Systems Strategy and Management
Abstract
This report takes a comprehensive approach to examining how information technology (IT) enables services and products through IT strategies for service and product innovation strategies. By reviewing recent studies, the report argues that changes in technology have not only led to the industrialization revolution but also playing a leading role in creating new possibilities for firms from across the globe. Two IT-centric innovation strategies are explored, one for products and the other for services, respectively: product and technology development and technology-driven best practices in service development. The first strategy requires product and technology developers within the organization to collaborate and develop a two-track approach, which is interactive and facilitates the innovation as an incremental process. With these tracks, the firm can generate, evaluate, and integrate ideas by engaging in the prototyping and piloting processes. The second strategy involves four steps, which revolve around the gathering all the facts through the use of advanced ICTs, getting technology and service developers together, staying ahead of the design and competition curve, and early and frequent prototyping. The report demonstrates how these IT-driven strategies help with the innovation and commercialization of the right products and services.Introduction/Overview
Although firms from across the globe make massive investments of their management money and time, empirical evidence has shown that innovation remains one of the frustrating pursuits for these companies. Innovation programs and associated initiatives often fail, while at the same time, successful innovators having a hard time when it comes to sustaining their performance (Jofre 2011, p. 3). According to Pisano (2015), companies have difficulty building and maintaining their capacity to innovate because they lack effective innovation strategies. Strategy tends to mean different things to different people, but the majority of organizations consider it as a change-driven plan of action. In his recent study, Jofre (2011, p. 5) define strategy as the various means or methods through which organizations or individuals plan and accomplish their objectives. With this functional definition, innovative strategies revolve around five Ps: plans, ploys, patterns, perspectives, and positions. For instance, a ploy refers to tactics used by a given firm to outcompete their competitors, while perspectives involve a firm’s ability to utilize abstract ideas as a way of achieving and maintaining competitive edge.
Every service provider or manufacturer should be in best possible position to identify, define, and implement an effective approach to innovation. To achieve this, the organization should integrate information technology (IT) into its product and service development processes. In essence, technology-centered innovation should remain a core value for any given company in the present-day society because it goes a long way in benefitting firms in broad range of ways. For instance, product and service innovation leads to increased brand equity, larger returns, broader consumer base, as well as faster technology adoption (Storey et al. 2016, p. 30). Consequently, this paper discusses two IT strategies for service and product innovation in different business enterprises: product and technology development and technology-driven best practices in service development.
2.0. Main Report
2.1. Product and Technology Development
Product development and technology development tend to be two different processes, however, both occur in parallel and remain interdependent and interrelated. Through technology development, a firm invests in the whole process of developing multiple approaches tasked with the responsibility of overcoming a given problem. Typically, technology development requires companies to generate, evaluate, and integrate ideas by engaging in prototyping and piloting (Goiedhuys & Veugelers 2012, p. 521). On the other hand, product development revolves around developing and implementing the best solution. To ensure the success of this IT strategy for product innovation, the firm establishes how product and technology development work together. One way to achieve this involves creating separate but parallel or interdependent tracks for these processes (Casey & Goldman 2010, p. 176). In particular, the company uses the technology development tract to identify and explore alternative solutions necessary for addressing specific technological challenges or problems. With the resulting solution, the company stores nuggets of information for later or future referral. On the same note, the firm utilizes the product development track to create new or enhanced products and product lines.
According to Goiedhuys and Veugelers (2012, p. 521), the interaction of the two tracks presents the organization with the opportunity to add value to its product offerings. As they interact, product development engineers and technology developers draw from the technological advancements and learn about the various challenges faced by individual product developers, respectively. The interactive process, in the view of Storey et al. (2016, p. 31), plays a leading role in enhancing the time-to-market, products’ performance, as well as cost effectiveness. For example, Swagelok Company has so far responded to the demand in the competitive and volatile semiconductor market by developing one of the new or modern ultrahigh-purity diaphragm valves (Peace 2011). To attain this, the company’s technology development team worked on a wide range of new assembly, as well as sealing methods, which were used in valves. Given the interaction between product and technology developers, the firm succeeding in developing and commercial a new and customer-centered valve, which, in turn, met market demand.
Another of the examples of successful product innovations attributed to the interactive aspect of product and technology development processes involves Corning, one of the world’s leading manufacturers of specialty components, especially those used in life science instruments, electronic displays, environmental products, and telecommunication systems. Pisano (2015) reports that the company has a well-established research and development (R&D) laboratory, which helps with enhancing the firm’s IT aspect. Corning’s five innovation steps (Table 1) comprise road-mapping and building knowledge, determining feasibility, proving profitability, testing practicality, and commercialization and continuous improvement (ASQ 2019). Moreover, Corning has and continues to invest a great deal of its resources in basic research as a way of developing the right products. In this respect, collaboration remains a prerequisite for the strategy’s success. For instance, individual product developers play a fundamental in the identification of opportunities and associated problems necessary for technology development. In other words, the two-track approach acknowledges and appreciates innovation’s incremental nature by ensuring major advancements in IT lead to the development of quality products.
Table 1: Stages of Corning’s Innovation Process (ASQ 2019)
Corning’s Innovation Process
Stage/Step 1
Stage 2
Stage 3
Stage 4
Stage 5
Building knowledge
Determining feasibility
Testing practicality
Proving profitability
Managing the cycle/commercialization and continuous improvement
2.2. Technology-Driven Best Practices in Service Development
Service companies often realize or achieve innovation through a variety of technology-driven activities, including market research, customer requests, as well as internal idea generation, meaning just a few business organizations discover their innovative solutions by accident or chance. In essence, IT allow service providers to invest in creating and maintaining a balance between consumer- and market-oriented or driven innovation efforts (Li, Li, & Su 2018, p. 3317). Technological changes serve as the premise of service innovation and revolution in the present-day corporate world. For example, the Internet, wireless devices, including phones, telecommunications, as well as computers have and continue to create opportunities and open new possibilities in the form of service innovation (Moritz 2018, p. 27). By integrating modern information technologies into their market research, companies identify broad market gaps or needs and associated demand, which, in turn, play a pivotal role in driving innovation and differentiation (Gebauer, Gustafsson, & Witell 2012, p. 1276). IT allows business organizations to know where to devote their resources as a way of supporting organizational goals designed for developing new services.
IT enhances the customer-company interactions. In this way, existing customers and potential consumers bring a variety of specific problems, which the company in question remains tasked with the responsibility of finding sustainable solutions. In their recent study, Hsueh, Lin, and Li (2010, p. 1729) established that customer requests obtained through modern data or information collection technologies serve as an external force, which drives service innovation. IT helps with promoting open, as well as clear communication between companies and customers, which, in turn, contributes to success in customer-driven service innovation. Technology-centered service development strategy requires the company to follow four best practices, which revolve around effective communication, Table 2.
The first step in the strategy involves gathering all the facts. According to Peace (2011), the whole process of creating a desirable solution for customers require a firm to gain a deeper understanding of their customers’ real needs and associated tastes and preferences. To achieve this, the organization utilizes new technologies to engage consumers in a series of question-answer sessions. The business organization should not necessarily focus on responding to customer requests, but rather invest in asking in-depth questions as a way of clarifying the context. For instance, service developers can ask customers why they need the requested service, in addition to how it fits into the much-needed complete system. Besides these questions, the firm can ask what alternatives have so far failed or worked for their clients, as well as what processes in the development and commercialization stages affect performance of a given service (Jofre 2011, p. 67). With the help of effective information communication technologies (ICTs), information captured from these questions give the firm comprehensive insight into revealing and implementing a more complete, unique, and customer-centered service innovation as opposed to simply fulfilling their consumers’ initial requests.
The second step revolves around utilizing available resources to get technology and service developers together. Through the adoption and integration of appropriate IT, the firm uses open communication as a way of identifying the best possible solutions necessary for customer-centric service development. Typically, most customers prefer sharing their initial request with salespersons or marketers (Moritz 2018, p. 25; Cummings & Daellenbach, 2009, p. 254). In this way, these parties find the opportunity to facilitate collaboration or high-level cooperation between technical teams on service and technology development.
Collaborations serves as a prerequisite for the proper or effective handoff of information, while at the same time, encouraging peer-to-peer communication, a precondition for the adoption and implementation of relevant solutions. In essence, this innovation strategy allows the company’s engineers to use their knowledge in technology to share application knowledge with other players during the service development process. With the shared information, the company identifies and addresses challenges in the service design cycle (Moritz 2018, p. 17). Concisely, bringing people together presents the company with the opportunity to use the same or standardized language, which, in turn, goes a long way in encouraging information sharing, as well as brainstorming and efficiency.
In addition to getting the key players together, the business organization should invest in staying ahead of the design and competition curve. In other words, the firm’s technology should focus on meeting future requests of their clients by taking a proactive approach to exploring potential market opportunities and associated applications (Peace 2011). One of the effective ways to successfully structure the already identified proactive efforts revolves around creating separate service and technology tracks as stated and discussed earlier. The ability to develop solutions necessary for addressing specific problems witnessed within emerging technologies before receiving customer demands or requests allow individual developers to apply them when needed (Pisano, 2015). In doing so, the firm responds not only effectively but also quickly to the various customer needs by developing and commercializing the right service.
Then final of the technology-centric service development strategy involves prototyping early and often. According to Peace (2011) and Gebauer, Gustafsson, and Witell (2012, p. 1274), service developers should be in a position to develop early prototypes both for individual and all components of new services. Early and frequent prototyping goes a long way in enabling developers to focus on testing and refining the various aspects of their service before necessarily identifying problems with the new service at a later stage. The ability to prototype early creates opportunities necessary for making adjustments without undertaking any major overhaul or change (Moritz 2018, p. 237). Accordingly, such early prototypes decrease innovation costs, shorten development time, and ensure the introduction of quality services.Technology-centric service development strategy
Table 2: Steps of the Technology-Centric Service Development Strategy
Technology-Centric Service Development Strategy
Step 1
Step 2
Step 3
Step 4
Gathering all the facts through ICTs
Getting technology and service developers together
Staying ahead of the design and competition curve
Early and frequent prototyping
3.0. Conclusion
In summation, it is evident that every service provider or manufacturer should be in a position to identify, define, and implement an effective approach to innovation. However, available evidence has shown that this is achievable only with the integration of information technology (IT) into the product and service development processes. In this respect, firms from across the globe use a variety of IT innovation strategies as a way of developing and commercializing quality, unique, and customer-centric products and services. In this context, the first strategy, product and technology development, requires product and technology developers within the organization to collaborate and develop a two-track approach, which is interactive and facilitates the innovation as an incremental process. With these tracks, the firm can generate, evaluate, and integrate ideas by engaging in the prototyping and piloting processes. In this way, the product and technology developers identifies the best solutions, addresses development challenges, and focus on creating and introducing new or enhanced products and product lines.
In the second IT innovation strategy, the technology-centric service development strategy, the business organization is required to follow four best practices, which revolve around effective communication and action. The first step in the strategy involves gathering all the facts through the use of advanced ICTs, including computers, the Internet, and wireless devices, such as mobile phones. Second, the organization utilizes available resources to get technology and service developers together. Then third step involves staying ahead of the design and competition curve. Finally, the organization is expected to invest in early and frequent prototyping. Given the role of these two innovation strategies in enhancing the development and commercialization of the right or customer-centric products and services, it is evident that IT enables products and services.
Reference List
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