May 13, 2019

In the last decade or so, most of the world’s largest and most-established companies have experienced greater competition and turbulence than ever before. Agile startups entered the game and started eating into market share with innovative new services and new business models. The ability of startups to offer compelling user experiences meant that they’ve been able to aspire to – and achieve – superior levels of customer satisfaction. The rapid entry and success of these market disruptors has left many established companies reeling. And today, many face a very serious challenge to their existence. The choice is simple: ‘innovate or risk extinction’. Marcin Dąbrowski, Chief Innovation Officer at ITMAGINATION, explains why you should be looking to your IT partner to help you innovate so that you don’t just survive the digital age – you thrive. 


 NOTE: This blog post is based on interview given by Marcin Dąbrowski to Business Insider Polska.

 

The digital revolution has changed the game – it has levelled playing fields and empowered small ideas to flourish into industry game changers almost overnight. As consumers, this is exciting. As businesses, it can be exciting if you’re at the heart of the action, but scary if you’re standing on the sidelines while the competition accelerates off into the distance. Innovation isn’t something that just happens – it takes hard work, ideas, resources and the right insights (luck can also be a factor). Most companies understand the importance of innovation to their ongoing existence and, today, companies from all industries and geographies are evolving their organizational structures to facilitate and tap into the sources of innovation from within their companies. But there are other places to look as well, including your IT services provider. At ITMAGINATION, we’re encouraging our clients to embrace the age of Innovation as a service.

Innovation as a Services (IaaS) is a relatively new idea. What exactly is it?

At ITMAGINATION, we like to think of Innovation as a Service as the process of setting up a startup within a client’s organization. We’ve observed that many large corporations are often so fixated on achieving traditional targets (e.g. market share, sales, etc.) and on their own internal processes, that they don’t always pay enough attention to what is happening around them. This has been especially true during the digital revolution thas has been taking place in recent years. As a provider of Innovation as a Service, ITMAGINATION sees itself as supporting the creation of incubators within organizations, and then collaborating with these incubators to refine and develop the ideas that have the potential to deliver dramatic results on the market. We seek to fuse our knowledge of the latest technologies – such as AI, predictive analytics, big data and more – with our clients’ deep-domain expertise to develop new ideas, services, business models, ways of reaching and interacting with customers, and transforming internal processes.

Which type of company stands to gain most from an Innovation-as-a-Service model (IaaS)? Who should be most interested in IaaS and why?

It’s not an overstatement to say that pretty much all companies could benefit from Innovation as a Service. However, there are many companies that feel that they have exhausted the full potential of their existing business model and are now looking to defend their market position by diversifying and making the next big step in their evolution. These types of companies are especially strong candidates for IaaS offerings.

For those companies that have a substantial market share and are looking to protect their position, the main threat typically comes from startups. These startup companies often benefit from a fresh perspective on an existing or new market problem, and an ability to identify – and act on – opportunities that larger companies don’t always see. They’re also able to introduce entirely new models of service provision, such as by making use of the ‘sharing’ or ‘access’ economy, the ‘gig economy’ or simply by providing traditionally purchased or licensed services on a subscription model. From a technology perspective, they’re not limited by legacy IT systems or approaches – they think ‘mobile first’, they adopt ‘customer-centric’ approaches to UX, they develop and evolve their tools services quickly and iteratively. Big companies that have completely different operating models are asking themselves questions such as: “What do we do in the face of such disruption?”, “How do we change quickly and effectively, but without losing marketing share in the process?”, “How do we keep our customers (and shareholders) happy as we transform?”. With the right partner, Innovation as a Service can help organizations navigate this period of change and emerge on the other side stronger.

How is the effectiveness of a project conducted in an IaaS model measured?

An important first step with Innovation as a Service is for the client and service provider to establish a clear strategy. We (for example, ITMAGINATION and our clients) must be able to ask ourselves the question “What do we seek to achieve together?” and then consider what our chances are, and then identify and discuss the level of risk involved. In the next stages, every idea and every decision must be verified against the agreed-upon strategy and associated objectives. Such objectives can be defined in many different ways, but one of the easiest ways is by revenue and profit. Ultimately, every company and its management are evaluated by their financial performance, and the idea of optimizing Return on Investment (RoI) is deeply embedded within the IaaS model. This is why IaaS projects typically seek to verify and validate ideas through prototypes and the creation of working versions as quickly and with as little cost incurred as possible – to understand if the idea has the potential to deliver on objectives and, based on the findings, to then cease activity, proceed or change direction. 

Why should clients work with their IT services provider in this way? What is the key value that ITMAGINATION adds in an IaaS model?

Innovation as a Service is a type of framework or methodology. Starting with the needs and strategy, we then proceed through four clearly defined steps on the way to delivering a working product that is ready to be implemented. The designated team from ITMAGINATION works with the client organization through every step of the process. This ensures that the ideas and innovations being developed are closely aligned to the client’s expectations, as well as to their organization and business model. Any ideas for a potential innovation are validated and iterated along every step of the way, and we always consider the ever-changing market and technology context that surrounds us. For this reason, we place a strong emphasis on developing prototypes in an agile way and always with active involvement from our client stakeholders. This way of working adds value, and it also enables our customers to keep costs in check while ideas are being developed.

ITMAGINATION has amassed experience from a wide range of sectors and we combine this with deep expertise in technologies such as big data, artificial intelligence (AI), user experience (UX) design, development of mobile and web apps, and integration of IT services with cloud platforms. We do this for clients from around the world. What’s more, at ITMAGINATION, every decision we take – whether that’s for the design of an application, the components used, or the architecture chosen – is driven by a desire to minimize the time and cost required to deliver a project, and to maximize the value that the product delivers to the client.

Do you have any examples of ITMAGINATION working with this Innovation-as-a-Service model for clients?

Yes, we have worked in this model with many of our clients during the last ten years. In fact, ITMAGINATION has the company goal of seeking “to empower the innovator in all of us”. That applies to our employees and to what we seek to achieve with our clients. The approach to unlocking and empowering innovation within our clients’ organizations is deeply embedded in ITMAGINATION’s DNA.

One example of how ITMAGINATION has delivered innovation ‘as a service’ has been with one of the world’s biggest cosmetics companies. We helped to implement an image-recognition solution based on machine learning that will help the company benefit from significant time and cost savings.

What could be holding organizations back from taking up Innovation as a Service?

In my experience, a lack of openness to new ideas and an inability to adapt to change are by far and away the biggest and most common challenges encountered by organizations. Whether it’s as a result of, or simply accelerated by, the digital revolution, the world in which we are living is changing at a much faster pace than we’ve ever known. Most companies have realized that the market positions that they’ve spent decades building can be wiped away in a fraction of that time. They must innovate or they risk becoming extinct. Innovation as a Service is for companies that realize this but are also smart enough to know that the inspiration or support they need to be able to innovate might well be best sourced externally.

It’s not always easy – many organizations are used to working in silos and yet the successful quest for true, value-adding innovation requires different departments to work together. This means IT working with Sales and Marketing, Operations and as many other departments as are needed. In many organizations, the implementation of new technologies or new solutions happens within the domain of the Chief Technology Officer or Head of IT, and then spreads out. If, however, the goal is to innovate and to contribute significant value to the business, then it is vital that representatives from many different areas of the business are involved. For many companies, this is a major change to their way of working and it represents a challenge.

What can a company do to maximize the positive impact of the Innovation-as-a-Service way of working?

ITMAGINATION is able to get the ball rolling with ideas around how to deliver value-adding innovation to a company. However, we also know that some of the best ideas will come from within the company. As such, the most important thing that a company can do is to have a collective open mind, and to be open to new ideas – wherever they come from. Again, we go back to the idea of “empowering the innovator in all of us” – our goal is to facilitate innovation and empower its origin, whatever that might be, and that obviously includes sources that already exist within the organization. When companies adopt Innovation-as-a-Service, ITMAGINATION can play the role of helping to discover new ideas, turn them into business cases and then validate and evaluate them, apply some finetuning and then support the process of turning them into real solutions that are ready to be implemented into business operations.

The digital revolution has been going on for some time now. So why has Innovation as a Service only recently become an option?

Innovation as a service has only really become a viable option for companies in the last few years, and a large part of the reason is that many companies have only recently become sufficiently mature and conscious of the threat they face if they do not innovate effectively. As demonstrated by research conducted by Microsoft in Central Eastern Europe and published as part of the ‘Guide to the Future’ (In Polish: Przewodnik po przyszłości), just 23 percent of companies surveyed identified themselves as initiators of major change in their sector. So where is this change coming from? The answer is from the smaller, more-agile startup companies. These companies are developing and introducing new business models, which undermine previous ways of generating revenue. Today, there are dozens of online marketplaces where everybody from retailers to manufacturers can sell their goods directly to customers in their region and even in new markets. This has created a huge threat to traditional ‘bricks and mortar’ retailers. At the same time (or perhaps as a result of), consumer expectations are changing – we want better quality (and we’re able to do the research on what that means), we want the comfort (of not having to leave our home), we want price competitiveness (because the rival retailer is only one click away) and we want speed of delivery (measured in hours, not days). And that’s not to mention the impact of smartphones – we’re on them all day and some of the night, which means more opportunities to consume goods and services. 

What innovations has ITMAGINATION developed to help reach more consumers?

One of the key areas in which ITMAGINATION is delivering important innovations is with its proprietary platform, Behaviolytics®.

Behaviolytics® is a platform that empowers its users to analyze customer behavior in real time. It makes use of all available data (e.g. spend history, patterns in how and when the customer interacts with a website or app) to provide insight on how to better personalize goods and services or to support in the development of a highly accurate risk assessment. When a company uses Behaviolytics®, it benefits from knowing more about its customers and thus is able to convert more opportunities into sales.

What are the benefits of solutions such as Behaviolytics® for consumers or end users?

Consumers will get to benefit from offers and solutions that are personalized to them. And completing transactions will become easier – imagine being able to see advertisements on posters or billboards that are personal to you and then being able to simply scan codes from them on your smartphone to complete a purchase. Or imagine that your favorite brands know your preferences – both the products you like to buy and the times of day/week/month when you like to buy – and check in with you at times that they know are right for you. And – regardless of what you’re buying – wouldn’t it be great to be able to spread the cost across a longer period of time and be able to do that directly within a mobile app, or pay all your shopping bills at a time that coincides with your salary payment (e.g. end of the month)?

Do innovations have to be focused on how to sell more to customers? What about innovations that are focused on internal processes?

Innovations that excite the market are the ones that grab the headlines, but it’s often the innovations that are only seen and experienced internally that make the biggest difference to a company’s financial results. Imagine if you had efficient operations, manned by a team of dozens of people. Now, imagine you had those same efficient operations and you needed only a fraction of the manpower to keep everything running smoothly.

Robotic Process Automation (RPA) empowers companies to innovate with their own internal processes. The main aims of RPA are to optimize and processes and reduce costs. Modern technology, supported by AI tools, machine learning, natural language processing and image recognition, enables companies to automate many of the activities that, until this time, had been conducted manually or in a semi-automated model. The potential for cost savings is huge, but we should also consider the amount of time and manpower that we could be freeing to innovate or add value to other areas of the business. RPA isn’t all about robots taking the roles of humans.

In which area are most companies trying to innovate?

The most important thing for any company will be working out how to reach a customer with the best, personalized offer at exactly the right time for that individual. And if we’re talking about B2C (business to consumer) services, then we’re almost certainly talking about how to get onto your customer’s smartphone screen at exactly the right time. Whether they know it or not, most companies already have access to the data that is needed to make a game-changing difference to the way they do business. What they might be lacking is that ‘missing link’ – perhaps a mobile app with a killer functionality that could make a service seem indispensable for consumers – to turn the data into revenue. Identifying and acting upon these ‘missing links’, these game-changing opportunities, could be the difference between simply surviving the digital age or thriving in it. It’s the difference that ITMAGINATION can make.

 

Learn it. Know it. Done.


The original interview with Business Insider that this blog post is based on can be found here (in Polish).