CSE1720 Week

CSE1720 – Business Information Technology and Systems

Week 4

Innovation

CSE1720 Lect / 2

Innovation

• Remember this period ?

• When a runaway stock market would automatically mean that any business model utilising the Internet would receive venture funding ?

• When double digit growth rates were ‘normal’

• When rising paper wealth was the trigger to mergers and acquisitions ?

CSE1720 Lect / 3

InnovationWhat is today’s scenario ?

Businesses have, or are, cutting costs

Downsizing Offshore IT development Offshore IT Management Re-engineering

CSE1720 Lect / 4

Innovation• Growth depends on the ability of business to ‘innovate’

• Innovation is not now seen as a ’research and development’ specialty

• Innovation has become part of the ‘advanced tools and techniques’ and is a core component of all parts of of an organisation, and its business networks (including partners).

CSE1720 Lect / 5

Innovation• Knowledge management technology is aimed at

capturing and digitising the past

• Innovation management technology helps businesses to categorise and create the future

CSE1720 Lect / 6

Innovation• Bellon and Whittington (‘Competing Through Innovation

– Essential Strategies for Small and Medium Sized Forms, 1996) define 2 types of Innovation

1. Incremental

2. Radical

CSE1720 Lect / 7

Innovation• Innovation can be

Taking what exists now and improve, expand or extend it – business models, processes, services

Or – Moving into a ‘new’ environment

Or in a Business sense, using today’s assets and creating future assets

CSE1720 Lect / 8

Innovation

• Could it also mean this

‘A Solution which identifies and addresses the unmet needs of customers’

‘A Process for improving or finding a better way of doing things’

CSE1720 Lect / 9

Innovation• Peter Drucker (mostly referred to a ‘Drucker’) said in

1985

‘Innovation is fundamental to profit’

And

‘The essential purpose of business is to create a customer’

Marketing and Innovation produce results

Other activities are part of the cost of ‘doing business’

CSE1720 Lect / 10

Innovation• Druckers ‘Seven Sources for Innovation Opportunities’

1.The unexpected – product/service failure or outside event

2. The incongruity – the gap between what is and what should be

3. Process needs (process gaps or bottlenecks)

CSE1720 Lect / 11

Innovation4. Structural change (industries or markets)

5. Demographics (population, education, income changes)

6. Mood swings (in or out, acceptable or not)

7. New knowledge (scientific, technology advances)

CSE1720 Lect / 12

Innovation• One approach

Retain existing customers

Making these customers more profitable

Gain new customers

CSE1720 Lect / 13

Innovation• ‘Intellectual Capital’

The sum of everything everybody in a company knows gives ‘Intellectual Capital’

Two stages of Innovation – Upstream and Downstream (J.P.Deschamps)

Upstream process senses and creates Innovative opportunities

Downstream converts an innovation into some form of capital (a business model)

CSE1720 Lect / 14

Innovation• Fundamentals :

Road Mapping

Scanning

Collaborating

Sparking

Shepherding

CSE1720 Lect / 15

Innovation1. Road Mapping

Assists to define and project the business direction

Identifies a Start Point

Leads to multiple destinations, alternative routes

Puts the ‘big picture’ overview

CSE1720 Lect / 16

InnovationIdentifies where ‘spin offs’ could occur

Communicates ‘where we are now’

and ‘where we could go’

CSE1720 Lect / 17

Innovation2. Scanning

Defines the scale and shape of a business

Provides a base for building and refining its scope

Should include internal and external activities – e.g. competitors, business partners

CSE1720 Lect / 18

Innovation2. Scanning

Includes Key Performance Indicators

Comparisons with external benchmarks of peers (competitors)

Requires a monitoring system – assists in detecting unscheduled/unplanned events or conditions

CSE1720 Lect / 19

Innovation2. ScanningAssists in detecting abnormalities

Provides time and strategy to react

Depends on ‘event management’ - the recognition of events inside and outside a business which could be considered to have a significant impact - both positive and negative

The monitoring system must identify and send details of positive and negative events for analysis and action

CSE1720 Lect / 20

Innovation3. Collaboration

Innovation is normally a ‘group effort’

Groups may be employees

May also be business partners

- customers, suppliers, investors

And yes, there probably will always be an individual who can produce innovation

CSE1720 Lect / 21

Innovation• Collaboration depends on the ability to

- Identify common goals- Share data and Information- Capitalise on innovation collectively and

individually

The Collaboration Process identifies mood swings and introduces new knowledge

CSE1720 Lect / 22

Innovation3. Sparking

The process of receiving input from many sources and processing it to start or to initiate innovation

Sources: Employee suggestions, customer feedback, marketing surveys, ‘focus’ groups, brainstorming

It is about paying close attention to consumers – how they respond, act, appear, interact

CSE1720 Lect / 23

Innovation4. Shepherding

Abandoning an asset is counterproductive

Identified Opportunities must be carefully shepherded to reach their potential and to deliver value

Every idea and concept needs to be carefully managed for potential and actual realisation

CSE1720 Lect / 24

InnovationA Gartner Research study indicated that innovation

management products can be identified in 5 categories:

1. Ideas management

2. Innovation life cycle management

3. Product development management

4. Environmental innovation management

5. ‘Outside the box’ innovation management

CSE1720 Lect / 25

Innovation• What are these ?

Ideas Management stimulates, captures, evaluates and qualifies ideas

It creates a method of processing ideas in a structured manner

Innovation Life Cycle management coordinates the Innovation life cycle from the ‘vision’ stage to ‘reward’ stage (individuals or workgroups)

CSE1720 Lect / 26

Innovation• Product Management Management supports the

realisation of a product or service deliverable after an idea has been chosen for commercialisation

• The technology assists the production life cycle from design stage to release.

• Environmental Innovation Management

The measurement and degree of certainty of the environment into which a product or service is delivered

Is this ‘new’ or is it the upmarket application of systems Installation ?

CSE1720 Lect / 27

Innovation

• ‘Outside the box’ innovation management

Risk analyses, cost management, cost containment

Return on Investment

Rate of Return of Investment

CSE1720 Lect / 28

Innovation And a few connections :

• innovate(verb) - to bring in something new

- to make changes in anything established

• nova (noun) - a star which suddenly emits an outburst of light, sometimes seen by the naked eye as a star

• novation (noun) - the substitution of a new obligation for an old one. The introduction of something new.