When Czech-Austrian composer Gustav Mahler became the music director of the New York Philharmonic in 1909, he dramatically transformed the existing orchestra into the powerhouse of orchestral performance we recognize today. His meticulous attitude regarding musical excellence can be summed up by his opinion that “all that is not perfect down to the smallest detail is doomed to perish.”
But is perfection possible? Of course not. That’s why innovation is key in moving philharmonics (and companies) forward and maintaining competitive advantage. Perhaps it is the pursuit of continuous innovation, down to the smallest detail, that allows organizations to flourish.
One important innovation for organizations is that of the enterprise system (ES), which is a packaged software solution that integrates and manages an organization’s common core business processes across functions.
Despite the obvious benefits of ES, some argue that they limit continuous innovation. That is why Walton College’s Varun Grover, Sachithra Lokuge (University of Southern Queensland), Darshana Sedera (Southern Cross University), and Suprateek Sarker (University of Virginia) seek to investigate how organizations are using incumbent ES as a platform for newer, nimbler digital technologies to achieve innovation. Their research, “Orchestrating digital technologies with incumbent enterprise systems for attaining innovation,” uses the theoretical foundation of orchestration theory to offer practical insights and close the gap in research.
The Opening Note or Liquid Concrete?
In the late 1990s, businesses adopted what is considered one of the most significant IT developments: the enterprise system. Because of an ES’s ability to enhance operational efficiency and the effectiveness of existing processes, organizations could now integrate, centralize data, and standardize processes.
By implementing enterprise systems, companies have found that they can achieve a long-term competitive advantage by standardizing and unifying business functions on a single platform, thereby eliminating business silos. Silos—specialized yet isolated departments that limit information sharing—often restrict the flow of information and interdepartmental collaboration within an organization, reducing the ability to innovate.
Even though organizations can innovate with enterprise systems—as they serve as a building block to integrate new products and digital technologies—costly upgrades, limited support for continuous innovation, and a lack of flexibility leave some wondering if they have a continuous role in future innovation.
This inflexibility is highlighted by the industry joke that using an enterprise system is like “pouring concrete into a company.”
On the other hand, digital technologies, such as AI, cloud, and mobile technologies, minimize barriers to innovation. Their ease of adoption, usability, cost efficiency, and ease of connectivity create incentives for stakeholders to incorporate these with existing ES. Prior research notes that this creates vast opportunities within organizations and value creation for customers, thus creating a competitive edge for those early adopters.
Therefore, Grover and his coauthors asked two questions: 1) What is the innate nature of the ES and digital technologies in relation to organizational innovation, and 2) How can ES and digital technologies be purposely combined?
Technology Orchestration
To answer these questions, Grover and his colleagues first challenged the vocabulary used in previous research. To accurately depict how these systems interact, the researchers determined that “integration” fails to describe the philosophical role of technologies fully and provides a myopic view of how they are connected. Instead, a more holistic term, “orchestration,” is used to connect theory to practice.
Additionally, the researchers argue that orchestration, rather than integration, better clarifies the non-linear complexity of the phases of innovation: ideation, prototyping, incubation, implementation, and management.
Grover and his coauthors used Instrumental Orchestration Theory (IOT) to explain the roles of technologies as though they are integral parts of an orchestra. For example, the technologies themselves represent the instruments, the CIO or relevant LOB manager represents the orchestrator who arranges “the music” through ideation, and the innovation initiator represents the conductor who might “change the tune” based on the reaction of the crowd (customers and other stakeholders).
A Steady Rhythm, Harmony Serve as the Basis for Innovation
By gathering data from four “brick-and-mortar” organizations that had a mature, popular (such as SAP) ES in place and had initiated an innovative IT project using digital technologies, the authors could observe the governance structures of integration processes.
Grover and his colleagues found that ES with a stable platform provides a reliable and consistent backbone in which to connect with digital technologies. The characteristics of a stable ES include access to quality and consistent data, standardized business processes and information transparency. Essentially, if a digital technology is working with accurate and dependable information, innovation is far more likely to occur.
Furthermore, a stable ES allows organizations to initiate innovation with new digital technologies. As technology continues to evolve, early adoption can significantly enhance productivity and improve the customer experience, ultimately providing organizations with a competitive advantage. A stable ES allows for the flexibility to connect these contemporary technologies through third-party applications as well as facilitate a “plug-and-play” feature.
This “plug-and-play” capability captures the instrumentalization role in the innovation process. The digital technologies can act as standalone solutions or in combination with existing ES. For example, the orchestrator of one company highlighted that mobile technologies enable staff to login to internal systems using personal devices.
The integration of ES with digital technology serves as a value driver for firms. When organizations initiate innovation, they largely turn toward digital technologies, such as mobile apps and cloud services. They recognize that harnessing these technologies together, rather than in isolation, achieves harmony.
Coda
This research presents a novel theory that provides answers to an old problem. By identifying “orchestration” as a more comprehensive concept, the authors provide a richer context for future research and industry leaders considering how disparate technologies can work together.
Grover’s research provides a guiding framework for understanding how ES and digital technologies can drive innovation, a key value driver for firms. The practical guidelines outlined in this framework clarify how to orchestrate incumbent systems with new technologies with greater efficiency and agility.
Because no system is perfect, innovation must exist to meet the ever-changing and diverse needs of managers, employees, and customers. Organizations that strive to use strategic methods in orchestrating ES with contemporary tech will not be “doomed to perish,” after all. Instead, they’re setting the stage for continuous improvement and innovation.
Sarah Luhtanen serves as the Lead Editorial Assistant for Walton Insights. Following
a fourteen-year career in public education, she continues to focus on teaching, public
service, and advocacy by advising local political campaigns. Through this work, she
hopes to increase political participation and civic engagement among women and underrepresented
communities. Sarah received her B.A. in journalism and English and M.A.T. from the
University of Arkansas. She is also a member of the fourth cohort of the LBJ Women’s
Campaign School at the University of Texas at Austin.
