Why the Enterprise Digital Lab is Failing Us

Why the Enterprise Digital Lab is Failing us

This last decade has seen the concept of the Digital Lab take shape across a whole spectrum of industries and organizations. CIO’s and CTO’s have developed an entirely new language to describe the forces of disruption and change within the industries that they preside. The Digital Lab has evolved in response to perceived threats by incumbent enterprises of new, more aggressive challengers.

The concept is simple, take a subsection of smart people from within an existing organization, ring fence that off from corporate governance, and allocate a pool of funds to be invested in new ideas and innovation. Certainly, on the surface this seems like an excellent idea. One thing that corporate enterprises have in abundance are human resources, and investment capital. Having been involved first hand in the development of corporate innovation labs we can testify that the execution is somewhat more complex than the initial blueprint. To understand why Digital Labs in the enterprise space tend not to live up to expectations we first need to look at why they succeed so well in startup land.

As an analogy let us take Darwin’s “survival of the fittest” concept and examine that in the context of a tech startup. Tech startups have a finite amount of money to spend, employees tend to have vested interests in success (such as stock options, equity etc.), everyone involved lives or dies by the success or failure of the program. Employee salaries are also controlled, with increases and bonuses directly tied to success. In the case of an Enterprise the story is very different. Software development professionals assigned to a Digital Lab maybe on short-term lease from careers within the group, they come across with high costs and only partial commitment to programs. Stakeholders are typically on the corporate payroll with no equity, or options, so speed of success is not of paramount importance.

Governance in a large corporate business is also not easy to cut off, whatever the circumstances, and however hard an attempt is made to create lean frameworks of governance, politics remains a challenge. Unfortunately, the corporate digital lab whilst not entirely without merit will for these reasons never compare with externally based counterparts. The app development function within Red Sky Digital Singapore operates as an external digital lab for its customers. Our app development professionals form an integral part of our company and have proven time and again that they have the delivery capabilities needed to create disruptive technology products.

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