What is an Innovation Engine and why does it matter for Digital Transformation?

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The role of the Innovation Engine is crucial for the success of digital transformation in organizations. The engine enables the testing and application of new technologies, which can lead to the invention of new products, services, and business models. How exactly does it help drive digital transformation in companies?

What is the role of the Innovation Engine, and why does it matter?

In order to succeed, the digital transformation embraces an innovative engine to test and apply new technologies and techniques that can be used to invent and implement new products, services, and business models, re-invent existing business processes, and profitably lead the business forward. This also includes the ability to attract and retain the talents with continuously changing skills needed to drive digital transformation in the company successfully. Historically, traditional technology environments were developed based on legacy technologies and solution delivery methodologies, resulting in less agile and more episodic value delivery to the business. With the expansion of cloud technologies, mobile platforms, and progress in areas such as data analytics and artificial intelligence, today’s technology teams and entire organizations increasingly require new skills to deliver value at the pace required to maintain their firm’s innovativeness.

The innovation engine is based on a set of critical elements:

1. Purpose and scope of innovation. After sharing the company’s digital vision with all stakeholders, it is advisable to define the goals of innovation activities, prioritize them, plan for testing and verification and, at a later stage, plan to implement the best initiatives. At this stage, it is vital to find influential sponsors within the company willing to take on the challenges of digital transformation and support innovative activities. Engagement across the enterprise should begin by working with customers and users and investing in small-scale, digital proof-of-concept initiatives to solve the problems they face. Quickly finding working solutions (MVPs) based on user feedback should then be followed up by improving the offering through an iteration cycle and then scaling. To avoid perplexing perturbations, the search for new business opportunities that leverage digital technologies should begin by working in areas adjacent to current service and product offerings.

2. Innovative mindset, that is not relying solely on solutions that have worked historically but setting ourselves up for the need for new solutions to new challenges. This new way of thinking manifests itself in the following actions: 

– Freedom to explore new opportunities that can also cannibalize the existing business.

– Challenging our orthodoxies and established ways of thinking.

– A new way of thinking of tolerating failures rather than punishing them. The key is to learn from them and move on, based on a “test and learn” approach.

3. Innovation resources. Innovators must have the ability to collaborate with teams and leaders across the company, as well as with key external stakeholders, such as customers, VCs, start-ups, universities, technology providers, and partners. Expanding and deepening networks inside and outside the company can help understand key trends, needs, and opportunities for collaboration to better influence the co-creation of new digital initiatives. A balanced approach includes bringing in fresh external talent and continue building the knowledge base of the existing internal team. This combination will feed inner creativity and stimulate the emergence of new ideas, concepts, and initiatives. 

4. Innovation activities and processes. To overcome cultural roadblocks and develop an innovation competency capable of executing disruptive digital innovations, it is reasonable to start with a combination of business process improvements and customer-facing initiatives. An iterative approach based on experimentation, prototyping, and validation of solutions allows solutions to be tested and developed at low cost and at a rapid pace. Digital pilot projects generally consist of the following steps: create a prototype of a product or planned process improvement – test it live to gather feedback, and then iterate based on the information gained. It also includes creative approaches toward designing new business models and outlining new organizational processes for seamless execution of digital workflows.

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HP Case 

After the split in 2015, the company faced the challenge of maintaining full control over its security and costs, while at the same time having the flexibility to adapt to modern times. The task was difficult, requiring the transformation of traditional Datacenter IT Operations into Cloud IT Operations, and traditional Application Architecture into Cloud Service Architecture. The HPE Next program was introduced to bring the company closer to the cloud computing model and make it more agile and modern. The goal was impressive – reducing the number of applications owned by IT from 800 to 400, then reducing the number of 10+ ERP (Enterprise Resource Planning) systems to just one, and finally reducing the number of servers owned by the company for its own use from 62K+ to 20K. The gains from the company’s transformation were clearly defined – it was to reduce the cost of maintaining a complex and outdated infrastructure by replacing it and delivering a new one that provides the technical, financial, and operational architecture for an agilely focused and efficient business.

Now HPE specializes in delivering these solutions to its customers with its GreenLake edge-to-cloud platform. This place connects devices to other devices and devices to people, analyzing and operating on data and applications wherever they are. Creating this innovation platform required rethinking the goals of innovation activities, generating resources, new processes, and value streams to create an innovation engine. After accelerating digital change in organizations worldwide, HPE is now helping to create an environment of self-service agility that can be easily scaled up or down depending on current customer needs. With its customer-ready solutions, edge-to-cloud expertise, and expanding ecosystems, HPE can be a way for its customers to innovate faster while providing financial flexibility.