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CS5605 - Digital Innovation Assignment - Brunel University London, UK

Topic - DIGITAL INNOVATION IN INDUSTRY 4.0 - A business model demonstrates how an organisation creates and delivers value to customers. Developments in digital innovation such as Industry 4.0 have changed the traditional balance between customer and supplier. Use a single case study of your choice to critically analyse and illustrate how to build a digital business model for the organisation to make profit from the adoption of Industry 4.0 and use a short science-fiction story to demonstrate how to improve the organisation's performance in the future.

Learning Outcome 1: Describe and discuss the state-of-the-art in digital business improvement and change.

Learning Outcome 2: Demonstrate practical skills related to digital business improvement and change.

Learning Outcome 3: Reflect critically on the state-of-the-art of theory and practice in digital business improvement and change.

1. Literature review on the relevant theories or methods (note: what you need to review here is business models or change management theories or data management methods, but not Industry 4.0 which can be introduced as the background information in Introduction);

1. Literature Review

Evolution of Industry 4.0

In order to indulge in the background of the industry 4.0, one needs to date back to the origin of this revolution. As per Stearns (2018), the first industrial revolution started in England during the 18th century when hand production methods turned into machines. The industrialisation process took place and flamed the revolution in England, America and other parts of Europe. This revolution contributed to an incredible rise in the growth of population. Textiles being the pioneering industry of industrial revolution, impacted mostly on job market and capitalism of money. The textile industry implemented the use of modern tools and affected all other industries for a modernised revolution. This particular revolution in England affected every part of daily life, thus, proved to be one of the most significant factors in history.

The stabilization of GDP was possible before the industrial revolution, but after the arrival of modern capitalist economy it evolved into the era of per capita economic growth. The second industrial revolution paved the path for mass production, growth of steel plants and electrical grid system. This revolution also channelized the manufacture of machine tools and use of modern machinery tools in steam powered factories. In these modern industries each and every source of work is dominated by technology and controlled digitally (Gilchrist, 2016). The digital platforms changed the way of work completely and included the implementation of innovative ideas into industrial work. In this modern era, every aspect of business from its manufacturing to delivery is controlled digitally. As per Roblek et al. (2016), this digital revolution changed the whole scenario of industrial revolution as it improved efficiencies in dealing with customer related problems and improved the competition market of the business. This transformation also enhanced the expansion of business into the global market. The advent of mobile, data and social media proves to be the evolution in digital transformation and it implemented innovation within the business market completely.

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Change Management

Change management plays an important role in management field regarding business in this century. Change management is effective in helping to adapt new technology and co-operative processes in the modern era. According to the view of Cameron and Green (2015), management skills and leadership qualities are two important factors relating to change. This research states the qualities that a leader needs in order to succeed in an organisational context. A leader needs to be well aware of the business environment and requires a clear knowledge on the necessary changes that need to be implemented within the organisation. The leaders also need to develop better skills in decision-making processes in order to make the necessary changes within the organisational functions.

One of the most important criteria of change management in order to be successful is to be more collaborative and have proper skills in communication skills. Skills relating to communication are one of the most important factors in every organisation and contribute to effective understanding between people (Harmon et al. 2015). Communication contributes to rigidity in an organisation and can help to develop transparency between people in order to ensure proper accomplishment of the change management goals.

Digital and technological changes are also major important factors for organisations in the modern era. It is a significant part of an organisation due to the fact that in modern times, everything leads to the use of computer and online platforms. So in order to adapt changes one needs to be more efficient in using computers and various newly implemented digital platforms. According to Hornstein (2015), it is very important for an organisation to keep track of the effectiveness in using computers in order to make changes in their products and services. The evolution of products has contributed to higher number of customers and has helped in the development of brand loyalty and increased customer satisfaction levels. Therefore, in order to attract customers, a company needs to adapt to continuous changes that are happening every day. Additionally, the implementation of changes in payment processes due to the creation of bitcoins has also contributed to proper use of change management processes.

ADKAR Model

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ADKAR Model, introduced by Jeff Hatt, is a potential tool relating to change management that helps an organisation to set and achieve potential goals. Some of the key components of the ADKAR Model include achievement, success, awareness, and desire to win. The significant helping factor of this model is that it helps a company to adapt to modernised changes (Gilani et al. 2018). This model instigates some important factors like awareness and desire of a certain person or group to develop change. Awareness relating an organisation helps a leader to know his or her strengths and weaknesses and then allows with the opportunities to actively work on it. Additionally, the desire to accomplish personal goals can help in building a strong mindset to reach operational goals that were set before achieving success. Therefore, desire and awareness both are important factors in the field of business and management on the basis of the ADKAR Model.

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The ADKAR model also helps to find potential methods to adapt to change that are helpful in every way in this modern world of technology (Tang, 2019). Therefore, in consideration of the functionality of an organisation change management plays a crucial role in adapting modern technology. This model needs high levels of engagement and involvement relating to change. In order to get clear ideas about this model Mr. Hatt stated that this model works as a change machine that helps in changing a company's view about success and make a company aware of the facts relating to change. This model has proved to be the initiator of methodical change in managerial aspects and helps a company to realize their goals.

The change in people's mindsets and thought processes create a perceptual change which is helpful for a company to change their products and services. Change management being one of the key factors relating to business, contributes to improved growth of the business based on digital platforms. Change management also impacts the change in a person's mindset in order to adapt certain things that are inevitable in this modern world. This model addresses a large range of customers and helps them to adapt to change. Additionally, the ADKAR Model helps in resisting a certain change and adapting through a permanent process (Tang, 2019). The model also revives the learning process and helps in ensuring positive skill development and behaviour in order to achieve goals. The main motive of awareness is to make the employees aware of the change that is happening. Therefore, employees need to be open to exploring these new ideas and need to support the change that is happening.

Targeted approach relating to the elementary process of change is very much sensible to utilize. The development of change is a sensitive issue and needs this very model to fulfil it. This model not only helps a company to be successful but it also helps in determining the facts due to which the company is not successful. This model basically evaluates the changes of the market and then helps the organisation with full-proof strategies to dignify it and ensure complete change.

Kurt Lewin 3 Phase Model

This model is one of the easiest ways to learn management theories as it describes the practical part of the business. It also represents the changing process that is associated with the building of management and leadership positions. As per Hussain et al. (2018), this model deals with freezing, moving and unfreezing of business ideas that are required in order to grow the prosperity of a business. This process is basically a way to make the employees understand that the company needs to undergo changes in order to compete in the current market situation. It also hinders the sectional change of resistance that is needed in order to follow the guidelines of evolution. Communication is one of the important key elements for the organisation as change management requires transparency among employees and organisational leaders.

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Organisations offer a healthy environment to enrich the process of change management. This model also helps to undergo the change and precision that is needed to change the analytical part of the situation. The transition phase of the situation that the company engrossed is to be well built in the case of revolution. As per Cummings et al. (2016), this model has a freezing phase in its core division to enrich the customer satisfaction. Thus, by providing the needs of customers the organisation can provide a strong ground of customer satisfaction and prohibition of the customer's interest. This model exhibits the interest of the society and the people who were loyal to them in case of any provisional needs. In order to keep the momentum alive, the organisation needs to keep an eye on problems faced by their employees in any case, thus, developing an efficient ground on their position and believing the thought process of change. This proportion can help to enrich the thought of customer satisfaction and resisting negative change in products. Thus, by providing solidity to the change and customer satisfaction, Kurt Lewin model proved to be one of the most efficient change models in business management and revolution.

Kotter's 8 Step Model

Kotter's 8 Step Model deals with the use of eight complimentary steps that can help to implement changes within an organisation. These changes are highly important for ensuring proper accomplishment of project goals and the implementation of modernised ideas within an organisation.

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The various steps involved are as follows:

Creation of a sense of urgency

This steps deals with making employees to be mindful of the need for change within the brand. This can be ensured by proper communication and understanding between employee groups. Making employees mindful of the need and desperation for change can help in improving the ability of the organization in achieving the necessary goal (Loganathan, 2019). This process can be conducted by high transparency in communication. It requires an open, legit and persuading communication in order to gain positive views from employees, managers and board of directors within an organization. Additionally, various potential dangers that the organisation may face due to the implementation of these new changes also need to be taken into account.

Forming a Powerful Coalition

This phase deals with the development of an effective team that can help in working towards the implementation of a certain goal. Strong leadership and support is necessary in order to bring about the required changes within an organisational context. This phase of the model can help to identify potential leaders and individuals with the necessary skills within an organisation that can help in ensuring proper implementation of change management processes.

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Creating a Vision for Change

Many great ideas and solutions are available within organizational systems which may be implemented in the new strategic actions.However, blending these solutions are important in the creation of new ideas and concepts. A clear framing of brand goals, objectives and visions are necessary in order to accomplish new changes.

Communicating the vision

Proper provision of knowledge regarding the vision for the organisation can help employees to engage in specific activities that can help to provide increased abilities in terms of brand accomplishments. Additionally, the employee performances can be greatly improved with the provision of a certain goal and methods to attain them.

Removing Obstacles

This phase deals with ensuring that there are no resistances or obstacles in regards to the implementation of change management processes. This phase guarantees that the authoritative procedures and structure are aligned with the mission and vision of the organization. Constantly checking for obstructions or individuals who are opposing change can be effective in dealing with issues in regards to resistance to change.

Creating short-term wins

The creation of short term goals is effective in helping employees to accomplish small tasks. The proper accomplishment of small tasks within necessary time-frames is essential in the development of better motivation (Small et al. 2016). This improved motivation can help to develop positive mindsets of employees towards the changes over the long term.

Consolidating improvements

Change is a slow process and declaration of any change strategies as a victory early on can lead to failures. This phase ensures proper testing of the change processes over the short term in order to achieve the necessary goals over the long term.

Anchoring the stages

This stage deals with the final implementation of the change processes within necessary time-frames. It also helps in reviewing the modernised change management ideas used and the methods by which they can be improved.

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2.  Analysis of the case study of your own choice, by using a theory or method introduced in the literature review;

Case Study

Industry 4.0 is the subset of the fourth generation industrial revolution and it has real concern regarding industry (Burmeister et al. 2016). Tesco has taken help of the industry 4.0 and it has eased its supply with super industrial development and revolution in the areas where normally the industrial products are sold. The 4.0 innovation that Tesco uses is interchangeable and is referred to the concept of factories where machines are augmented with the facility to work in a wireless connection and sensor. The 4.0 innovation system that Tesco uses is serving the new era customers and it has joined with the AIS mobile service provider, in order to serve them. The strategic partnership is using the concepts of four aspects that include products, convenience, value and experience. The strategic partnership has helped almost 15 million Tesco customers and 40 million AIS subscribers. Strategic partnership has helped in getting the innovation and as partnership helps in bringing new business and new customers, it helps in bringing new technologies and business model ideas, and the entire industry gets ground up (Morrar et al. 2017). Innovation in Tesco has helped the company to reach an edge to penetrate the market and make the moves faster. The partnership has added new opportunities with development and opened up better connection for Tesco for being partner with AIS.

There has been convenience and facility to buy new products and customers and benefitted under the new roof of added advantage of both the companies. The customers gained additional privilege on everything that they spent on services and products. For instance, Prattana Leelapanag, chief business consumer officer at AIS has reported that partnership of Tesco with AIS has marked an edge with most important constructed milestone of a cross industry. Tesco, being a leading retailer has a huge client who can get benefitted of the mobile service from AIS and vice versa.

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As opined by Reischauer, (2018) advanced digital technology is already being used that includes intranet for the purpose to serve better platform for customers and to serve their queries. This will lead to help employees to understand the work of the industry and efficiency can be tracked along with changed traditional production. There is a relationship between human and machine and the above figure of the technologies is expected to for the building blocks of innovation 4.0.

Companies face formidable challenges in adopting challenges, however, Tesco has been able to adapt to the technological development where people want to pay their bills through online payment and order their products through online carts only because of partnership with AIS. The mobile service has helped the customer to get protection of data. Industry 4.0 has helped Tesco in supporting the challenges of implementation through robots and big data analysis. This new era innovation will help in manufacturing and thus the economic growth will increase through digital transformation. Thus it helped in increasing the sustainability by building capabilities, processes and mindsets.

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3. Critical reflection and discussion on the case study;

Critical Reflection and Discussion

TESCO needs the ADKAR model to adapt changes relating to business and the clear expansion of their management system. This model (ADKAR) can also help TESCO to maintain strong platform and to confront the disasters of the modern industry that may cause harm for the organisation. A business company like TESCO always needs to be one step ahead in management skills and behaviour in oder to achieve competitive advantages in the current market. Therefore, the necessary changes that require implementation can be created by the ADKAR MODEL. From a business point of view, this model helps TESCO in identifying the effects relating to drop of sales and production in the market. TESCO with its feedback from market can try and develop new innovative ideas relating to the directional change of their company.

TESCO realised that in order to succeed and be a part of the competition market, they need to take precautionary measures regarding change management. Taking necessary measures can helps them with achieving high customer satisfaction and gaining a positive market feedback. They need to have an efficient innovative plan in relation to the market scenario. Change management also plays a crucial role in this field and the new changes need to be faced by both the company and its employees (Bejinariu et al. 2017). Therefore, Tesco need to adopt new ideologies and have a clear knowledge about change. Additionally, they also need to make their employees aware about the change and prevent the resistance of employees towards the change. They need to take proper initiatives in order to be successful as a company.

The change in the company policies and operations and the change in their products can have a direct impact on the way people would react to it. The main scenario relating to the change of a company is that it remains under strong pressure to develop change in their products (Morrar et al. 2017). In order to create tremendous pressure, external competitive environment plays an important role as it can pressurize a certain company to provide their best performances and services. To cope up with the competitive market a company faces tremendous challenges that obstruct them from reach their goals. The company needs to think about product, service and outcome as these three factors play a key role in the business market. The company needs to adopt the precautionary change to meet those factors. Technological enhancements must be made to encourage that TESCO, as a company, can find better ways to cope up with the competitive market. Thematic analysis of TESCO proved that in order to evolve their company in this current market, TESCO needs to utilize common effects of change. Correct documentation of methods relating to change management can help TESCO to reach the goals that were set by the brand. Organisational change is needed in order to enhance the possibilities regarding market competency as well as customer feedback.

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4. The aim and objectives of the essay;

Aims and Objectives of the Study

The main problem involved in this research is to examine the concept of digital innovation of a company in the modern industry 4.0. The change management plays a crucial role in this particular study. Industrial revolution and evolution is the main objective of this research study. This study also focuses on the changes made by employees in order to stabilize an organisation. Changes regarding organisation to adapt modern technology and implement them in their organisation is proved to be an important discussion for this particular topic. This topic also aims to prove the precautionary effect of change management relating to the feedback of customers.

Manufacturing products with serious efficiency is an evolving factor regarding the modern industrial revolution. In this study the focus is on the revolution of modern day business that involves technology and digital processes of innovation. The business operations in modern times need to be adaptive to change management in order to gain a respectful place in the current market. Companies with lack of business skills and adaptiveness towards change will lose some serious competitive advantage and will be unable to compete in the modern business market. Adoption of change is inevitable in the modern era considering the competition in the business market and this change is for the betterment of the particular organisation.

The prime aims of the study are to evaluate various factors involved in digital innovation processes in the modern industry and the various methods that can be used to implement the necessary change.

The objectives of the project have been provided as follows:

  • To determine the factors involved in digital innovation processes in the modern industry 4.0
  • To analyse the effectiveness of change management processes on the implementation of digital innovation in the modern industry.
  • To evaluate the case study of Tesco in order to gain knowledge regarding the methods by which Tesco has implemented digital innovation procedures.

5. Conclusion

The concluding study relating to business management and the management system of TESCO proves that change management is a key factor for any business firm. TESCO proposed to build a strong platform for customer satisfaction using digital innovation procedures, which has contributed to the vivid growth of their market. The desire and attachment to succeed in this field is a necessary factor for change, based on the ADKAR model. By using web-services and co-operating with the employees, TESCO can find a suitable environment of change in their business strategy. A close communication with employees is needed to build a strong work base that will produce some great products in the market. In order to meet the needs of the customers and deliver according to their needs, TESCO needs to be aware of the changes in mindsets of their customers and the external situations affecting these changes. They also need proper feedback from the customers in order to make their products more innovative and improve brand sales. The evolution in the societal and behavioural aspects of mankind contributed to the idea of revolution. The digital innovation in modern industry is a part of that revolution and has led to the implementation of serious positive changes on various organisations.

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