hand in hand. For example, internet-of-things (IoT) sensors are mainstream today, and play a critical role in factories to ensure safety of staff and equipment.
Automated robotic machinery also has its roots in digital innovations being integrated with cutting edge hardware to enable movements in production-lines.
There is still a lot of room for innovation in the industrial sector for digitization and automation. The digital innovation phase in the last 40 years has been quite consumer centric and the industrial sector is yet to see massive waves of innovation. Power generation at large is still running basically on 50 year old innovations and digital innovations can shine new light in this age-old industry.
