For enterprises to succeed in the digital economy they need to become “digital innovation factories” within the next three- to five years, new research suggests.
This means creating and distributing digital products and services with digital-native speed and scale but to also produce software to meet growing customer needs, expectations and experiences.
Rialto Consultancy welcomes this call to action and is already working with a number of clients in this area.
According to International Data Corporation (IDC), software is becoming a “bigger piece” of how every enterprise competes in the digital economy and to guide organisations through this transition, it has published a Future of Digital Innovation framework.
Becoming a digital innovation factory means that while organisations will continue to consume software such as ERP, CRM, manufacturing, finance, human resources, procurement, and other enterprise applications, they will also shift their priorities toward producing software that is embedded in their products and services, to compete in their own industry.
Most of this digital innovation will be focused on creating new value for customers, noted IDC.
“We are now on the future path of digital innovation, where every company becomes a software producer,” Mickey North Rizza, programme vice president, enterprise applications and digital commerce at IDC.
When organisations understand they can completely change their operating model, creating more customer value and optimising their business for success, it completely shifts the strategy and dynamics of their business plan
“The organisations with digital innovation supply chains focused on delivering digital products, services, and experiences will reshape our global economy in the coming years.”
The transition from software consumer to software producer, or digital innovation factory, requires a solid and carefully thought out strategy and execution plan, along with strong skills and substantial agility in IT departments.
To build these capabilities, enterprises need a solid methodology. IDC’s digital innovation supply chain is made up of four equally important characteristic steps: plan; source; develop; and distribute.
Following the digital innovation supply chain enables a very high level of business transformation digitally, as demonstrated by companies that have already begun the journey.
When organisations understand they can completely change their operating model, creating more customer value and optimising their business for success, it completely shifts the strategy and dynamics of their business plan and future vision. But reaching this level of transformation will require a substantial commitment for most organisations, cautioned IDC.
Commenting on the framework, Rialto Consultancy director, Richard Chiumento, said it reinforces how all organisations must now see themselves as tech companies. “And it is imperative that this is recognised at CEO and senior levels if the right capabilities and culture are to be developed to support organisations in the digital age,” he added.
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