IDT - The new organizing Logic of Digital Innovation: An agenda for IS-research

Question 1

Digital Innovation (definition)

Answer 1

Following Schumpeter (1934): as the carrying out of new combinations of digital and physical components to produce novel products (thus implying focus on product innovation). DI relies on digitization. Furthermore requires a firm to revisit its organizing logic and its use of IT infra.

Question 2

Digitization (definition)

Answer 2

Makes physical products programmable, addressable, sensible, communicable, memorable, traceable and associable

Question 3

Three unique characteristics of digital technology

Answer 3

1. Reprogrammability
2. Homogenization of data
3. The self-referential nature of digital technology

Question 4

Reprogrammability

Answer 4

A digital device consists of a Processing unit that executes instructions and a storage unit that holds both instructions and the data being manipulated in the same format (Langlois, 2007)

Question 5

Homogenization of data

Answer 5

While an analog signal maps changes in a continuously varying quantity, a digital signal maps those changes into a set of binary numbers (bits)

Furthermore, digital data originate from heterogeneous sources which can easily be combined with other digital data to deliver diverse services (this dissolves product and industry boundaries)

Question 6

The self-referential nature of digital technology

Answer 6

Means that digital innovation requires the use of digital technology. Therefore, the diffusion of digital innovation creates positive network externalities that further accelerate the creation and availability od digital devices, networks, services and content (Benkler, 2006 & Lyytinen, 2010)

Question 7

Layered Architecture of Digital Technology (definition)

Answer 7

An explanation of the different layers of digital technology. More specifically, these layers manifest two critical separations:

1. That between device and service (due to reprogrammability)
2. That between network and contents (due to homogenization of data)

Question 8

Layered Architecture (of Digital Technology)

Answer 8

Top to bottom:
* Contents Layer
* Service Layer
* Network Layer
(Logical transmission
Physical transport)
* Device Layer
(Logical capability
Physical machinery)

Question 9

The Layered Modular Architecture Continuum (definition)

Answer 9

Is a continuum between Modular Architecture and Layered Modular Architecture, defined by the degree of reprogrammability, homogenization of data and self-reference

Question 10

Integral Architecture (definition)

Answer 10

Characterized by a complex and overlapping mapping between functional elements and physical components, where the interfaces between components are not standardized and are tightly coupled (Ulrich, 1995)

Question 11

Modular Architecture (definition)

Answer 11

Characterized by its standardised interfaces between components, aka modularity (Schilling, 2000).

In addition, the design of a component is driven by functional requirements within the context of a certain product.

Key value creation results from agility in the ability to rapidly recombine components of a modular product positioned within a single design hierarchy, without sacrificing cost or quality (Sambmurthy et al, 2003)

Question 12

Modularity (definition)

Answer 12

General characteristic of a complex system that refers to the degree to which a product can be decomposed into components that can then be recombined (Schilling, 2000)

Question 13

Layered Modular Architecture (definition)

Answer 13

Is a hybrid between a modular architecture and a layered architecture, where the degree by which the layered architecture adds the generativity to modular architecture.

A LMA-based product can serve as a platform at one layer, and serve as a component at another. Firms can compete on one layer and coexist on other layers

Question 14

Doubly distributed character of the Layered Modular Architecture (define both)

Answer 14

Distributed because the primary source of creation of value creation comes from the mix and match capability of heterogeneous resources across layers

Doubly distributed because (a) control of the product components is distributed across multiple firms and (b) because product knowledge is distributed across heterogenous disciplines and communities

The firm needs to be capable to manage such a network to be able to create new meanings of products (Verganti, 2009), by constantly redefining product boundaries