How Do You Become a Digital Innovation Factory?

How Do You Become a Digital Innovation Factory IBM MSP Hub Blog Image

Software is becoming an ever-bigger piece of the many ways in which every enterprise competes.

That’s the unbiased opinion of the very latest report from the International Data Corporation, which provides a perspective on the future of digital innovation and the digital innovation supply chain.

Enterprise is shifting from a pure software consumer of applications in 2018 to a software consumer and producer of applications by 2025.

As more IT spending is directed toward digital innovation to enhance new enterprises, the end result is an explosion in new digital apps and services.


IDC Reports and Technology Innovation

The International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets.

With more than 1,100 analysts worldwide, its analysis and insights help IT professionals, business executives, and the investment community make fact-based technology decisions that lead to achieving their key business objectives.

‘The Future of Digital Innovation: Every Enterprise Must Become a High-Performance Software Producer’, as we’ve come to expect of IDC’s reports, is full of timely and insightful fact-based research on the emerging topics and technologies that can help you maximise your and your clients’ competitive advantage.

And IDC predicts that within the next 3-5 years, every enterprise – regardless of industry – will shift into becoming a “digital innovation factory”.


Digital Innovation is The Future

“We are now on the future path of digital innovation, where every company becomes a software producer.”

Mickey North Rizza, Programme VP, Enterprise Applications and Digital Commerce, IDC

Today’s CEOs and business leaders are currently in the middle of a seismic shift in the way organisations view and use their business technology.

The shift entails not only continuing to consume business critical software – such as CRM, finance, HCM, procurement, and other enterprise applications – but also involves producing software that meets growing customer needs, expectations, and experiences.

In other words, while companies will still consume software from technology vendors, the need to produce their own software will become increasingly essential to the success of their business.

It’s no longer acceptable to just consume software.

You must be producing it as well.

Which means enterprises need to learn how to remain competitive in the digital economy by becoming a “Digital Innovation Factory” that produces software as well as consumes it.


The “new normal” in an increasingly digitised economy

“The organisations with digital innovation supply chains focused on delivering digital products, services, and experiences will reshape our global economy in the coming years.”
Mickey North Rizza, Programme VP, Enterprise Applications and Digital Commerce, IDC

By 2023, more than half of the world-wide economy will be digitally driven.

In order to remain competitive, organisations will require strong internal digital innovation capabilities, built around the new planning, sourcing, development and distribution models and processes.

The transition to a ‘new normal’ requires a strong and carefully thought out strategy and execution plan, along with strong skills and substantial agility in the IT department.

And IDC predicts enterprises’ ability to rapidly develop their own digital innovations will be a core competitive requirement.

Software production is far from easy and requires a framework, guidance, resources and pathways to not only help plan, source and develop it, but also to distribute it as a revenue generator.

Even so, many enterprises are already on the journey to transitioning into prolific software producers, creating and distributing digital products and services with digital-native speed and scale.

Enterprises simply need guidance throughout this period of transition with a solid methodology that encourages digital innovation.


Enterprises as Digital Innovation Factories

The necessary changes required can be daunting, but it can also pave the way for a successful success for an organisation in the digital economy.

For companies that have traditionally been tech buyers, IDC offers some advice in becoming comfortable with the inevitable shift precipitated by a rapidly growing digital economy.

• Embrace the growing requirement to create a “digital innovation factory” capability within your own organisation – your organisation’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 are 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 organisations.
• 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, pace of innovation, and scale of distribution.


Further Support – the Digital Innovation Supply Chain

IDC’s extensive research on the digital economy has led to the creation of methodology called the Digital Innovation Supply Chain (DISC).

The DISC methodology enables a very high level of business transformation digitally.

Through planning, developing, sourcing and distributing proprietary software, this framework helps companies become industry leaders within the new digital economy.

When organisations understand they can fully change their operating model, it completely shifts the strategy and dynamics of an organisation’s business plan and future vision.

While optimising for success, the main focus is on creating new value for their own customers with digitally enhanced product offerings and services.


Open Innovation as Competitive Advantage

The digitally innovative enterprise has arrived and is working towards a digitally enhanced experience both for itself, its customers, and potentially new clients seeking for its software capabilities and services.

New technology will be developed in-house to support operations internally and fulfil the move from a manual long tail business process to a digital one, enhancing the organisation’s operations and profitability.

But other forms of new technology, also developed in-house, will be embedded into the organisation’s own products, to both gain a march on competitors while also offering supporting services to paying clients within their own industries.

Do you and your clients want to make sure you’re amongst the innovation players?

Then follow our articles, videos and infographics highlighting the multiple examples of innovation taking place every day in our rapidly transforming world.

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