The New Innovation Process of a Firm Undergoing Digital Transformation in Industries
The firms undergoing digital transformation ( henceforth “ DX ”) in industries need to change their processes as one of the business factors driving the DX . 1 A survey on DX reveals that one of the major factors making digital business different from non-digital business is culture and mind set . 2
At the back of culture lies process . The process changes , which reveal concrete changes of culture , can be a subset of cultural change . 3 The purpose of this paper is to clarify the characteristic of the new innovation process of firms undergoing DX in industries , to raise management issues related to reducing conflicts of the process with other elements of the management system and to offer recommendation on the Industry IoT Consortium ’ s ( IIC ’ s ) strengthened role in supporting firms ’ new innovation process .
Here , innovation processes means innovation processes of the end user firms . The end user ( henceforth “ EU ” or “ user ”) is a DX firm that deploys and operates IIoT solutions found mostly in asset-intensive industries such as manufacturing , smart city , health care , agriculture , energy , transportation and retail . The firm is a customer of an IIoT solution provider ( henceforth “ SP ” or “ provider ”).
EUs , who operate mostly with industrial goods and services , need to adopt a new innovation process to integrate IT and OT . Let ’ s take an example of manufacturing process innovation of a manufacturer , as an end user . EUs ’ dominant innovation process is likely to be OT-focused , implemented by OT workers with hardware-focused engineering knowledge . Because of the rising share of IIoT technology , the operators need to integrate OT with IT . The existing process focused on OT would be a slow and closed process , not effectively utilizing innovation opportunities from fast integration of IT and OT .
Benchmarking best innovation practices , EUs could emulate currently popular innovation frameworks , of the IT firms , including lean startup , design thinking and other agile method . These frameworks , would be useful to a limited extent . The main reason is that the environment of the firms in industries are different from software world where existing popular frameworks originally had been created .
1 Morrish , J ., Zarkout , B . ( ed .) ( 2020 ) Digital Transformation in Industry White Paper , with A . Ferraro , C . Lim , S . Lin , J . Morrish and B . Zarkout as authors , Industry IoT Consortium : Boston .
2
Kane , G . C .; Philips , A .; Copulsky , J .; Andrus , G . ( 2019 ) The Technology Fallacy . The MIT Press : Cambridge , Massachusetts .
3 Levy , A . ( 1986 ) Second-order planned change : Definition and conceptualization . Organizational dynamics 15 ( 1 ): 5- 23 .
IIC Journal of Innovation 3