Information as a Competitive Advantage – Part 6, Innovation

The ability to innovate represents a very important success factor in the modern Business environment. Factors which influence the development of an innovative environment are:· the business infrastructures supporting core competence development

• the supply of skills and knowledge in respect with the ability to conduct research and development
• the demand for innovative products in terms of quality, design, performance, safety, customized development
• the degree to which the external environment supports innovative approaches

Modern businesses should shape their operations model, to support innovation. The production of new ideas which shall contribute to a differentiated positioning and the achievement of distinctiveness (one of 6 major strategy elements according to Michael Porter), should be a main business goal. Business focus on quality and productivity is no longer enough. However, in reality few businesses can afford to invest heavily in innovation. Google requires that its employees assign 15% of their time, on a project of their own. Information features supporting innovation, are very different from information features supporting business operations. Information supporting innovation:

• has a very wide scope and may relate to various activities and Organizational units
• includes estimates and forecasts for the market, market trends and changes identified
• gives hints on uncovered market niches which may be of interest (may yield high demand and lead to profitable business)
• includes technology analysis enabling new approaches to the market
• relates to the search and identification of business opportunities and the nourishment of innovative ideas
• is unstructured unlike operations information which is stored in structured format in operational systems
• includes quantitative and qualitative components and usually is analyzed qualitatively

The information production process aiming at innovative action, usually functions in a loosely defined framework. New ideas arise at different organizational levels and functions, which have different views of the market. Information on innovation includes:Market intelligence informationMarket intelligence information which can lead to innovative actions, is very important, but also hard to acquire in a timely fashion (before competition does). It requires the collection and qualitative combination of information from various sources and relates to:

• Changes in the business environment which are caused by social, financial technological or other causes, creating opportunities and risks.
• Market needs which are not identified and not sufficiently covered.

Competitive intelligence

• Information on the current positioning of competition often is available. Information on the next moves and goals of Competitors is hard to acquire.
• Information on core competencies and factors which contribute to the development of competitive advantage, are also important.

Enabling technology intelligence Comprehension of enabling technology trends, is very important to identify business opportunities but also risks. Analysis of:

• current technology and best practices to use it
• new technological trends and capabilities to provide value to the Customer through improved customer service or cost reduction,

may lead to actionable decisions. Copyright 2006 – Kostis Panayotakis

Material relevant to information management, can be found at http://www.pleroforea.com

Kostis Panayotakis - http://www.pleroforea.com