Digital Innovation Factories for Resiliency
Digital bridges maintain connectivity between businesses and their customers, especially in a world still battling the COVID-19 pandemic. Now, enterprises need to become “digital innovation factories” that create and distribute digital products and services with digital-native speed and scale.
IDC published the Future of Digital Innovation framework which defines the transformation into a digital innovation factory. While organizations continue to consume software such as ERP, CRM, manufacturing, finance, human resources, procurement, and other enterprise applications, most of this digital innovation will focus on creating new value for each business’s customers.
IDC program vice president for enterprise applications and digital commerce Mickey North Rizza explained that “the digital economy is changing how we do business at a fundamental level, with or without a pandemic.” She said “this transformation impacts business at every level.” Rizza also said, “the digital enterprise has different expectations for its software and, more importantly, its software vendors.”
Moreover, “Millennials represent a rapidly growing percentage within organizations and are partial to consumer-like experiences in their software and use of mobile technologies,” she said. “Vendors must invest in modernizing their user interfaces (UIs) and enhancing their mobile functionality.”
Building digital IT infrastructure that supports resilient operations and pervasive experiences is becoming a key priority. Organizations in India are re-strategizing their IT spending plans to include the acceleration of their investment in an agile cloud infrastructure. This is part of their solution to the challenges arising from the spread of COVID-19.
Based on an IDC COVID-19 impact survey, more than 60% of Indian organizations now plan to leverage cloud platforms for digital innovation.
“Cloud continues to be the underpinning platform for all digital transformation initiatives,” according to IDC India principal analyst for cloud & artificial intelligence Rishu Sharma. She added that strategic investments in technology are “imperative to minimize the adverse impact and make businesses more resilient.”
Becoming a digital innovation factory
IDC offered advice to help companies that were traditionally been tech buyers in adapting to this shift:
- Embrace the growing requirement to create a “digital innovation factory” capability within your own organization – your organization’s competitive advantage and future viability are depending on it.
- Don’t reinvent the wheel. Look to existing peer examples of the many models and pathways for creating your own digital innovation supply chain. From planning to developers to sourcing pathways to distribution, there is a multitude of avenues for success. There is also an abundance of research and advice to help you with the right strategy and execution.
- Invest in your software development skills. This is a requirement that will mandate executive sponsorship (potentially all the way up to the board) and will require heavy investment. Expanding your development team may require the company to rethink existing policies including how and where developers are hired, and how they are grown and groomed internally. Failure to invest here may, long term, be a death sentence for many organizations.
- Move with urgency. By 2023, over half your competitors – the most capable ones – will be setting the competitive standards for product/service functionality, customer experiences, the pace of innovation, and scale of distribution.
- In order to remain competitive, your organization will require strong internal digital innovation capabilities, built around the new planning, sourcing, development, and distribution models and processes. This will be the “new normal” in the increasingly digitized economy.
Advice to vendors
Vendors, according to Rizza, must “invest in micro-services that provide the ability to create highly maintainable services that can combine to form large applications dynamically.” They will also need to “provide cloud-based ERM applications” which are “projected to account for more than 65% of the market in 2024. Vendors must build out the functionality of their cloud products to benefit from the wave of cloud adoption.”
They must “provide better data visualization to find key insights to meet the “demand from end-users to have better data visualization tools.” Vendors must also “ensure highly flexible reporting and analytics,” she added. They must bbring in AI and predictive analytics capabilities that save time by modeling data to reveal value-added insights that make reporting and performance monitoring and selecting the right outcomes easier.
Vendors must also create intelligent workflows “to unleash the full power of artificial intelligence,” and prioritize the user experience in a uniform way. More emphasis, she said, should be placed on the ecosystem, with vendors being “aggressive in building out their partner ecosystem to include other related enterprise applications.”
Rizza told said small and medium-sized businesses are “on the rise,” and that these enterprises “almost exclusively choose public cloud offerings.” Her advice to vendors: “The more workflows an organization can digitize with your products or your partners, including low code/no code, the more an organization will stay with you for the long haul.”
She also explained that “digitally enhancing your business through enterprise cloud applications brings long-term customer engagements in the Future of Digital Innovation while also increasing market share.”