Unit 2:
Innovation & Digital
Transformation
Unit code
K/618/5691
Unit type
Core
Unit level
4
Credit value
15
Introduction
Many businesses manage to remain competitive by using their ability to adapt
strategies and re-think their old operating models in response to fundamental
changes in the market. Technology gives these organisations the opportunity to
evolve and to increase their value to their customers; modern services are
increasingly moving online – making digital transformation a necessity. In 2019, the
global spending on digital transformation technologies and services grew around
18%. This unit aims to give students a comprehensive understanding of digital
transformation.
Digital transformation constitutes the integration of digital technology into all areas of
a business to maximise the Return on Investment (ROI) meaning that there will be
fundamental changes to business operations and culture.
In this unit, students will look at a number of tools and techniques that organisations
use to transform and become more innovative in their approach. These include
frameworks and related elements such as operational agility, culture, leadership,
customer experience, and integration of digital technology.
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Learning Outcomes
By the end of this unit, a student will be able to:
LO1 Investigate the underlying context for digital innovation and market disruption
that leads to business transformation
LO2 Explore the different types of digital transformation
LO3 Explain the requirements for a successful digital transformation
LO4 Review the range of methods for protecting ideas as part of digital
transformation strategies and their advantages and disadvantages.
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Essential Content
LO1 Investigate the underlying context for digital innovation and market
disruption that leads to business transformation
Contexts:
The application of digital technology to existing business problems.
Exponential evolution of technology.
Examples of how technology makes the difference.
Deconstruction of the value chain.
The competitive life cycle.
The economics of innovation.
Why do organisations need to digitally transform?
Does your organisation need to digitally transform?
Innovation vs invention:
Definition of digital innovation and commercialisation, taking into consideration
the challenges this creates for small businesses.
Disruptive innovation, e.g. new market, value network, disruption of existing
market and value network, displacement of established market leaders.
Definition of invention and how invention is created. Turning invention into
innovation and sources of digital innovation.
Appreciating benefits for companies that innovate and transform:
Competitive advantage.
Streamlined business processes that come as a result of automation, SaaS, and
other integrated technology solutions.
Digital solutions that cut costs, improve return on investment (ROI) and boost
revenue.
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Managing digital innovation:
Creating a structure and culture of innovation; getting the organisation to know
the difference between invention and innovation.
Developing innovation vision and leadership, entrepreneurial teams and
innovation networks.
Developing a new technology strategy in an existing business context.
Choosing to adopt and implement new software or platforms.
Decision-making requirements to evolve from analogue to digital processes.
LO2 Explore the different types of digital transformation
Processing different types of digital transformation, e.g.:
Business process transformation.
Business model transformation.
Domain transformation.
Cultural/organisational transformation.
LO3 Explain the requirements for a successful digital transformation
Factors for a successful digital transformation include:
Senior management buy-in, set clear targets, promote Agile ways of working,
build capabilities, secure investment, lighthouse projects, nurture digital culture,
sequence initiatives.
New operating model or framework:
Identify opportunities for growth, innovation and new sales.
Employ the most effective marketing tactics for your business.
Understand if and how you can take on your digital competitors.
Identify capability gaps.
Select or create the right technology to deliver transformation.
Data-driven decision making.
Accessing funding and resources:
Why an organisation would want to access funding (e.g. product development,
marketing) and the different types of funding sources available.
Consideration of the resources a small business may require in commercialising
their offering, e.g. office space.
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Preparing a business case:
Determine the value the digital transformation project will bring to the business,
e.g. revenue, employee retention, increased productivity, creative performance,
brand sentiment, customer satisfaction.
Plan a digital roadmap, e.g. short- and long-term actions, key milestones.
Creation of a dynamic, flexible communication plan. Communicate achievement
of key milestones and identification of the best medium to do this.
Determine matrices to achieve return on investment (ROI).
Measurement of matrices to identify return on investment (ROI).
Identification of lessons learned and how these lessons can be adopted for
future projects.
LO4 Review the range of methods for protecting ideas as part of digital
transformation strategies and their advantages and disadvantages
Intellectual property:
The definition of intellectual property (IP).
Exploiting knowledge and intellectual property rights.
Overview of key IP tools including copyrights, trademarks, design rights and
patents.
The role of branding in protecting the innovation and the limitations of IP in an
international context.
The implications of growth of open source and open innovation platforms on IP.
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Learning Outcomes and Assessment Criteria
Pass
Merit
Distinction
LO1 Investigate the underlying context for digital innovation
and market disruption that leads to business transformation
P1 Explain digital innovation
and determine its
importance to organisations
in comparison with digital
inventions.
P2 Explain how
organisational vision,
leadership, culture and
teamwork can exploit
disruptive digital innovations.
M1 Analyse different sources
of digital innovation, and how
organisations can foster and
develop an environment and
culture of disruptive
innovation.
LO1 and LO2
D1 Evaluate how disruptive
digital innovation is
developed, embedded and
measured in an
organisational context.
LO2 Explore the different types of digital transformation
P3 Explain the different types
of digital transformation,
with examples.
M2 Appraise the role of
business strategy to apply
each type of digital
transformation in an
organisational context.
LO3 Explain the requirements for a successful digital
transformation
P4 Explain the requirements
for a successful digital
transformation process for
an organisation.
P5 Build a transformation
business case for an
organisation, including ways
to access funding.
M3 Build a detailed digital
transformation business case
that includes how to measure
its overall effectiveness using
appropriate techniques
available to test, iterate and
improve.
LO4 Review the range of methods for protecting ideas as
part of digital transformation strategies and understand their
advantages and disadvantages
P6 Explain the different tools
that organisations can use to
develop, retain and protect
knowledge and intellectual
property.
LO3 and LO4
D2 Evaluate the nature of
digital transformation and
the context in which it is
developed, providing
evidence-based judgements
on how organisations can
overcome challenges to
develop successful digital
transformation frameworks.
M4 Present supported
evidence-based evaluation of
these different tools in the
context of the wider business
environment.
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Recommended Resources
Textbooks
Bessant J. and Tidd, J. (2015) Innovation and Entrepreneurship. 3rd Ed. Oxford: Wiley.
Drucker, P. (2006) Innovation and Entrepreneurship. London: Harper Business.
Matthews, C. and Brueggemann, R. (2015) Innovation and Entrepreneurship:
A Competency Framework. London: Routledge.
Trott, P. (2012) Innovation Management and New Product Development. Harlow:
Pearson.
Valikangas, L. and Gibbert, M. (2015) Strategic Innovation: The Definitive Guide to Outlier
Strategies. London: Pearson FT Press.
Rogers, D. L. (2016). The digital transformation playbook: Rethink your business for the
digital age. Columbia University Press.
Ustundag, A. and Cevikcan, E. (2017). Industry 4.0: managing the digital transformation.
Cham: Springer International Publishing.
Bounfour, A. (2016). Digital futures, digital transformation. Progress in IS. Cham:
Springer International Publishing.
Links
This unit links to the following related unit:
Unit 21: Emerging Technologies
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Specification – Issue 2 – September 2021 © Pearson Education Limited 2021