Quantifying the Value of Digital Innovation in a Manufacturing Company

Abstract

The industrial landscape for GKN Aerospace has changed drastically and is anticipated to experience more disruptive changes in the future. To remain competitive, the current view of products needs to be re-innovated as well as finding new ways to compete in the forthcoming digital era. By taking an explorative approach, the conditions, in the context of digitalisation, for GKN Aerospace are studied and examined externally. Understanding the concept of value is imperative to grasp the full potential of digital innovation, this includes both the traditional monetary value and the intangible value such as company reputation, customer perception, brand, and employee satisfaction. This study thus explores the notion of value and digital maturity in the context of digital innovation. The internal application and utilisation of advanced technologies are the most common employment of digital innovation and are driven by a desire to increase the competitiveness and business resilience of the company. This employment of digital innovation is mostly reactive in its nature, revolved around the economical benefits, and occurs in proximity to the current core business. This essentially implies that the current business is improved and the company does what is already being done, but better; the organisation can e.g. increase operational performance, efficiency, and reduce costs. The findings suggest that organisations should shift the approach to a proactive stance in order to develop fundamental digital capabilities to (i) identify and capitalise on opportunities to create, deliver and capture value, and (ii) identify and mitigate potential threats and exogenous changes that may disrupt the industry in the future. Such, the current product offerings and current way of working should continuously be re-innovated, as the effects of “doing nothing” will result in a declining state where the current core business becomes obsolete.