Here is a brief excerpt from an article by Tom Davenport for Deloitte University Press. In it, he explains why and how ten types of innovation can be driven, supported, or measured with analytics. If you’re not using analytics for all ten types, you may not be optimizing your analytical capabilities. To read the complete article and check out others, please click here.

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A few weeks ago, I heard an interesting presentation by Larry Keeley of Deloitte Monitor’s Doblin Group, a company that consults on innovation. I had seen Doblin’s “Ten Types of Innovation” before, but hadn’t really paid enough attention to it. Keeley’s presentation reminded me that I thought it was the most complete listing of how companies can be innovative. It also made me wonder how many of the 10 types of innovation might involve analytics in some way.

So I started going through the list, one by one. I didn’t know how many might result in a hit—a link to analytics—when I started. Through the magic of ex-post-facto editing, I now know how many. I won’t spoil the secret, but here’s a hint: This essay is pretty long.

Profit model: Profit model innovation involves new ways to monetize a company’s offerings and assets. There is certainly an analytics spin on this form of innovation, in that many companies in both online and offline businesses are attempting to make profits with new data and analytics-based products and services. GE, Monsanto, and several large banks are among the traditional businesses that are exploring profit model innovation with analytics.

Network: Network-oriented innovations involve new products, services, or processes that are delivered across a business network or ecosystem. In analytics terms, this might involve delivering analytics to suppliers or partners in order to help them make better decisions. In another context, with the Internet of Things, companies almost always need to share sensor data with their ecosystems, and to define standards so that the information can be integrated and analyzed. More about this below.

Structure: To quote the Doblin/Deloitte website, “Structure innovations are focused on organizing company assets—hard, human, or intangible—in unique ways that create value.” In an analytics context, this would most likely mean creating new business units that focus on analytics or using new organizational formats that allow analysts to work with decision makers. Large banks, for example, have formed new business units to analyze customer data. Similarly, other businesses create a centralized group of analysts, and then “embed” many of them with key decision makers in business units and functions. Both of these could qualify as structural innovations.
Here’s a direct link to the complete article.

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Here’s a direct link to the complete article.

Tom Davenport, a world-renowned thought leader and author, is the President’s Distinguished Professor of Information Technology and Management at Babson College, a Fellow of the MIT Center for Digital Business, and an independent senior advisor to Deloitte Analytics.