How Digital Technologies Can Drive Innovation by Siddi Wouters

The world around us is changing rapidly and digital technologies are altering the way businesses can compete. One example of how a company has challenged their industry’s norm by competing in a new way is Uber. They connect people who need a taxi, with taxi drivers, yet they do not own any taxis themselves. This model has enabled them to grow and scale their operations much faster than more traditional taxi firms.

For many companies, building incremental digital improvements in products and services for customers is enough, but eventually, even the more protected markets and operations will become subject to disruption through new digital business models. Therefore, at SGS, we have to change as well by finding new products and services for our customers and implementing innovative ways to operate.

A new idea is only an innovation if it is actually used by someone. Otherwise, it is just a nice idea.

This means that any innovation starts with a user for whom we solve a problem. When we solve a problem, we create value for the user – this is the first step in innovation. But we can also be innovative in the way we deliver this value.

For example, when Apple invented the iPod, users also needed a way to get the latest songs on to their iPod, therefore Apple created the iTunes Store. The value delivery is the second step in any innovation.

The final step is innovating in a way to capture value. Google is one of the largest companies that we all use, but we do not pay for their services in a traditional way.

There are special characteristics about digital technologies. Once something is made digital, millions of copies of it can be created without any cost and it can be sold again to many other users. They also allow us to instantly connect with people wherever they are at that moment, or to data, or even to supercomputers. If you have a sensor in the field that requires supercomputer capabilities to process, all that is needed is a mobile phone; through the phone you can simply connect to supercomputers via the cloud.

These features make digital technologies very much suited for innovation. We can now solve problems that we could not solve before, and we can innovate faster and more cost effectively.

Many large organizations are born from innovation, and they are typically better at it than they might think. Still, many find it difficult to come up with new ideas, because when the company is growing, it learns to become more efficient and install processes and planning to reduce risk and cost. This is how large organizations become more mature in their operations, but the same processes that help them become more efficient, do not always help them in the search for new opportunities.

As the uncertainty around these new opportunities is so high, careful long-term planning is not conducive to innovation. We do not always know in advance which innovations are going to be successful, therefore, a good strategy is to build a prototype and test it in the field before launching a full new product or service. Through several quick iterations, potential new products can quickly be identified and tested.

SGS’s Digital and Innovation department is here to support our business. We identify key growth areas and new products and services, and quickly validate them through a careful iterative process, eventually scaling them up so they become part of our standard business operations.