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Sunday, July 6, 2014

The business of innovation - where do you start? Posted by: Rashik Parmar Tag(s): Strategy and entrepreneurship








Everyone knows that innovation is essential for survival in today’s business world, however many business leaders struggling to stay afloat find little time for innovation. Fortunately, five new patterns have been identified which show how technology and data can spark new ideas to help leaders find new opportunities to succeed in today’s environment
1.  Augmenting products to generate data
Data generated from within products can improve the product, improve operations, and can also become the basis for new services or new business models. Augmenting products for data can be especially powerful in circumstances where products do not initially generate data but can be modified in some way to enable the generation of data, where data can motivate improvement in product attributes, or where data has the capacity to motivate conception of new forms of business value.
For example, the Pacific Northwest Smart Grid Demonstration Project has introduced smart meters into 60,000 homes across five states. These smart meters are empowering consumers to make educated choices on how and when they use electricity, while also enabling utility companies to better control electricity consumption during peak periods by directly shutting off home appliances.
2.  Digitising assets
Transforming assets from analog to digital can open up new opportunities that were previously unthinkable. Transformation from analog to digital can be most powerful in circumstances where digitisation improves distribution efficiency, widens distribution footprint (for example, shifts from local to global distribution), or enables measurement that supports some other form of value improvement.
Peking University People’s Hospital (PKUPH), for example, is digitising healthcare records and incorporating telemedicine that leverages mobile communications and real-time alerts. The ultimate objective is to monitor patient vital signs in real-time, to support individualisation and responsiveness.  
3.  Combining data within and across industries
Integrating information can unlock new insights by creating value chains that reduce waste and bridge gaps between organisations. Data can be combined to create ecosystem connectivity and promote collaboration, essential for delivery of sophisticated, compelling experiences increasingly demanded by customers.
Ubank in Australia introduced its PeopleLikeU tool, which combines Australian census data with anonymised customer data, to help customers compare their spending habits with the spending habits of other similar people.
4.  Trading data
Translating existing data into information that is of value to other organisations or organisations in adjacent industries can drive substantial value. Specifically, data can inform and motivate new business models across industries, spreading lessons learned, leading practices and inspiration. In so doing, trading data can promote increased convergence between industries.
For example, the Marine Institute of Ireland makes the data it collects on environmental conditions, pollution levels and marine life available to outside parties through a customisable portal.  Data is then used to improve public safety and drive economic activity by improving flood prediction accuracy and enabling more efficient and sustainable seafood and shipping operations.  
5.  Codifying a distinctive service capability
Internal data competencies and assets within organisations can be redirected and transformed into self-standing businesses themselves. The formation of these types of capabilities into self-standing businesses can be particularly successful where data capabilities can be exploited across industry or market contexts, particularly in circumstances where new economic ecosystems are emerging.
A good illustration is Citigroup which developed models to uncover market inefficiencies that hindered its clients’ ability to make the most effective use of payment mechanisms. Citi refined and expanded its models into a set of specific client services under the banner of CitiDirect BE Mobile.
These five patterns provide an ideal starting point for innovation by inspiring initiatives that would otherwise not emerge and by providing focus to discussions in innovation workshops, but perhaps most importantly they overcome one of the most common barriers to innovation – the fear of staring at a blank sheet of paper! New technologies related to data, analytics, cloud and other areas are motivating new and exciting possibilities for new products, new processes and new business models. We are only at the beginning of what promises to be a very different environment for both customers and organisations.

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