Business IT Innovation – What, Why, Enablers, and Inhibitors
IT Innovation Definitions for Business
Information technology (IT) is one of the major catalysts of innovation in business. IT innovation enables businesses to have the right information, at the right time, in the right place, at the least cost, and have that key information available faster than the competition. It is information technology that helps businesses transform data into meaningful information to make better and faster decisions. At its core, information technology is all about businesses making better decisions. For businesses to stay competitive they must repetitively leverage innovative IT solutions and do it better than the competition.
To understand the nature of IT innovation from a business perspective, there needs to be a clear understanding of the definitions of information technology and innovation. See definitions below.
Innovation – a Business Definition. From a business or organization perspective, “Innovation . . . is generally understood as the successful introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services” Luecke and Katz (2003).
Definition of IT Innovation – a Business Enabler. Information technology refers to both the hardware and software that are used to store, retrieve, and manipulate information. As a business enabler, information technology is used by businesses to make better decisions. Information technology in itself is of no value to a business unless it can improve decision making. Information technology at its basic level can best be described in terms of input-process-output. Data goes into the IT system, the system processes the data, and outputs information. The business then makes decisions based on the information.
Why is IT Innovation Important to Businesses?
Businesses innovate for the following reasons: efficiency, productivity, quality, competitive positioning, market share, etc. Today’s information technology, properly applied, is the primary enabler to achieve these innovation goals.
Key Concepts and Characteristics of Business Innovation Using Information Technology.
Invention Versus Innovation. Inventions come from new ideas or scientific research. Inventions by themselves are not much value to a business (patents is a separate discussion). On the other hand, Innovation applies new ideas and concepts to solve a real-world problem and to add value to a business and its customers. Innovation is the life blood of a thriving, profitable business. See posting, Segway, Invention Versus Innovation, for example of invention versus innovation.
Information and Decision-Making Cycles. Since my military days, I have always had a passion for figuring out ways to shorten decision-making cycles. In most cases this has involved automating business processes and getting different systems and sensor devices to exchange data on a cyclic or on-demand basis. Now with the advent of the internet with faster and faster bandwidths, the possibility exists for businesses to about eliminate decision-making cycles using real-time data. See posting, IT Innovation Using Real-Time Data – The End of Information Latency, for more on the potential of IT innovation transforming business decision-making processes.
Innovation and Information Design. Information design is critical for business IT innovation. Good information design is what enables information technology to best display information, best help users to understand the information, and best encourages users to make the desired response with the information. Without good information design, any IT innovation effort is doomed to failure. Good information design provides a solid baseline for IT to create innovative, superior solutions for businesses. Find out more about Information Design as a Baseline for Business IT Innovation to include the definition of information design, what is involved in information design, and how to measure the effectiveness of information design for businesses.
Inhibitors of IT Innovation in Business
IT Organizations – Maintainers Vs. Engineers. Many IT organizations and their business partners think of IT organizations as cost centers that maintain systems at the lowest cost. Systems do need to be maintained, but IT organizations are engineering organizations first. They build stuff. If IT is not building stuff, there is no IT innovation. See posting, IT High Priests and the Lost Art of IT Innovation, for more on IT being maintainers versus innovators.
Proprietary Rights and Patents – Inhibitors and Promoters of IT Innovation. One of the major challenges of IT innovation is how to deal with the proprietary rights of the business or person that owns the idea or invention behind the innovation. If proprietary rights are too restrictive, there is the danger of a new product or service either costing too much or not being available to the widest audience possible. On the other hand if proprietary rights are not honored, there is the danger of businesses and individuals not investing in new technology and ideas as they quite rightly fear that their investment will not be protected. See posting, Proprietary Rights – an Inhibitor or Promoter of IT Innovation?, for how proprietary rights both inhibit and promote innovation.
Enterprise Software Innovation – From Hard-Coded to Openness Enterprise software in its day was innovative helping to automate enterprise business processes. Now is the time for enterprise software to shed its proprietary nature. The Cloud or more features will not make enterprise software innovative again. Enterprise software needs to evolve into something more modular with modular-level Application Programming Interfaces (API) that can interface with external applications. Businesses cannot afford to be chained any more to one mammoth, hard-coded application that is supporting last year’s business processes. Innovation is focused on change to leverage new business opportunities. Businesses need the ability to cost-effectively use enterprise software in whole or in part to interface with other applications and software services that best meet the needs of the organization. See posting, Is Enterprise Software Killing Innovation?
