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 Innovation What 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 Innovation 4. 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 Innovation 1. 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 Innovation Identifies where ‘spin offs’ could occur Communicates ‘where we are now’ and ‘where we could go’

CSE1720 Lect / 17 Innovation 2. 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 Innovation 2. 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 Innovation 2. Scanning Assists 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 Innovation 3. 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 Innovation 3. 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 Innovation 4. 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 Innovation A 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.