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Digital innovation can bring your business into the 21st century. We look at how you can use it to improve productivity, security, and customer experience.


A Definitive Guide to Driving Digital Innovation in Your Business

Posted by Angela Davis on July 6, 2023
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What’s the key to a successful modern business? Typical answers might include the best team, engaging products/services, or perhaps analytics-informed decisions. 

While it’s undeniable that these are important, there’s one factor that outranks all others. To keep up with your competition in an increasingly technological world, digital innovation is the key. 

However, to properly embrace this approach, a new way of doing business is needed. In this article, we show you how digital innovation can transform your enterprise and improve its performance. 

What is digital innovation?

91% of organizations are engaged in some form of digital initiative.

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There’s a good chance you already use technology to solve some of your business problems. For example, more and more companies now have employees working remotely. For many, this initially presented a communication challenge. Despite the reliability of email, it lacks immediacy. Many businesses introduced video conferencing software to enhance their communications, allowing employees to conduct 'face-to-face' meetings from their work or personal devices.

This is an example of digital innovation, where modern tech is used to solve issues in the workplace. Digital innovation can be applied in many different ways, from improving internal processes to honing marketing techniques.  

Common forms of digital innovation in 2023 include: 

  • Migrating to the cloud 
  • CICS mainframe integration
  • Automating administrative processes 
  • AI and machine learning technologies 
  • Omnichannel customer experiences 

Why is digital innovation important? 

Digital innovation is critical to staying competitive. As new technologies emerge, businesses will need to grow and adapt in line with them. This can lead to more intelligent product creation, greater efficiency and new ways to reach customers. 

We’ll look at some of the top reasons for embracing digital innovation later. For now, let’s consider one critical point: customers are naturally drawn to businesses that innovate. After all, they provide better personalization, support, and experiences. 

If you’re not careful, competitors will snap up your customers before you can evolve your business to keep pace with the latest innovations. To avoid this scenario, you must stay at the forefront of any changes. That’s why digital innovation is so important. 

Digital innovation vs digital transformation: what’s the difference?

The two terms sound very similar and are often used interchangeably. However, this betrays a misunderstanding of the terms. 

So, what is digital transformation? Digital transformation deals with broader changes in a business. It’s a long-term, organization-wide strategy. By the end of this process, every aspect of a business should be digitally powered.

Digital innovation, on the other hand, describes change on a smaller scale. Instead of a long-term strategy that covers several years, innovation focuses on more immediate goals. Therefore, specific areas or issues in an organization can be addressed using innovation.

Digital innovation usually resolves a specific problem. Due to slow internal processes, let's say your team's progress is slower than you'd like. To fix this, you might bring in an automated system with workflow management. This would be an example of innovation as opposed to transformation. 

Which should you choose? 

While different, digital transformation and innovation are related. Digital innovation can often be a first step toward a more far-reaching transformation. 

Digital transformation can often be extremely expensive, as the changes involved affect a business from top to bottom. For smaller businesses with limited budgets, innovation is a more affordable way of keeping up to date with the latest technology and delivering on customer expectations.     

Five reasons why your business needs digital innovation

Now that you know what digital innovation is and why it’s key for modern businesses, let’s look at some of its specific benefits. 


Cybercrime damage costs are predicted to reach $10.5 trillion by 2025.

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The annual cost of cybercrime is predicted to reach $8 trillion by the end of 2023. If that statistic doesn’t worry you, it should; your organization could be targeted next.

Attacks often occur because businesses haven’t invested in the latest security software. Cybercriminals are constantly finding new ways to breach firewalls and subvert existing defenses. 

Luckily, cybersecurity is in a constant state of improvement, with continual innovations designed to combat hackers. Therefore, investing in the latest security software can significantly minimize the risk of being affected by cybercrime. 

New innovations in cybersecurity include: 

  • Endpoint security
  • Behavioral analytics 
  • Financial services encryption 
  • The cloud 
  • Zero trust systems 
  • Hardware authentication 
  • Deep learning systems 

Competitive edge

Arguably the biggest advantage of digital innovation is the ability to stay ahead of your competitors. 

An estimated 93% of businesses have adopted, or have plans to adopt, a digital-first business strategy. Too often, though, these strategies are poorly thought through, and many businesses are still too slow in adopting new innovations. 

You can get ahead of your competitors by having a strong innovation strategy. Don’t be left behind; the innovators will be the ones that succeed. 


Poor productivity is a common issue for businesses of every size. If teams aren’t productive, goals aren’t met on time, and the whole business suffers. 

Sometimes teams aren’t working as effectively as they could be due to outdated software and slow systems. Upgrading to the latest tech can thus bring about a major boost in productivity. 

Better ROI

As established, outdated equipment and slow processes spell trouble. The result is that it takes you longer to meet your objectives, which ultimately affects your ROI. Digital innovation, however, gives your workforce the tools they need to get their jobs done properly. 

With the help of tech, you’re more likely to meet your goals on time, come up with better ideas, and see a subsequent rise in ROI. 

Improved customer experience

Customer experience means more than a nice storefront and helpful staff. You need to think about how customers interact with you online too. They’ll expect to be able to get in touch via social media, your website, live chat, and email at a minimum. What’s more, they’ll desire a seamless transition between these communication methods.  

A great example of digital innovation in action is to use the latest CRM software to centralize their experiences. This ensures that wherever and whenever a customer interacts with you, they’ll have a positive, unified experience. 

How to create a digital innovation strategy

Let’s look at some of the most important steps for developing your innovation strategy. 

Dedicate a team to the effort

Digital innovation is a group effort. You’ll need to create a dedicated team of people drawn from different departments. Have this team assess different areas of your business for issues and then plot out how digital innovation could provide solutions.

Use the agile model

The rate of technological change isn’t going to slow anytime soon, and these changes often result in new and novel customer needs. That’s why it’s important that you adopt innovative technologies when they appear. 

An agile approach helps you build speed into your innovation strategy. 

Let’s look at three essential principles of the agile model: 

  1. A clear vision. This approach begins with a direct and transformative vision. This should be shared with your entire business, not just between those at the top. An important part of being agile is the ability to quickly adapt to new innovations, which will be easier with a clear, cohesive vision.
  2. Putting the customer first. Your digital innovation should be built around the needs of your customers. Consider how tech can help you meet these needs effectively. 
  3. Leveraging data. Data is key to making the most of new technology. Data-driven insights can also be useful for identifying new areas of innovation. 

Don’t skimp on new technology

New innovations are inevitably expensive when they arrive. Sometimes, you might want to cut corners and stick with older systems. Avoid this temptation wherever possible. There’s no denying that it’s good to not spend rashly, but it’s important to invest when you do identify new tech that can elevate your business. Remember, oftentimes, you need to speculate to accumulate.  

Prioritize projects based on ROI

To identify where it’s best to invest, begin by looking at projected ROI. Your initial projects should focus on those innovations that deliver the greatest financial benefit.. 

Implement a digital adoption strategy

While it’s vital to invest in emerging technologies, not everyone will react to change with open arms, and the best tech becomes useless if no one knows how to use it.  To be agile with regard to innovation, your team needs to be ready to adapt, and it’s your responsibility to prepare them.

The solution is to implement a digital adoption strategy. Digital adoption is more than just learning about new tech—it’s knowing how to use systems to their full capacity and ensuring your business reaps the maximum benefit. 

Key pillars of a digital adoption strategy include: 

  • In-app training. The task of getting to grips with new software is made easier with experienced guidance. Giving lessons to employees and providing learning materials can be helpful. In-app training takes a more hands-on approach and gives employees the best chance of getting to grips with new software.   
  • Varied learning materials. When offering learning materials, these need to be as accessible as possible. Not everyone is a visual learner. Some might prefer audio files such as podcasts. Try to provide a range of materials to aid your staff. 
  • Educate before going live. To avoid a loss of productivity, it's important that staff understand how to make the most of software before it goes live. Ensure that education begins prior to the launch of new systems. 

Actively seek feedback

The benefits of employee feedback.

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If you want a happy workforce, make sure you listen to feedback. Throughout the process of digital innovation, staff will probably have a lot to say. What do they like, and, maybe more importantly, what don’t they like about your new systems? Are they happy with the implementation? What do they think could have been done differently? 

Staff will be much more willing to embrace digital transformation if their feedback is incorporated into your digital innovation strategy.

Drive revenue and business growth with digital innovation

As you’ve probably grasped, digital innovation is necessary for any modern business. From greater security to better customer experiences, there are many benefits. 

This is nothing new. Businesses that didn’t adapt to the widespread use of computers will not have gotten very far. 

But innovation isn’t always easy. It needs to be underpinned by an effective strategy. For example, you may need to consider the OL Hub as a way of bridging the gap between digital innovation and legacy systems in your business. 

There’s no way of knowing for sure what the next new innovations will be. One thing we can say for certain, though, is that digital innovation is the future. Don’t get left behind. 



FAQs about digital innovation

What are the basic principles of innovation?

There are five basic principles of innovation. These are:

  1. Innovation is the first step in problem solving. Encourage staff to have inquisitive minds. Regularly ask employees to consider how your organization can be improved. 
  2. Have a system for innovation. There are five systems for innovation:  targeted innovation, originator-assisted, continuous improvement, internal venturing, and strategic transfer.
  3. Passion is necessary, and pain is inevitable. Pursuing innovation is an exciting process, but it can easily go wrong. Try to be enthusiastic, but be prepared for when things don’t go to plan.  
  4. Work closely with teams. Working in the same physical space is ideal. You can better share ideas and encourage innovation. 
  5. Accept differences of opinion. Differences aren’t always a bad thing. Avoid arguments and instead use your differences to guide you on the path forward. This improves your ability to innovate and create a versatile digital environment. 

What are some trends in digital innovation?

There are several exciting trends in digital innovation in 2023. Below are some examples: 

  • The machine workforce. AI is one of the most exciting innovations currently. It has huge potential to transform the workforce in ways never seen before. We can expect to see machines taking over an increasing number of roles from human workers. 
  • 5G. The latest generation of mobile tech could have a big impact on businesses, and some industries will likely see more change than others. 5G-powered digital transformation in healthcare is just one example. For instance, doctors today can now treat patients via video calls on their mobiles. 
  • Better protections for accounts. Passwords are increasingly looking like an outdated form of security, with biometric identity seeming to be the likely successor. This would involve using facial or vocal recognition to unlock accounts. 

What are some examples of digital innovation?

There are plenty to choose from, but we’ve shared three particularly interesting examples below. 

  • During the Covid pandemic, Domino’s realized that face-to-face deliveries weren’t working anymore. They introduced contactless deliveries to their app instead. Due to this innovation, the company saw a 20% increase in orders. 
  • Porsche has also embraced digital innovation of late by introducing ‘car connect’. This is a system that provides a variety of functions from a user’s smartphone, including GPS services, traffic information, and playing music. 
  • Walmart offers another example. The brand has recently brought together eCommerce and retail in its mobile app. Customers can scan products on their phones and transfer information to a self-checkout. This provides a quicker and more satisfying shopping experience.  

Although all very different, what each of these examples of digital innovations has in common is that they improve customer satisfaction, thus driving sales and profitability.

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