Digital business innovation: IT is the motor, but people are in control

Image of Joachim Hackmann, Principal Consultant at teknowlogy|PAC, digital innovations, a data center in the background

Technologies for digital business innovation such as artificial intelligence and data analyses are enjoying a lot of attention lately. However, it takes talented people to drive the innovations forward and employees who use and exploit the digital innovations. 

People say that data is the oil of the 21st century. I don’t think this image is very appropriate, for everyone knows that oil is becoming scarcer and that there is more data every day. At the same time, data is a raw material that can create added value for companies if it is refined.

For me, this is also the core of digitalization. Creating added value from data with the goal of enabling innovation in order to offer the customer better service or transform employees’ work environment. This sounds as if a lot of technological support is required; and that’s true. But technology alone is not enough. For me, the most important component of digital business innovations is a company-wide culture of innovation, which is why the acquisition, promotion, and development of talent is crucial.

Do not underestimate the human factor

From my point of view, the human factor is still undervalued in digital business innovation. Without question, IT is the motor of digitalization, driven by data. However, experts are in control.

Meanwhile, it seems as if companies believe that they can acquire innovations as finished products. But groundbreaking developments always stem from ideas and the persistence of human beings, and this will remain so in the future. IT technology only supports the people.

The same applies for the incremental improvement of products and processes. This is also part of business process innovation at companies. External advising and procedures such as process mining and best practices are important aids, but decisive for true progress with regard to the processes is frequently how well the company succeeds in incorporating the employees. They can contribute in many ways to providing hints about possibilities for improvement and solution approaches – if you invite them to do this and appreciate them for doing it.

Purchasing technology for digitalization is one of the easiest tasks. Establishing a culture of innovation, by contrast, is one of the most difficult.

Ideas as the result of interdisciplinary teamwork

Interdisciplinary teams can provide an important impulse for a new culture of innovation. For innovations are not just developed in the IT organization or in the incubators established for this. Exciting innovations often arise at the intersections of company departments (such as IT, Marketing, Sales, and Production), where conflicting requirements and desires collide. Frequently, however, things don’t even get this far since the specialized departments live an insular existence and IT is regarded as a costly cross-sectional service. In my opinion, companies should not underestimate the significance of the human factor, and especially of an interdisciplinary exchange of ideas. The ideas thought up, planned, and realized this way are important motivations for the formulation of the digitalization strategy.

For me, a culture of innovation means incorporating as many parts of the company as possible. But it’s also clear that something like this has to develop; it can’t simply be decided or ordered. The accompanying changes in the organization and collaboration require interdisciplinary skills. And this assumes that management is behind these changes, supports them, and demands them.

Technology alone isn’t worth much

Of course technology is indispensable. But here too it applies that technology has hardly any value without well-trained people. Experts have to understand the technology, they must detect its potential for business processes and innovations, and they have to be able to deploy IT solutions strategically in order to complete projects. While access to technology such as data lakes, artificial intelligence, and data analysis is becoming ever easier thanks to cloud computing, companies are having more difficulty finding the experts they are seeking so urgently.

Investment in qualification

That’s why the constant further training of employees is mandatory. On the one hand this is important so that employees do not get overwhelmed and they are in a position to “exemplify” innovations. On the other hand, it helps companies deal with the lack of specialized employees, for they cannot rely on finding the experts they require on the labor market. With this I do not mean traditional teaching, but especially new e-learning offerings based on state-of-the-art applications and services. I believe that a culture of innovation at companies must also be a culture of continuous learning.

Investments in training are of critical importance for companies from my point of view, not just in order to acquire qualified experts, but also to lead employees up to the changes so that they identify with the culture of innovation and regard themselves as a part of it.

Accompanying change and inspiring others

Without a doubt, many companies are being confronted with fundamental challenges. Taking advantage of the opportunities of digitalization means changing the way companies control processes, serve customers, and manage employees. A basis for this is developing a common understanding of the goals and added value of digital initiatives. If employees perceive changes as a threat or a burden, innovations will not have any affect, regardless of how good and groundbreaking they are. Success only results if you succeed in inspiring doubters and non-believers.

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