What is Process Innovation? Everything to Know in 4 Easy Points
Introduction
Process innovation is redefining the business landscape, and rightly so as more and more corporations are leveraging it to deliver improved/new products or services and ensure their company’s long-term success.
Innovation is the need of the hour for businesses to meet increasing customer requirements and to stay relevant in the constantly evolving market dynamics. Organizations or individuals must innovate according to their consumers’ needs if they want to be on the leading edge.
This is where process innovation comes into the picture. It is an innovation development process that allows companies to align, redesign, and improve their business processes in a customer-oriented manner by using advanced digital tools and technologies.
This article aims to define process innovation and explain its importance. If you are a visionary – a beginner or professional with a passion for innovation and success, then read on to understand the concept.
In a nutshell, this article aims to explain:
- What does Process Innovation include?
- What is the difference between Product and Process Innovation?
- What are the types of Innovation Process Models and Examples?
- What are the business benefits of Process Innovation?
1. What Does Process Innovation Include?
Process Innovation includes changes in the technology and equipment used in the design, development, and manufacturing of products or services. This innovation decision process implements significantly improved production or delivery methods to save money, time, or provide better customer service.
Artificial Intelligence (AI), Deep Tech, Big Data, Robotics, and other leading digital technologies are powerful tools for the innovation process, especially in optimizing deliveries, obtaining real-time data, and enhancing efficiency.
2. What Is The Difference Between Product And Process Innovation?
- The product innovation process deals with change in the final product either by adding new features or by improving the product’s performance. In contrast, process innovation deals with improvement in the process of producing the final product instead of changing it.
- Product innovations are visible to the end-users, whereas process innovations are seen internally. They are usually invisible to customers.
- Product and process innovation examples: Increasing the digital camera resolution of new phones is an example of product innovation as there is an addition of a new feature that was not present in the previous phones. Automatic replenishment ordering of supplies in a warehouse is an example of a process of innovation where the whole process is enhanced for efficiency.
3. What Are the Types of Process Innovation Models and Examples?
- Incremental Innovation Model
This process of innovation consists of small yet meaningful changes to the design, development, or delivery of products or services. These small innovations in process stages improve profitability, extend service or product lifecycle, and reduce costs.
These are easily visualized and communicated to grab consumer’s attention even in a noisy marketplace.
- Disruptive/Transformational Innovation Model
The Disruptive Innovation Process model either creates an entirely new market for the product or places the product in a new market that already exists. Initially, these processes can have lower performance but eventually move upmarket.
The software-as-a-service business model is a perfect example of disruptive innovation. It did not gain any traction in its initial years, but eventually, it became a success. Now it is utilized by the majority of industry giants and small companies alike.
- Sustaining Innovation Model
In contrast to Disruptive Innovation, this process of innovation improves and adds value to the existing products or services instead of creating new ones. It is similar to Incremental Innovation in terms of reducing defects and improving performance with every iteration.
For example, in the banking sector, most customer interactions, like balance checking, are redundant and time-consuming. These documents and workflow management processes can be automated to improve the consumer experience.
- Radical Innovation Model
The Radical Innovation process model addresses and solves global problems using entirely new tactics to transform the market altogether. These innovations take time to be accepted in the mainstream sector, but they shift the entire market dynamics when executed successfully.
One of the striking process innovation examples of utilizing radical models is the use of Blockchain technology to overcome identity and data theft in the education sector. Blockchain also solved the complex process of tracking intellectual property.
- Open Innovation Model
The open innovation process model relies on the concept of utilizing creative and novel ideas born out of collaborations with other organizations to achieve strategic goals. Philips’s collaboration with technical institutes to tackle significant challenges together is an excellent example of an open innovation process.
Another instance when Philips leveraged an open innovation model is the launch of MiPlaza. It is an open innovation lab that allows other companies to develop their applications with access to Philips’s research. In return, Philips used those inventions to improve their solutions.
4. What Are The Business Benefits Of Process Innovation?
The successful exploitation of innovative ideas is crucial to improve, reimagine, and reassess business processes to increase efficiency and improve profitability. Some of the business benefits of process innovation are:
- Process innovations add value to organizations by enhancing their brand image, increasing productivity, and overall growth.
- It is a refined way of doing things across the whole supply chain and being efficient in cost, service, and quality.
- This approach allows organizations to be more adaptable to their customers’ needs and exploit new ways of developing and delivering improved products or services to the market.
- It helps in the optimization of the workforce by utilizing both people and machines for better customer engagement and work efficacy.
- It can also act as a competitive differentiator by making your business operations stand out to offer better service and experience.
Conclusion
Process innovation is all about integrating new technologies and innovating business processes using new ideas and tools. You can leverage it to define more unique perspectives, respond to changing market conditions, and find new business efficiencies.
Committing to the innovation management process is a crucial step to evolve your organization while growing the business. Utilizing and deploying innovation development processes requires a multifaceted transformation and affects different areas of an organization.
Now that you have understood what process innovation is, are you ready to realize its benefits and generate the next breakthrough?
Do check out Jigsaw Academy’s Post Graduate Certificate Program In Design Innovation & Strategy – a program that enables learners to understand Design Innovation and Creativity-led Entrepreneurship and comprehend the intricacies of process innovation.
