Digital Innovation or Transformation
Alan Ting
– September 11, 2017
Alan Ting is an experienced IT business innovator based in Singapore.
Digital Transformation is a new buzzword in town and sometimes we hear customer talking about Innovation and how it peg to net return value and productivity gain. To begin with, is productivity a correct measurement is subjective and depend on the industries. In addition, transformation and innovation is different. Digitization can start with Innovation or Transformation, more importantly, organization need to an audit and define the baseline. What do have? What is the problem to solve? New business case?
One point to note is that transformations take time, we are talking about taking existing system and transform it, defining new or eliminate process and multiple iteration. Adoption of transformation is also a challenge not just from technology angle but in human capital as well – untrained and retrain staff to new way of doing things. Innovation, on the other hand, is usually fast and create disruption and value.
Transformation – usually can be measure by productivity gain; while Innovation usually create (new) value.
Innovation requires encouragement, collaboration, and communication, but it typically implies clear steps that must be taken—it’s the start of something great. What happens after is transformation—the implementation process following that first spark of innovation. It also suggests an eventual end once the transformation has been completed.
Break the Defactor Standard
Innovations drive changes and make changes to the norm. Enterprises that leverage the power of platform business models have grown dramatically in size and scale over the past decade. No longer the sole domain of social media, travel, books or music, platform business models have made inroads into transportation, banking and even healthcare and energy. Platforms are now active in North America, Europe, Asia, Africa and Latin America. Some platforms are household names such as Amazon, Apple, Google and Alibaba. Platform ecosystems are gaining ground through the digitalization of products, services and businesses processes and in the process are reshaping the global landscape.
Innovation is the rethinking business process/model that already exists. Essentially, once a transformation is realized and the new reality is established, innovation describes when those norms are again challenged. For example, after social media reshaped social communication dynamics, various other accepted norms such as news, entertainment, recreation, content, and business had to change.
Market Ecosystem Through Transformation
Transformation describes those ongoing processes that happen in the world after innovation enters the scene. Alibaba is a great example of a transformative company. Today, the e-commerce website is highly recognizable and easy to use. Alibaba has undergone constant revision, optimization, and reconfiguration to deliver better service and fast access to the site during peak hours. Alibaba has allowed users to reliably search for what they need, and, in doing so, has provided businesses with the tools needed to reach their audiences.
Finally, there is the matter of governance of the digital ecosystem, which considers who has access to the platform, how to divide value between ecosystem users, and how to resolve conflicts or manage sometimes increasingly divergent objectives (online/offline). Policies must ensure value creation and also high-quality participation on the digital platform. While traditional business models lead managers to frown on giving product or services away for free, such practices can be highly successful from a digital platform perspective, especially when one side of a market is needed to attract the participation of another.
