Business Intelligence Applied: Implementing an Effective Information and Communications Technology Infrastructure

Improvement versus Innovation

Process change initiatives can be either improvements or innovations. An improvement is a change of a smaller scope than an innovation. Improvements are small changes that modify existing processes, and they may be one time or incremental and continual. Improvements are generally conceived or implemented in a bottom-up approach throughout the organization. For example, changing the way an auto insurance company produces insurance cards might be an improvement to that specific operating procedure, whereas changing the way policies are issued (which includes insurance cards) will probably require innovation.

An innovation is a large onetime initiative that creates a new process or examines the existing process for opportunities to enhance its output in a dramatic way. Innovation utilizes a clean-slate approach and is thus larger in scope than a process improvement. The clean-slate approach means that even existing processes are reviewed for innovation. New processes can be created or existing processes can be scrapped or redesigned to improve process output. Because of the clean-slate approach, which can sometimes be quite radical, process innovation is more risky than process improvement. Process innovations usually require a top-down management approach to ensure their success—you need top management buy-in and support for a risky innovation to be successful.

The different qualities of process improvement and process innovation are summarized in