As one of the most overused buzzwords in the business lexicon, innovation is essential for companies to stay competitive and relevant — even more so in times of constant change. But innovating continues to be complicated and time-consuming. Here’s why tech leaders should approach innovation differently: Instead of “big bang” releases, go for incremental innovation.
Struggling to innovate constantly isn’t news, but it remains a massive issue that companies can’t shake off. Many factors contribute to this always-on challenge, including human resistance to change and a lack of resources, organizational culture and fear of failure. And of course, there’s the technology element in this equation, which plays a central role in the actual innovation.
There are three main reasons from the tech perspective why innovating remains problematic for most businesses:
Innovation is still perceived as a holy grail that needs ages to develop and implement.
Innovation is seen that way because the technology under the hood can only support “big bang” releases that must be carefully planned months — and perhaps years — in advance.
Still today, most organizations use legacy technology founded on outdated architectures, which becomes a roadblock to new ideas even when all the other factors exist for innovation to flourish.
Indeed, because of legacy technology constraints, organizations often let innovation initiatives pile up while waiting for some technology change or digital transformation to come and unlock them. This approach is a risk for the business: Innovation takes too long, risks increase and ROI is massively delayed.
So, how can businesses innovate fast and innovate often? Our experts at commercetools Mike Sharp, Chief Product Officer, and Matt Alberts, VP Global Solution Consulting, shared how incremental innovation powered by modern technology is the way for businesses to stand out from the crowd.
Overcoming innovation paralysis
The world-famous artist Vincent van Gogh once said, “Great things are done by a series of small things brought together.” Unknowingly, van Gogh spoke of a human truth that can be easily applied to technology and innovation.
The art of doing small things is the first step for businesses to overcome the paralysis of bringing new ideas to life. This is what we call incremental innovation: As the name suggests, companies can identify key business initiatives that can be repackaged into smaller, more manageable deliverables, and implement them step by step.
“Incremental innovation is a more agile approach to innovation, focusing on making smaller, meaningfully impactful changes on a regular basis,” said Mike Sharp. “Ultimately bringing more value, faster, and with lower risk.”
Incremental innovation, in a nutshell, is a more agile approach to systemic technology change. By splitting the technical aspect of the software into modular sections that can be treated individually, rather than updating the entire system for each release, it’s possible to experiment with new ideas, tackle opportunities as they come and keep the innovation ball rolling.
The technology supporting incremental innovation
Incremental innovation is all very well, but in order to make it a reality, your technology needs to support it. The fact is, if your business relies on legacy technology with a monolithic architecture, you’re limited to ship innovations. This is because these legacy systems are inflexible and unable to be broken down into separate components. So, every time you queue a change or update, this indivisible block of standardized software must be retested and deployed in its entirety.
In today’s fast-paced world, companies must innovate fast and often. Hence, a technology stack that cannot support incremental innovations increases the risk for your business to lose market relevance and competitive advantage. However, many business and tech leaders are concerned about the effort and costs associated with replatforming, especially as most companies have become more risk-averse after a crippling pandemic and face tighter budgets due to a looming economic downturn.
“There is a hesitance to invest in multi-year projects with an unclear ROI,” Matt Alberts acknowledged. “If you can see a large project start releasing a few months after the contract, there is a much higher likelihood to gain the confidence of senior management.”
Despite these challenges, data shows that at least half of businesses want to increase investments in digital modernization, with 66% accelerating investments in eCommerce. Also, 76% of retailers plan to increase spending on technology and services over the next years.These positive signs show enterprises are eager to move away from legacy systems in favor of more modern, agile and flexible solutions. And the good news: Migrating to a modern commerce solution can also be done incrementally.
Incremental modernization = Faster time-to-value
For companies modernizing their tech stacks with a “big bang” process to rebuild the complete architecture and release it in one operation face a risk-prone option. It requires thorough planning and high upfront implementation costs and the business value/ROI takes a really long time to happen.
Once again, the idea of doing things incrementally comes into sharper focus during the implementation phase. Especially as more modular and agile solutions are now available — think composable commerce built on MACH™-based architecture — it’s possible for businesses to migrate off monolithic platforms step by step. This process, commonly known as the strangler pattern, enables companies to monitor progress easily and control the migration every step of the way with smaller-scale deliverables.
“By focusing on key business impacting items, while also moving incrementally through an implementation, the business will realize value earlier than with big bang replacement projects,” Matt added. “ROI can be captured quicker and the team will be more capable at the time of project completion.”
Not only is the migration easier to manage, but it de-risks modernization efforts. Also, because it’s possible to implement new functions incrementally, businesses can get the value out of modern technologies without waiting months or even years. Unlocking value early and constantly enables companies to capture short-term wins while modernizing the entire infrastructure for sustainable, long-term growth. With faster ROI, it’s also easier to prove to senior management the value of incremental innovation.
Mike concluded: “Most of us have experienced the pain of large, overly complex and overwrought ‘change initiatives.’ Sometimes they’re required and there’s no way around them. But most of the time, business outcomes are improved if we take a more modular, incremental approach to change. This is particularly true when it comes to technology — innovate early, innovate often.”
3 additional benefits of incremental innovation in the commerce space
In addition to accelerated ROI and business value, there are several reasons why incremental innovation is the path forward for digital transformation and modernization in digital commerce:
Legacy solutions hinder companies from experimenting with new ideas, as any issue during implementation may bring down the complete system. The modular solutions of today turn this around, as each component can be implemented, updated and managed independently. That makes experimentation — and dealing with failure — an integral part of the innovation process. Companies can try out new things without the risk of downtime or crashes.
Sephora’s Chief Technology Officer, Sree Sreedhararaj, shared a great example of incremental innovation in action. The beauty retailer often experiments with new ideas and, sometimes, not every attempt will work. One such case was their augmented reality feature, Virtual Artist. After a trial period, the company put it on hold due to issues with color accuracy. During that experimentation phase, however, the Sephora team also learned that its online beauty advisor initiative proved successful after switching from live video chats to text chats with advisors. The key learnings for Sephora? One, embracing failure is part of innovation. And two, failures can help pivot strategies leading to great successes later.
That said, every tech tweak results in greater knowledge of the service, the team’s efficiencies and the customer’s expectations, leading to greater understanding and improvement of the product. And that cycle can continue for the next round of incremental improvement.
As Matt puts it, “Each step’s learnings makes the next step’s execution that much more confident.”
With incremental innovation, technology teams can refocus their work from fixing bugs and maintenance to shipping innovation. In an environment where iteration and experimentation are possible, tech professionals can say yes to delivering priorities that bring value, breaking down user journeys and the tech behind them into smaller pieces to release features faster.
This is precisely what the Canadian luxury menswear retailer Harry Rosen achieved with a modern commerce stack. Since migrating from a monolithic platform to composable commerce, the company has transformed its technology ecosystem. For example, with a monolithic platform, Harry Rosen had one production release every eight weeks with 50 tickets each. Now, the retailer has one production release every three days, comprised of five to 10 tickets per release.
Tech talent is hard to find, and companies that can provide an innovation-ready environment definitely have an advantage in keeping developers and tech professionals happy. After all, top engineers aren’t eager to work with outdated technology.
The CTO at Nuts.com, Alex Shiferman, encapsulates this benefit perfectly: “If you wanna retain your team and make them happy and make them excited to come to work every day, find a platform that’s developer-friendly. It’s not often talked about, but I think it’s pretty critical.”
Incremental innovation is the right approach for an uncertain future
Nobody knows what the future will bring, and even more so in technology. The world seems to move on from one crisis to another, and new trends arise every day. Leading businesses need a modern approach to deal with unpredictability and constant change — and incremental innovation — supported by modern tech like composable commerce and MACH — is the best way to stay atop new opportunities and bring brilliant ideas to life.
Ready to innovate fast and often in digital commerce? Explore how to transition from monolithic platforms to commercetools Composable Commerce with our migration guide.