Information Technology Strategies for Product and Service Innovation

This report delves into the significance of Information Technology (IT) strategies for product and service innovation in business enterprises. It emphasizes the importance of a well-defined IT strategy, often termed a technology strategic plan, in achieving organizational goals and maintaining a competitive edge in today's digitally driven environment. The report highlights the need for flexibility in IT strategies to adapt to market changes, business objectives, and technological advancements. It discusses the challenges of formulating an effective innovation strategy, stressing the importance of openness to new ideas and the ability to manage innovation from inception to market launch. The report explores various IT strategies, such as VoIP, CRM, and business intelligence, used by SMEs and larger organizations to enhance products and services. It also covers the processes and tools to optimize innovation capabilities, identify unmet customer needs, and devise innovation strategies. The report addresses common misconceptions about IT strategy and provides insights into devising an effective innovation strategy, including the need for customer-centric approaches, assessment of business performance, and collaboration between IT executives and business partners. It also categorizes different types of innovation and discusses key growth components like market size, network effects, and high gross margins, along with success factors for new product development, including strategic and market factors.

Individual Research Question
Information Technology (IT) Strategies for Product and Service
Innovation in Business Enterprise
Author
Student ID
Module Group Number
Abstract
The Information Technology strategies for products as well as services of any business organisation helps them to meet their set
goals and objectives. The IT strategy is usually a comprehensive plan or an idea that outlines the way in which a particular
technology should be used to achieve the target of the organisation. The Information Technology strategy is also often termed as
technology strategic plan that is a written article stating the numerous aspects the affect the use of technology as well as
investment made by the organization. It is a known fact that executing an IT strategy requires the documentation to be flexible
enough to be able to change according to the circumstances, business objectives and priority, market conditions, budgetary
limitations, technological advancements, and user needs. In today’s time and age, it has become necessary for every company or
business organisation to have an IT strategy. The importance of Information Technology strategy has increased over the last
couple of years as the organisations tend to concentrate on digital transformation. As such, the organizations should devise a
technology strategy in order to achieve the set goals and also to compete against others who have similar aims and objectives.
1. Main text
The Information Technology Strategy or the Technology Strategy is simply a plan of action to develop as well as
create an information technology competency for sustainable plus maximum value for the business enterprise (Glaser
and Strauss 2017). Formulating a powerful innovation strategy for products and services is not an easy task to perform.
As a matter of fact, the recent studies portray that there exists no long – term correspondence between the amount of
money that goes on in the innovation efforts and in the overall financial performance of the business enterprise.
Instead, the thing that matters the most is the openness of the company to new ideas and thoughts, and its ability to
manage service or product innovation from commencement to market launch along with the discipline in linking the
development of the new product or service firmly to financial goals ad specific sales (Lobler and Lusch 2014). It is
known that in today’s time and age, social changes and the rapid development as well as improvement of technology

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has not only created many opportunities but risks as well for the business enterprises. In addition to this, the
difference between the ones who leverage opportunities and the ones who yield to risk hinge on who sees, acts and
realizes the face of uncertainty (Glaser and Strauss 2017). Moreover, the most effective business enterprises align and set
their policies, culture, as well as processes to uphold a continuous course of innovation which drives top – line
development and growth along with the bottom – line efficiency (Nambisan 2013). The successful innovators tend to
engage the partners to continuously gain more knowledge and to discover new and better opportunities.
Some examples or instances where the IT Strategy has been used to innovate the products and services in the
business enterprises are – the SMEs are making use of VoIP or the Voice over IP to deliver voice communications
with the help of the internet and has helped them reduce their phone bills significantly. They also make use of
Customer Relationship Management (CRM) to store the customer information and make use of it as and when
required. Moreover, the most distinguishing IT Strategy is the business intelligence which the SMEs use to analyse
data like sales revenue by breaking it into various subheads based on the product or on department. Printing and
storage along with digital marketing is being used by almost all the companies in todays’ world be it the big MNCs
or the SMEs. With the help of these IT strategies, the companies give a complete new outlook to their product or
service and make it stand out from their competitors. This not only is cost efficient but saves the energy too which is
quite needed in today’s deteriorating world scenario.

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Figure 1: Supply Chain IT Strategy
Source: Nambisan 2013
1.1. Processes and Tools to Optimize Innovation Capabilities -
 Developing new products as well as services (Santamaria, Nieto and Miles 2012) ;
 Gaining a better knowledge and view of the customers as well as the markets ;
 Moving into the new markets ;
 Innovation management as well as governance ;
 Creative thinking skills ;
 Promotion of organisational change management ;
 Developing new skill sets and methods to sustain the innovation ;
 Facilitate workflow, innovation workflow and knowledge management ;
 Optimizing the existing value chains ;
 Creating and formulating new business models

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1.2. Identify the Unmet Needs of the Customers -
The front – end of product and service innovation can tend to be a very confusing place, full of strong opinions,
urban myths, contradictory information, engrained assumptions, and hidden treasures (Senge 2014). From this chaos,
inspiration, ideas, and insights emerge hat have a tendency to drive the innovative products as well as the services to
the market. Persistent as well as constant success at this particular stage calls for focus as well as discipline which
comes from some defined methods and approaches that control the inherent creativity and knowledge of the
customers and staff members (Hakansson 2015). To make the best use of the opportunity by identifying the needs of the
customers, the business enterprises and organizations should work effectively and efficiently to understand the
needs and requirements of the customers and the market as a whole through the help of following methods –
Figure 2 : Driving Information Technology Innovation
Source: Lusch and Nambisan 2015
 Focus groups as well as interviews of the stakeholders ;
 Conduct an ethnographic research ;
 Conduct innovation campaigns (Kindström, Kowalkowski, and Sandberg 2013) ;
 Collaborative as well as crowd-sourced ideation ;
 Disruptive thinking systems ;
 Human-centered design
1.3. Myths that Mislead
The Information Technology Strategy (IT Strategy) is not about choosing activities to pursue which are different
from the competitors (Baret et al. 2015). This is one of the most crucial myths that misleads as selecting an activity is
simply not strategy. The Information Technology strategy is all about creating products and services which will

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enable the business enterprise to win and outperform the competitors. This involves the fact that the product or the
service that are placed in an attractive market must target a profitable segment of clients and must ensure to address
the unmet needs and wants of the clients (Tilson, Lyytimen and Sørensen 2012). This will help the customers to get a better
job done than any competing solution. In addition to this, it must be kept in mind by the business enterprises that
only after they have crafted or produced a winning service or a product, can they consider the activities which will
be required to deliver that particular service or the product.
Furthermore, to articulate an effective Information Technology Strategy, the business enterprise must be aware of
all its customers’ wants and requirements, which needs are unfulfilled, and what is the segment of the customer
whose needs are being unmet (Lobler and Lusch 2014). Although, more often than not, in most of the companies, the
supervisors cannot usually agree on what the need of the customer is, so obviously, they do not have a clue what
each of the necessities are, and not to mention which are being neglected or which need based sections prevail.
Given the present circumstance, it is highly unlikely that they can effectively define an IT strategy which will enable
the clients to show some signs of improvements. In addition to this, this is main reason as to why the business
enterprises concentrate on activities.
Figure 3 : Innovation types
Source: Nambisan 2013
1.4. Devising an Innovation Strategy
Just like the various models for the document, there exists numerous methods to approach the creation of an
Information Technology Strategy (Nylen and Holmstrom 2015). The competitive gain and the differentiation that is being
derived from opting the right unmet need of the customer. In order to do this, all the wants of the customers must be
known to be able to formulate an innovative IT strategy accordingly. This approach will perhaps work as it has been

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built around a solid understanding of the needs of the customers. In addition to this, it has also been discovered that
an assessment of the business enterprise must be conducted and analyses whether they are successfully meeting the
set objectives, benchmarks and the relevant KPIs (Bocken et al. 2016). Eventually this assessment would help them to
identify what technology is currently being used and the gap that exists between the current Information Technology
operations and the objectives as well as the strategic aims that have been defined in the ongoing strategic plans.
Figure 4 : Strategy for Small and Medium Sized Organizations
Source: Nylen and Holmstrom 2015
In addition to this, the senior IT executives must work along with their business – side partners in order to further
develop and build up the Information technology procedure (Kowalkowski et al. 2015). They ought to likewise search out
for different assets, for example, inquire about the research reports to be able to comprehend the business and
innovation drifts that will perhaps affect their organization's market (Cusumano, Kahl and Suraez 2015). All of this
eventually develops the groundwork for Information Technology executives to develop both the short - term as well
as the long - term aims and objectives, technology predictions, and budget projections along with the perceived
future opportunities that goes into the strategy in conjunction with the corresponding summaries that are required for
the final document.
2. Categories of Innovation
Experimental investigations frequently neglect to give a definition to the "level of newness' of a development or
an innovation (Baden Fuller and Haefliger 2013). The absence of acknowledged definitions poses a challenge to innovation

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research as it restrains the similarity of discoveries. It is imperative to characterize the innovation of the Information
technology strategy into typologies as the elements that impact these various kinds of innovations may vary (Cooper
2017). Radical innovations that are being made would conceivably not require detailed client needs investigation as
much as the other kinds of innovations would require. Steve Jobs expressed on different events that client
cooperation is not that essential to the plan of innovations as more often than not a ton of times the individuals do
not have the foggiest idea what they need until it has been shown it to them.
Figure 5 : Business Model Innovation Canvas
Source: Created by author
Market Size Distribution
THE 4 KEY
GROWTH
COMPONENTS
High Gross Margins Network Effects
How large is the size
of the market that the
business enterprise is
targeting and is it
really reachable?
Are there existing
networks the business
enterprise can leverage
on (Chen and Tsou
2012)?
When the revenue of
the business
enterprises grow, does
the company generate
larger amounts of cash
for financial growth
Is each additional user
joining in bringing a
positive change or
effect to the business
(Cusumano, Kahl and
Suraez 2015)?
There are some success factors that must be noted for new product development –
 Strategic Factors - These factors include the existence of an IT strategy that elaborates on the concept of
how a company will compete within the competitive environment with the launch of its new product as
well as the service development plans (Carlborg, Kindström, and Kowalkowski 2014). Scientists that only have a
tendency to concentrate on the vital perspective on an item reject the very thought of internally centered
practices. A viable innovation procedure ought to be implanted in the way of culture as well as practices of
the organization. An embedded IT technique is exhibited by long - term duty along with the clear
designation of assets. A successful IT procedure has to incorporate clearly formulated goals which are
effectively conveyed to the clients as well as to the staff members.
 Market Factors - This factor basically refers to two main themes (Van Boeijen et al. 2014). The first one relates
to the commercialization cycle or the process of the product and service development phase while the
second theme focusses on the market as well as the client information input which aids in the designing of
the particular product or the service and delivering it to the target market. Factors such as market analysis,
competitive analysis, monitoring along with the adherence to a formal routine was found to be helpful and
useful to improve the Information Technology strategy (Carlborg, Kindström, and Kowalkowski 2014). In addition
to this, the analysis and evaluation of the market potential must be precise along with the competitive
analysis. The customer integration during the Information Technology strategy process where the client is
the active participant was found to have a positive influence on success. Although, it was also found that

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customer integration should be analysed and measured for robustness to be able to determine if the results
were meaningful or not.
Figure 6: Service Innovation
Source: Nylen and Holmstrom 2015
 Process Factors - Any efficient product and service innovation process in any business enterprise is
perilous to innovation (Van Boeijen et al. 2014). Efficient product or service innovation is more often than not
described as the formal process where in the stage gate process is separated into few distinct stages with
checkpoints and milestones. Alternative to the stage processes, there are methodologies like Cycle time
excellence, Total Design, and phased development. The proficiency with which these activities are being
carried out in the individual phase of the development procedure relatively has a positive influence on the
success of these new products as well as services. Some specific activities are more beneficial to the
success of the products and services than other processes or activities. These activities are market testing,
market orientation, development and technological capability.
 Organisational Factors - These factors incorporates the extent to which perceptions, thoughts, ideas, values
and assumptions of the product or service innovation team influence their own behaviour. Moreover, the
type of assets along with their generic characteristics is thought to be crucial for innovation of the product
or service in a business enterprise (Lusch and Nambisan 2015). The teams who have a tendency to comprise of
members with diversified set of skills and experience, culminating from various areas in the business are
seen to improve innovation significantly.
2.1 Importance of having an Innovation Strategy for Products and Services
Despite the massive and enormous investments of money as well as time made by the organisations and business
enterprises in today’s time and age to develop and grow their organisation, IT stretegy still seems to be a maddening

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and frustrating pursuit in lot of the companies. The innovation and the innovative ideas more often than not fail and
the innovators who become successful have had to face a hard time to sustain their performance for instance, Nokia,
Blackberry, Yahoo, Polaroid, and a couple of others (Carlborg, Kindström, and Kowalkowski 2014). It becomes difficult for
the business enterprises to build as well as maintain the capacity and capability to innovate. The reasons for this
difficulty go quite deeper than the commonly stated cause - a failure to implement and carry out. The main issue
with innovation enhancement efforts seems to be imbedded in the lack of an innovative strategy. An innovative
strategy is nothing more than an obligation to a bunch of mutually reinforcing and coherent behaviours or policies
which aims to achieve a specific and set competitive goals and objectives (Baden Fuller and Haefliger 2013).
3. Conclusion
To conclude, it can be said that a good Information Technology Strategy promotes alignment amongst the various
groups of a business enterprise, clarifies the priorities as well as the objectives, and helps them to focus. In addition
to this, the companies more often than not have a tendency to define the business strategy every quarter along with
its scope and positioning by specifying the various functions. The functions here include finance, marketing,
research and development (R&D), operations, and logistics. Moreover, without an effective Information Technology
Strategy, it is challenging for the innovation strategies to give the products or the services a new outlook or feature
(Glaser and Strauss 2017). As it was mentioned earlier that aligning the IT strategy with the goals and objectives of the
business can be demanding, the innovating organisations tend to struggle in order to reduce the gap that exists
between the business objectives and the IT Strategy. To be able to be successful with the strategy alignment, the
businesses must aim to communicate the role of the strategy to ensure that there exists an innovative drive
throughout the organisation.
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