Innovation happens when an idea is implemented to create an impact. It has three elements: idea, implementation and impact. The impact is typically measured as either cost saving or an increase in revenue – both resulting in higher profits.
Innovation in product companies (or OEM) is well understood and practiced. They have well established processes, funding/budgets, development methods and metrics to measure the success of their innovations.
The above definition of innovation is appropriate for service companies too. As these companies don’t own the product or any of the Intellectual Property, replicating a system similar to their customers doesn’t make logic or financial benefit. As service companies essentially processed information on behalf of their customers, the innovation journey has been essentially around the process.
Innovation is commonly referred to in the following contexts:
Most of the innovations have been centred around the introduction and/or modification of new processeses. Some large companies have introduced operating systems and in-house products, which help them to be more efficient and serve the customer in a better way. Other companies have taken the route of introducing new products and also patenting certain technologies or processes that help them to differentiatie from their competition.
So what are some of the challenges that companies go through while trying to embark on the path of innovation? Stay tuned for the next post…