Performance Measurement and Management in the digital era

Digital technologies have improved business operations through advanced connectivity, easy access to information, and integrated activities, which all of them create many opportunities for digital innovation. Because of the complex nature of digital technologies and the key role of digital technologies in digital innovation, managing digital innovation is challenging. Therefore, there is a need for new capabilities and strategies to manage digital innovation. Furthermore, it is necessary to investigate on the way to manage digital innovation by using digital-related capabilities, and digital business strategies. This research used managers’ perception reported data collected through survey questionnaire of 280 SMEs, who operate both in service and manufacturing industries in Finland. The results of the study showed that companies need both digital-related-capabilities and digital business strategies for management of digital innovation.

Managing Digital Innovation through digital-related-capabilities

Digital innovation defined as creating both market offerings and business processes using digital technologies. The results of the study determined digital-related capabilities in terms of human, collaboration, technical, and innovation as the influential capabilities to manage digital innovation. The results of the study revealed that innovation capability plays an important role in managing digital innovation. In other words, managers of the SMEs can enhance the possibility for better management of digital innovation by improving the innovation capabilities at their companies.

Managing Digital Innovation through digital business strategies

In addition to digital-related-capabilities, there is a need for digital business strategies to manage digital innovation. The result of the study showed that to effectively manage digital innovation, there is a need for digital business strategies. Furthermore, to realize digital business strategies, two determinant elements such managerial and operational capabilities are necessary. Moreover, the results of the study revealed that managers of the SMEs can improve their ability to effectively manage digital innovation by enhancing operational capabilities, as one of the determinants of digital business strategies. The findings will support managers to search for opportunities to create new digital products and services while identifying which capabilities enable firms to realize digital business strategies.

Mina Nasiri received an encouragement grant from The Finnish Foundation for Technology Promotion in 2019. She received her PhD from the LUT University in 2021.