Continuous renewal of digital services is vital for today’s businesses

Digital services have long been developed as projects. There would be a beginning, an end and a solution. Now the world is changing so rapidly that the project-based approach to development is no longer sufficient.

If services are not constantly developing, they tend to lag behind their users’ needs and competitors’ pace.

Operating models that were originally developed for the needs of software engineering, such as SAFeandDevOps,have now, along with digitalisation, been established in more traditional sectors as well, ranging from finance to manufacturing and retail. For example, the telecommunications and digital services provider Elisa and the financial services company OP Group have adopted an experimental culture where digital services are improved continuously in small steps, new features are quickly taken into production, and failures are regarded as opportunities to learn.

Similar practices have also been deployed in the digitalisation of maintenance services for elevator and escalator manufacturer KONE as well as in the retail sector by Kesko and S-Group where customer data steers the ongoing development of apps.

Even though the phenomenon is no longer new, in many organisations the transformation remains incomplete: How can continuous digital service innovation be established throughout an organisation, not just in individual teams?

Continuous digital service innovation is built on three levels

In our study, we have looked at enabling continuous digital service innovations in Finnish companies through three interconnected levels.

At the organisation level, the leadershipand culture determine the direction. Continuous innovation arises from a culture where experiments are allowed and mistakes are seen as part of learning. This is relevant only if leadership supports such an approach not just in what it says, but also in what it does – in the strategy, resources and structures it provides to support continuous innovation. The biggest obstacles are related to silos, those internal boundaries within the organisation that prevent information and responsibilities from crossing team or departmental borders. Dismantling such silos takes time and calls for a long-term effort.

In short, the biggest obstacles to continuous innovation are not related to technology, but to the culture and structures within organisations.

At the team level, daily rhythmand cooperation are decisive. Agile methods bring about a structure where work is divided into small parts and feedback is received quickly. Sometimes, however, excessive speed and flexibility can be counterproductive. An essential point here is balance: sufficient structure and predictability, but at the same time being able to adapt quickly to changing needs.

A key to enabling continuous innovation comprises cross-functional teams which combine technology, business and customer knowledge. Building such teams is not always easy since the roles, languages and indicators for these functions do differ. When it succeeds, however, cross-functionality makes continuous digital service innovation a genuinely shared notion within the whole organisation.

At the individual level,there must be time and space for participation. A service innovation may not remain as “an extra effort” alongside other operational task. For continuous development, enough time and other resources need to be reserved for this purpose. Automation promises to free up resources, but often the remaining responsibilities become concentrated on a few people, leaving less time for innovation.

When these three levels are successfully interlinked, it brings about a flow-like phenomenon: Instead of proceeding one project at a time, digital services are continuously renewed. 

In Finland, the high standard of technological competence is a strength, but it turns into a competitive asset only when companies manage to integrate continuous digital service innovation into everyday practices.

Open questions to research and companies

Many interesting questions remain unanswered, among them:

• How does continuous digital service innovation take shape in industries where the change is slower than in purely online services?
• When is a digital service innovation genuinely continuous, and by what indicators can it be measured? What kind of indicators can tell that an organisation is really continuously reforming and not just keeping up what already exists?
• How can networks of several organisations jointly generate continuous innovation?
• What kind of new possibilities do data and AI create to support continuous service innovation?

The writer Jenny Elo is a doctoral researcher in the Faculty of Information Technology, University of Jyväskylä. She is a member of the Value Creation for Cyber-Physical Systems and Services (CPSS) research team. The team is part of the Finnish Hub for Digitalization centre, which brings together expertise from the Universities of Jyväskylä, LUT, Tampere, Aalto, Vaasa, and Eastern Finland. The centre produces internationally high-quality research on the themes of digitalisation and digital innovation.