Digital innovation strategy : a framework for creating business value for an airline organisation

Abstract

Digital innovation in the airline industry is a holistic approach that involves leveraging advanced technologies to improve customer service, drive value, and enhance efficiency. As a crucial strategic asset, digital innovation strengthens competitiveness and skills development within airlines. The sector's growing involvement with digital innovation reflects a commitment to experimenting with digital technologies and accelerating their adoption. However, the swift pace of technological change coupled with the high-costs of implementation and a lack of standardised protocols can often lead to fragmented customer experiences and operational silos. Addressing these challenges requires a focused strategy on integrating new technologies seamlessly with existing systems, ensuring interoperability, and aligning digital transformation with the overall business objectives to create a unified, customer-centric approach. This interpretive case study collected data from online questionnaires distributed to employees, customers, and suppliers of the airline organisation. The data analysis provided a detailed perspective on the organisation's agility and strategic approaches through diverse stakeholder lenses, revealing key themes that deepen theoretical knowledge. It concluded by connecting these insights to the core elements of a digital innovation strategy, aligning practical observations with the broader goal of strategic digital innovation. In addition, semi-structured interviews were conducted with the airline organisation's executive management team, executive foresight, and experience, which highlighted the practical challenges and opportunities in navigating digital transformation. This study introduced a layered digital innovation framework within an airline organisation operating in a volatile and rapidly evolving environment that demands an ability to innovate, scale, and revamp the organisational structure persistently to align with a digital innovation strategy. The first surrounding layer addresses factors critical to the core components: a company culture open to change, technological integration for smooth operations, and process efficiencies for scalability. The second layer presents outcomes such as improved decision-making and operational efficiency through optimised processes and strategic data use, integration of data and systems for better insights, and a culture of continuous digital improvement. The third layer highlights broader objectives like seamless customer and employee digital experiences, the emergence of new technologies, and overall digital transformation aiming for full integration of digital technology to enhance performance and competitiveness. The outermost layer represents strategic end goals like streamlined operations and new methodologies such as agile project management, data-driven strategy, and customer-centric product development. This study describes a multi-layered digital innovation strategy model with People, Technology, and Process at its core. These elements are foundational for any digital strategy, focusing on a prepared workforce, technological infrastructure, and efficient methodologies. Fundamental dynamic capabilities, such as sensing and seizing opportunities, navigating transitions, and transforming operations, are vital in fostering agility and resilience. These capabilities should inform and shape the foundation of a strategy focused on digital innovation, which rests on the interplay of human resources, processes, and technology. In the current fast-paced climate of the airline industry and its competitive market, it's crucial to devise a digital innovation framework that not only identifies but also effectively leverages the right strategic levers. Doing so is essential for extracting maximum business value from digital transformation efforts, ensuring they are well-aligned with the organisation's overarching goals and market demands. The study makes several significant theoretical contributions. Firstly, it deepens the understanding of digital innovation strategies in the airline industry, providing insights into how these strategies can be effectively developed and implemented. Secondly, it expands the knowledge of organisational agility and strategic alignment in the context of digital transformation, highlighting the critical factors that contribute to successful digital innovation. Lastly, the study provides a detailed theoretical framework that can be applied to similar industries facing rapid technological changes, offering a valuable reference for further research and practical application. Regarding practical contributions, the study offers actionable insights for airline executives on implementing and scaling digital innovations. It emphasises the importance of integrating new technologies with existing systems to ensure seamless operations and avoid operational silos. Additionally, the study identifies critical challenges and opportunities in digital transformation, providing practitioners with valuable information to develop effective strategies. This practical guidance can help airline organisations navigate the complexities of digital innovation and achieve their strategic objectives. Overall, the model advocates for a strategic, layered approach to digital innovation, where each level supports and amplifies the next, culminating in a business that is agile, efficient, and future-ready, thereby delivering substantial business value through enhanced competitive advantage, increased operational efficiency, and accelerated market responsiveness.