Innovation and IS Kieran Mathieson

What is Innovation?  Long definition Successful innovation is the creation and implementation of new processes, products, services and methods of delivery which result in significant improvements in outcome efficiency, effectiveness or quality.  Short definition Ideas that work.

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS

Why Innovate? Product’s total value to the customer Replicable value (competitors can reproduce this value) Unique value (competitors can’t reproduce this value)

Basis of Competition? Unique Replicable Which one would you rather compete on?

Compete on Replicable Value  This is cost competition  A race to the bottom (price)  Competition based on production and distribution processes  Attractive strategy when you have natural cost advantages  But:  A competitor beats you on cost, even just a little  Demand for the class of products changes

Compete on Unique Value  Your price can reflect the value that only you can add  Value-added can compensate for cost disadvantages  Example: IBM

Sources of Unique Value  Legal protection  Patents  State monopolies  Market domination  Monopoly  Product perceptions  Innovation Expiration, new technology Political trends Vulnerabilities Legal action, privatization, new tech Counter promotion (e.g., generics) Must be continuous Innovation lets you offer customers real value that others cannot replicate.

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS Steven W. Popper and Caroline S. Wagner, New Foundations for Growth: The U.S. Innovation System Today and Tomorrow - An Executive Summary, 2001

National Innovation System  A nation with innovative companies:  Generates more economic value for its citizens  Don’t need to pay starvation wages to compete  Will be less vulnerable to international competition  Innovation barriers replace trade barriers  Innovation needs support from both the public and private sectors

Government Policies  Resource availability  Natural resources  Education and training  Basic research (from universities and others)  General policies encouraging innovation  E.g., tax credit for research expenses  Focused policies in growth areas  Data – access to government databases

Government Policies  Regulatory and budgetary environment  Intellectual property protection  National standards  Infrastructure, e.g., Wireless Oakland  Partnerships, e.g., university/industry  Encourage innovation in the public sector  Measure national performance

Government Policies  Communications  Coordination within the public sector  Agencies should work together to encourage innovation  Promotion to the general public  E.g., why they should expect continual training  Promote nation’s support for innovation to companies in other nations

National Innovation System  The bottom line: Nations can encourage or discourage innovation within their borders. This can affect the quality of its citizens’ lives.

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS Geoff Mulgan and David Albury, Innovation In the Public Sector, 2003

A Model

Generating Possibilities  How can we stimulate and support ideas for innovation?  Only about half of all innovations are top down  Pay attention to users, frontline staff and middle managers  Exploit employee diversity  Constant scanning – part of many jobs  Work backwards from goals  Create time and space  Breaking the rules  Competition between employee teams

Incubating and Prototyping  What mechanisms help develop promising ideas and manage attendant risks?  Good ideas are easily killed by existing bureaucratic procedures  Select innovations for development, and give them some slack  Prototyping and piloting  Incubators – separate organizations  Modeling and simulation  Involve end users

Replicating and Scaling Up  How can we promote the rapid and effective diffusion of successful innovation?  Incentives  Opinion leaders  Use project management methods

Analyzing and Learning  How should we evaluate what works and what doesn’t to promote continuous learning and improvement?  Metrics for success  Peer and user involvement in identifying lessons  Identify inhibitors

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS

Barriers to Innovation

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS Geoff Mulgan and David Albury, Innovation In the Public Sector, 2003

Innovation and IS Change Resources People Processes Products IS People Processes Products IS Things Being Changed IS help change occur IS are changed

Generating Possibilities  KM – gather and disseminate information about the industry, products, processes, etc.  Easy access to information sources  Research papers, databases, …  Virtual communities  Can be global  Gathering feedback from customers, frontline staff, etc.  Surveys, “Contact us” forms, Web usage data, …

But…  IS can obscure work processes  Processes are out of sight  Few people know enough about them to generate ideas for improvement  not as rich as face-to-face

Incubating and Prototyping  What mechanisms help develop promising ideas and manage attendant risks?  Simulation software helps people evaluate and improve ideas  Some software models can serve as prototypes  E.g., ATMs  Evaluate users’ responses  Easier communication with potential end users

Replicating and Scaling Up  How can we promote the rapid and effective diffusion of successful innovation?  Monitor use of innovations  Communication  Project management tools  But …  IS can be costly and time consuming to change  Resistance to deskilling and other effects of IS

Analyzing and Learning  How should we evaluate what works and what doesn’t?  Automate measurement  Make project data available to all  Communication

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS

SDLC

Prototyping

Prototyping Technology

Outline  Why Innovate?  National Innovation System  Innovation in Your Firm  Barriers to Innovation  IS and Innovation  Developing IS