Future of Digital Innovation
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The Future of Digital Innovation
We are entering the era of digital business, where enterprises increasingly rely on software to drive internal efficiencies, grow revenue, and achieve other strategic business outcomes.
As organizations build out their digital businesses, they must determine whether to develop software internally, buy off the shelf, or employ a hybrid approach. Ultimately, businesses must take a hard look across all of their product domains and adjust their technology investment strategies to drive sustainable growth and create competitive advantage.
Digital Innovation: A Framework for Success
By 2025, 750 million cloud-native applications will have been created globally, as enterprises increasingly leverage software innovation to drive internal efficiencies, grow revenue, and achieve other strategic business outcomes.
Software-driven products and services can help achieve important business goals, but when that software innovation becomes a value engine, it helps spawn new business opportunities, such as data monetization, new partnerships, and entrance into adjacent markets.
To create value engines, enterprises must build strong technology foundations that enable development teams to quickly and securely build – and iterate on – reliable software. They also need a culture of innovation – with support from the C-Suite. The digital innovation value engine is built on a strong innovation foundation that combinines vision, strategy, and culture.
The flywheel of innovation illustrates how companies can create the self-sustaining process – ideate, design, build, distribute, and measure – necessary to deliver innovative and iterative digital products and services that create and sustain new business.
Value
Innovative digital products and services should deliver value to the enterprise, which can take many forms depending on organizations and their competitive environments.
Invention
Successful digital innovation value engine supports ongoing, intentional invention at scale, an outcome that separates market leaders from the pack.
Differentiation
Takes the form of new capabilities accessible to customers or internal technologies that, for instance, boost efficiency and enable enterprises to operate at lower cost than competitors.
Disruption
Market disruption happens when an innovator offers a new approach that significantly impacts other players in the market and, potentially, in adjacent sectors. Digital innovation can also cause internal disruption to enterprises. While it can create challenges, internal disruption can open up new opportunities and provide enterprises with first-mover advantage in a hyper-competitive market.
While many organizations have already been transitioning from one-time purchase transactions to subscription-based services models, some are now taking the next step. Instead of selling "things" as a service, they're selling outcomes.
The concept is particularly top of mind for younger, digital-centric organizations. IDC found that nearly 40% of digital natives – companies founded after 2005 around a digital deliverable – are planning to shift to an outcomes-centric business model.
Technology vendors can help their customers navigate these business and pricing model changes by:
Anticipating Customer Needs
Vendors are well positioned to anticipate the types of challenges that their customers will face and offer solutions.
Sharing Best Practices
Vendors can share insights from similar customer efforts and offer some best practices.
2021 Digital Innovation Awards Videos
Meredith Whalen – Chief Research Officer, IDC
Nancy Gohring – Research Director, Future of Digital Innovation, IDC
Dan Jeavons – Vice President, Computational Science and Digital Innovation, Shell
Erol Ozguner – CIO, Istanbul Metropolitan Municipality
Meyrick Vaz – Vice President, Strategic Market Partnerships, UnitedHealthcare
Mickey North Rizza – Program Vice President, Enterprise Applications and Digital Commerce, IDC
Sara Govindarajan – Vice President of Technology, Mattel, Inc.
Toine Cleophas – Research Manager, Damen
Al Gillen – Group Vide President, Software Development and Open Source, IDC
Nancy Gohring – Research Director, Future of Digital Innovation, IDC
Franz Hochstrasser – CEO and Co-Founder, Raise Green
Lieutenant Colonel Ryan Riley – Detachment 24, 19th Air Force, Air Education and Training Command
Stein Kjolberg – Global Category Director, Hull Performance, Jotun A/S
Juliana Beauvais – Research Manager, Enterprise Applications, IDC
Nancy Gohring – Research Director, Future of Digital Innovation, IDC