In simple terms, business innovation can be identified as a practical implementation of ideas that will result from the introduction of new goods and services or improve the current status of existing goods and services. The process of innovation involves the creation, development, and implementation of a new product or a service or add value by improving an existing product.
With the increase of globalization, competition, and the increase of customer expectations from the product and service manufacturers, most of the businesses have identified the importance of the concept of innovation to survive in the market and to achieve more market share in the target market.
With the technological advancements taking over almost all the business industries, combining business innovation ideas with technological advancements help the businesses to overcome most of the barriers in implementing innovative concepts in the businesses.
What is Business Innovation?
Business innovation is when the business organizations implement new processes, ideas, products, or services with the intention of boosting the final outcome of the companies. It can be either launching a new product or a service to the market or improving an existing product or a service by adding new elements, improving efficiency, creating more productivity, or reducing the cost or production time.
Launching a new product will lead to higher revenue for the business organization and improvements in the existing products can lead to cost and time savings to the business and increase the revenue. The most important element of business innovation is its ability to create a positive impact on the revenue of the organization.
However, innovation can be a confusing topic as many people use the term differently. While some people use the innovation concept as a catchphrase for simply using the technology to make changes, the true meaning of business innovation is limited to creating changes to the core business of an organization which leads to growth and profitability.
Importance of Business Innovation
Increasing the efficiency of business activities
Many businesses use innovation concepts to create changes in the existing production processes. It helps the processes to reduce cost and production time, improve efficiency and productivity as well as the sustainability of the outcome. It helps the business to face the volatility and the risk through changes.
Facing the potential disruption
The market is volatile and customer expectations are changing rapidly. Since the changing consumer demand, businesses often have to go through losses. Business innovation helps organizations to predict and identify potential changes, make strategic decisions to use the changes in a favorable manner. In addition, identifying the potential disruptions makes the internal employees of the organization more entrepreneurial as they have to come up with innovative solutions for the interferences.
It is identified that the organizations that use business innovation concepts in their production processes are standing out in the market. Consumers are more willing to buy from companies that pursue innovation than the companies that use traditional business processes. The businesses that use business innovation can satisfy more customer needs and create brand loyalty for the products.
Attract new talents and retention
It is identified that the new generations such as millennials and Generation Z are more technology-driven than baby boomers and generation X. They strive to work for mission-driven, fast-moving companies who are open to making changes to be in alignment with changing business environment.
Attracting such talents to the business, use their talents to improve the business innovation, and retain such talented employees while providing them opportunities to enhance their talents can create a win-win situation for the businesses.