This paper was presented at ISPIM Connects Bangkok – Partnering for an Innovative

Community, Bangkok, Thailand on 1-4 March 2020.

Mapping digital transformation activities to the ISO-

56002 innovation management standard: A literature
review

Rangsan Kiatpanont
King Mongkut’s University of Technology Thonburi (KMUTT) 126
Pracha Uthit Rd., Bang Mod, Thung Khru, Bangkok 10140, Thailand

E-mail: rangsan.k@mail.kmutt.ac.th

Abstract: While there are many innovation management standards published

during the last decade, only a few pieces of literature discussed their practical
implication. Digital innovation, on the contrary, is a very active field for both
scholars and practitioners. There is no well-defined framework to guide the
transformation journey. Empirical cases show many digital products, processes
or services are created as a result of innovation projects. Therefore, the guide for
innovation management should be able to navigate the digital transformation
journey. This article confirms the idea above by mapping digital transformation
(DX) literature into the framework provided by ISO-56002 innovation
management standard. Practitioners would benefit from this paper by having a
standard framework to guide their transformation journey.

Keywords: Digital Transformation (DX); Innovation Management standard;

ISO-56002; innovation management system (IMS); innovation strategy;
transformation strategy; digital capability; digital leadership; digital culture;
digital transformation process

1 Introduction

Innovation management standards, such as BS-7000 (British Standard, 2008), CEN/TS-

16555 (European Committee for Standardization, 2013) and ISO-56002 (ISO, 2019),
provide a guideline for companies to encourage and evaluate innovation development
starting from ideation to implementation. Surprisingly, scholars did not interest much in
discussing their implications in the practical context (Cerezo-Narváez et al., 2019). For
instance, by looking for the keyword “innovation management standard,” table 1 shows
less than 100 research articles during the last ten years.
Table 1 The number matched articles in major search engines (result as of 28/01/2020)

Search engine for academic articles The number of matched articles

Google Scholar 56
Microsoft academic 23
Web of Science 3

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This paper was presented at ISPIM Connects Bangkok – Partnering for an Innovative
Community, Bangkok, Thailand on 1-4 March 2020.

Sciencedirect 3

On the other hand, the concept of digital transformation (DX) is perceived as an

unavoidable process for organisations to stay in their business; both scholars and
practitioners are very active to develop concepts within this field. However, the field itself
is relatively new, and no well-defined framework was established yet. Thus, practitioners
are struggling to find their way for the transformation journey.
As a result, the main research objective of this paper is to map current literature in the field
of DX to the latest ISO-56002 innovation management standard by wishing to leverage the
guideline provided by ISO-56002 for implementing DX. For example, how to start their
transformation activities? What kind of systems should be put in place for driving
transformation?
Practitioners would benefit from this study due to they would have a systematic approach
for implementing DX. Moreover, by relying on innovation management standards,
companies would also benefit from mastering the innovation development process and
implementing the innovation management system (IMS) in place.
Besides, the integration of theoretical concepts between innovation management standards
and DX is currently limited within the academic literature. Researchers from both fields
could benefit different granularity provided by both topics.

2 Previous Work

Digital Transformation
Digital technologies are the main driver for disruption by disrupting the competitive
landscape, altering the consumer behaviour and expectation as well as increasing
availability of data (Vial, 2019). As a result, DX is perceived as an unavoidable process for
organisations to stay in their business by innovating value proposition, customer
experiences and internal process automation. However, while DX is a topic in favour
among practitioners. Reis et al. (2016) revealed that it had received little attention from the
scholar, at least until 2014. This statement is partially true because similar concepts were
previously developed, IT-enabled transformation since 1994 (Venkatraman, 1994) and
ICT-enabled transformation since 2009 (Weerakkody et al., 2009), although they instead
focus on business integration and automation.
To understand what is DX, many researchers have conducted systematic literature review
(Beck et al., 2018; Bockshecker et al., 2018; Morakanyane et al., 2017; Reis et al., 2016;
Schallmo et al., 2017). Nevertheless, there is no consensus among them yet. For example,
while some researchers consider it as a continuously evolutionary process, others also
consider it as a radical paradigm-shifting for companies. However, some agreement still
can be noticed as the use of digital technologies to cause changes in either business
operation, customer engagement or value realisation.
Also, Bockshecker et al. (2018) reviewed the differences among three keywords:
digitisation, digitalisation and DX. Digitisation referred to the technical aspects of

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changing analogue signal into digital information. Digitalisation, on the other hands,
focused on how digital technologies are affecting the organisations. Finally, DX instead
focused on the processes of organisational change driven by the development of digital
technologies.
However, while DX implies the process of change, minimal literature contributes to
suggest the practical guideline to perform the transformation. For example, Hess et al.
(2016) explored DX options by providing a set of strategic questions. Sebastian (2017)
mentioned three critical success factors for DX comprising a digital strategy, an operational
backbone and a digital service platform. As a result, even if companies are well aware of
the necessity of transformation, the implementation might not be straight forward because
it is not very clear regarding how to start and what are the steps and implementation
milestones.

Innovation Management Standards

Innovation is widely recognised as a critical factor for organisation survival (van der Panne
et al., 2003). Innovative companies are confirmed to be better in terms of both financial
performance and the resilience level (Carvalho et al., 2016). However, a minimal number
of companies are successful in innovating themselves. Stevens & Burley (1997) analysed
patent activity and proposed a success curve. It illustrates the survival rate during new
product development (NPD) starting from 3,000 raw ideas to only four significant
development and only one commercially successful. Even though many empirical research
articles subsequently confirmed the actual failure rates are within the range of 35 to 50 per
cent (Asplund and Sandin, 1999; Castellion and Markham, 2013; Cozijnsen et al., 2000),
the number is still considered very risky for business. As a consequence, the business needs
a systematic approach to manage innovation development (Timmerman, 2009).
Cerezo-Narváez et al. (2019) compile a list of innovation-management-related standards.
The list illustrated that non-European countries, including the United State, Japan, Korea
and China do not have their standards for innovation management yet while European
countries are very active in this topic. For examples, The BS7000-1, a British standard
guide for managing innovation, was published since 1989. Next, other European countries,
including Spain, Portugal and Ireland, published their standards during 2010, before the
European standard, CEN/TS 16555, in 2013. Recently, the International Organisation for
Standardisations published its ISO 56002, the ISO standard guide for innovation
management system in 2019.
ISO56002 (ISO, 2019) provides a standard guideline for managing innovation within an
organisation. Figure 1 illustrates the core components suggested by the standard. First, the
context of the organisation should be analysed by considering both internal and external
issues. For example, the organisation has to review its vision, strategic direction and core
competencies as well as to scan external environments that possibly affect the organisation
direction. Next, the innovation management system (IMS) requires a high level of
leadership and commitment from organisation leaders. In other words, the leaders need to
establish both innovation vision, strategy and policy, which are translated into innovation
objectives for each organisational unit.
Moreover, the leaders need to establish the IMS to drive organisational units archiving their
innovation objectives. The IMS mainly comprises of the innovation portfolio, the
This paper was presented at ISPIM Connects Bangkok – Partnering for an Innovative
Community, Bangkok, Thailand on 1-4 March 2020.

innovation process, to transform innovation initiatives to value realisation, and other

supporting activities. Last but not least, ISO56002 considered IMS as an evolving system.
The performance of IMS itself has to be evaluated for planning further continuous
improvement.

Figure 1 An illustration of ISO56002 innovation management system guideline

3 Methodology

Firstly, according to ISO-56002 in Figure 1, four groups of activities have been extracted:
(1) Analyse Context of Organisation, (2) Establish Innovation vision, strategy and policy,
(3) Establish an IMS and (4) Continuously Improve the IMS. Secondly, topics under each
step and the relevant search keywords are listed, as shown in Table 2. Next, I used these
search keywords to find relevant DX literature from Google scholar with a preference on
those papers with high citation count. Finally, I have reviewed these literature one at a time
to check their alignment with ISO-56002 innovation management standards. As a result,

4
by linking these two concepts together, organisations should be able to visualise the whole
journey of DX more systematically.
Table 2 The search keywords derived from ISO-56002

Steps Topics Keywords = “digital transformation”

AND
Literature Review Literature Review “Literature review”
1. Analyse Context External environment “external”
of Organisation
Internal factors “digital capability” OR
“digital leadership” OR
“digital culture”
2. Establish Innovation Vision “vision”
Innovation vision,
Innovation Strategy “strategy”
strategy and policy
Innovation Policy “policy”
Innovation Objectives “KPI”
3. Establish an Innovation Portfolio “portfolio”
Innovation
Innovation Process “process”
Management
System Supporting Resources “resources” OR “enabler”
4. Continuously Improvement “metrics” OR “maturity”
Improve the IMS

4 Results

Step 1:Analyse Context of Organisation

Similar to Mintzberg’s (2003) strategic management framework, the ISO-56002 standard
suggests to start the process by analysing the context of the organisation. This step
comprises both external environment, e.g. PESTLE analysis and strategic foresight, and
internal factors, e.g. interested parties, their needs and expectations, vision, strategic
direction, core competencies innovation performance in the past projects and innovation
competencies of its people. For examples, OECD (2020) published a strategic foresight
report to suggest policymakers to be aware of future challenges. Also, the stakeholder
register is a common tool for tracking whether all interested parties have been approached
and for planning how to engage each stakeholder individually (PMI, 2017). The objective
of this step is to prepare an organisational culture that supports innovation activities. For
example, the desired culture is characterised by openness, curiosity, user focus,
collaborative, encouraging experimentation and learning from mistakes. To enhance this
step for DX, two groups of activity are expatiated: scanning external environments and
assessing internal capabilities.
This paper was presented at ISPIM Connects Bangkok – Partnering for an Innovative
Community, Bangkok, Thailand on 1-4 March 2020.

External environment
Zhu et al. (2006) classified external players in the competitive landscape into two groups:
horizontal competitors and vertical trading partners. In other words, if more competitors
use new digital technologies, more competitive pressure will drive the firms to adopt new
technologies. On the other hands, the digitalised operations presumably require more or
less support from partners either up and down the value chain, their digital readiness will
unavoidably affect the firm’s digital readiness. Moreover, the world economic forum
(2020) also published several reports to summarise data transformation insights within
specific industries.
Last but not least, due to the use of digital technologies is pivotal for DX, technology
foresight is inevitable. For examples, Sebastian (2017) mentioned the vital digital
technologies by using the acronym SMACIT, pronounced “smack it”, standing for social,
mobile, analytics, cloud and Internet of things. Schallmo et al. (2017) illustrated a digital
radar containing digital enablers and their applications in four transformational areas.
UNIDO (2003) suggested using expert and stakeholder panel for technology foresight
while Turovets et al. (2019) combined the classical expert validation with advanced text-
mining to identify the most promising technologies.

Digital capability
Nadeem et al. (2018) conducted a systematic literature review to compile ten organisational
capabilities needed for DX. Briefly, organisations have to shift from silo-based operations
to collaborate with cross functions or even external partners. Especially, dynamic
capabilities, reflecting the ability to learn and the ability to change, were considered the
most critical (Warner and Wäger, 2019). Mihardjo and Rukmana (2018) confirmed this
idea and conceptualised it as cultural intelligence (CQ). Therefore, the teams should have
a diverse skill set (Li et al., 2018), and prepared for a high degree of turbulence. To
effectively create digitally-enabled customer experiences, organisations are obligated to
deeper analyse their value propositions, with the help of data analytics capabilities, so IT
capability is also crucial (Nwankpa and Roumani, 2016). As a result, operational processes
have to be agile, flexible and continuously developed.

Digital Leadership
Leadership is crucial in times of changes. As a result of reviewing the literature, Mihardjo
and Rukmana (2018) defined digital leadership as “a combination of transformational
leadership and the use of digital technology to create value to the firms”. Schuchmann and
Seufert (2015) highlighted the digital leader role to act as convincing visionaries and to
create the driving forces for transformation. Moreover, due to high degree of uncertainty,
the VUCA environment (Lawrence, 2013), becomes a new norm, leaders must
acknowledge failure as an opportunity to learn and a prerequisite for success (Kane et al.,
2015). Mihardjo and Rukmana (2018) complemented the concept by adding a role to foster
a digital culture that embraces technology as well as harness value from investment by
promoting data-driven decision-making. Besides, Rüth and Netzer (2019) have compiled
a list of digital leadership competencies including (1) successfully communicate with
people from various cultures, (2) create ideas being attractive to stakeholders, (3) choose

6
the right managers to drive changes and (4) persuade employees to better deal with
heterogeneity and uncertainty.

Digital culture
Kane et al. (2015) mentioned that technology does not drive transformation, leadership and
culture do. On the other hand, selecting the right people is necessary for cultural changes
(Schuchmann and Seufert, 2015). Henrich (2001) acknowledged their ideas; by relying on
Rogers’s (1995) diffusion of innovations theory, he explained that not only choosing the
right early adopters is critical, but creating a biased cultural transmission also significantly
contribute to cultural changes.
Besides, similar to the agile manifesto (2001), Hemerling et al. (2018) defined five core
elements of a digital culture consisting of (1) Look outside, not inside, (2) prize delegation
over control, (3) encourage boldness over caution, (4) emphasizes more action and less
planning and (5) values collaboration over individual effort.

Step 2:Establish Innovation vision, strategy and policy

According to ISO-56002, leadership and commitments are critical for implementing an
innovation management system, and innovation policy is a tool for top management to
articulate and communicate those commitments (ISO, 2019). In other words, after
analysing both in-house setting, stakeholder requirements, experiences from previous
innovation initiatives and external environment in the previous step, organisations should
be able to address opportunities and to draw their innovation vision representing a future
desired state. Kane et al. (2015) confirm this idea by suggesting to start formulating DX
strategy by working backwards from the future vision rather than current capabilities.
Next, top management has to establish an innovation policy and strategy to show their
commitment to satisfying applicable requirements. The digital strategy provides strategic
direction to realised innovation vision. For examples, The BCG (2020) suggest four pillars
of DX comprising digitising customer relationship, building digital talent and organisation,
harnessing data and advanced technology, and Digitizing Operations and Automating
Processes. Similarly, Nadeem et al. (2018) have also summarised six digital business
strategies by including exploring new potential technologies, building dynamic capabilities
in response to environmental turbulence, focusing on business integration and leveraging
the digital ecosystem to collaborate with external partners.
Last but not least, these innovation vision, strategy and policy will later be translated into
specific innovation objectives at relevant organisational units. The KPI-driven approach is
a common management practice for monitoring innovation progress (Sawang, 2011). For
instance, Kotarba (2017) has collected critical metrics for monitoring DX activities in both
macro and micros levels. However, due to innovation management is encouraging the
organisation to learn from mistakes, the KPIs should be used as a tool for tracking progress
rather than punishing failures.
This paper was presented at ISPIM Connects Bangkok – Partnering for an Innovative
Community, Bangkok, Thailand on 1-4 March 2020.

Step 3:Establish an Innovation Management System

Innovation Portfolio
The ISO-56002 (ISO, 2019) suggests to establishing innovation portfolio for balancing risk
and return, ensuring consistency between initiatives, confirming alignment with the
innovation strategy, optimising resource utilisation and communicating the overall
progress and achievement to management and interested parties.
Likewise, Bonnet (2016) suggest managing DX activities as a strategic portfolio over time
in order to balance the need for short-term improvement and longer-term strategic changes.
Also, the portfolio improves the risk profile of the system by mixing initiatives from four
groups with different risk levels, namely, digital reengineering, value-chain
transformation, digital value proposition and business model reinvention.

Innovation Process
The ISO-56002 (ISO, 2019) has illustrated the innovation process as a bottom-up non-
linear process. For examples, everyone in the organisation is encouraged to proposee
innovation initiatives. Organisation units should determine a plan to achieve their
innovation objectives by asking the following key questions: What will be done? Who will
be involved? What will be required? Who will be responsible? When will it be completed?
How will the result be evaluated? The management, on the other hand, has a role in
establishing decision-making structure and in providing resources and supporting service,
such as coaching. Next, innovation initiatives are developed through several states, namely,
identify opportunities, create concepts, validate concepts, develop solutions and deploy
solutions. Moving among these states is flexible in a non-linear fashion. Similar to the
concept of the minimum viable product (MVP) from the lean startup approach (Ries, 2011),
the ISO-56002 standard suggests starting concept validation with the most critical
uncertain assumptions by conducting experiments to reduce uncertainty. Also, making
mistakes is considered acceptable, but the lesson learned should prevent the organisation
from having the same mistake repeatedly.
Comparing with the DX process, on the other hand, ideas from scholars regarding the
transformation process are far from the consensus. For examples, Bonnet (2016) introduced
four implementation options based on the buy-make decision and the implementation
speed. Hess et al. (2016) proposed another set of options based on eleven strategic
questions. Schallmo et al. (2017) presented a roadmap for DX by including the steps of
‘digital potential’ and ‘digital fit’ for generating solution options and evaluating the options
respectively. Fuchs and Hess (2018) employed agile concepts for the large-scale
transformation by phasing the transformation activities into episodic multiple agile phases.
Issa et al. (2018) classified four levels of implementation according to organisational scope
ranging from ad-hoc project to inter-organisational level. Bondar et al. (2017) leverage the
Zachman framework (Zachman, 2008) to align DX activities with enterprise architecture.

8
Supporting Resources
The ISO-56002 (ISO, 2019) mentions several transformation enablers as supporting
factors. For examples, similar to typical projects, time, money and people are critical for
project execution. In other words, organisations have to set up approaches to ensure these
resource fulfilment according to the requirements of the projects. Besides, due to
innovation projects usually deal with changes affecting both intra-organisations and
external partners, stakeholder management and communication management, including
both verbal and documented information, are also pivotal for innovation projects.
Moreover, since a long-term goal of the innovation management system is to build
organisation innovation capabilities, strategic intelligence management, knowledge
management and organisational competency management are still unavoidable.
By considering organisation structure, to establish a dedicated organisational structure for
driving IMS is possible, especially in the case that they expect radical changes to their
current offering, or they require different organisational setting for driving projects. Also,
the standard suggests allocating dedicate financial resources (e.g. fixed percentage of
annual revenue) and establish funding principle to balance investment across different time
horizons, different degrees of risk and different types of projects. Last but not least, unlike
typical projects, organisations have to concern intellectual property management as a tool
for either business protection or business exploitation.
The above guideline conforms with DX literature. For instance, Küng (2008) mentioned
people as one of the most challenging factors for DX. Her suggestions for the management
is to incrementally insert digital technologies into the organisational DNA. Active culture
management, again, is a critical success factor. For instance, people in the organisation
should have ‘pro-digital culture’ to consider the digital arena as an opportunity rather than
treat. To build milestone oriented agile teams with cross-functional members and a degree
of autonomy is proven to increase agility and innovation.

Step 4:Continuously Improve the Innovation Management System

The ISO-56002 (ISO, 2019) considers the IMS as an evolving system by following the
Deming’s (2000) PDCA cycle. Both the effectiveness and efficiency of the IMS should be
reviewed, such as the consistency among innovation objectives and innovation initiatives,
the number of accomplished innovation initiatives and the utilisation or adequacy of the
supporting resources. Practically, the organisation should identify relevant innovation
performance indicators as well as the methods to monitor, measure, analyse and evaluate
these metrics. The standard classifies indicators into three groups: input-related,
throughput-related and output-related. Similarly, Kotarba (2017) collects innovation
metrics in both macro and micro levels.
Furthermore, To set up a formal structure to evaluate IMS performance, internal audit and
regular management review are recommended. The Valdez-de-Leon’s (2016) seven-
dimensions instrument to measure the digital maturity of an organisation can contribute to
these evaluation activities because it can inform management if some dimensions are
ignored or underperform. Moreover, to visualise improvement roadmap in the long run,
Solis (2016) proposed a roadmap for improvement by defining six levels of
transformational magnitude ranging from doing nothing to innovating or die. Berghaus and
This paper was presented at ISPIM Connects Bangkok – Partnering for an Innovative
Community, Bangkok, Thailand on 1-4 March 2020.

Back (2016) presented five levels of digital to guide organisational move starting from
organisation-wide transformation campaign to data-driven enterprise.

5 Discussion

Healthy alignment
Most, if not all, of typical strategy management, recommends starting the strategic projects
by scanning both internal context and external environment, then to draw a vision
representing the desired future state. These step above are well-addressed by both ISO-
56002 and DX literature. Moreover, I am aware of several healthy alignments between
ISO-56002 guide and DX literature, and the same activities should benefit both innovation
and DX projects. For example, the heart of digital culture, by promoting engagement with
customers and learning from mistakes, perfectly aligns to the desired culture for the
innovation management system. The agile and creative characteristics of digital leaders are
also preferable or innovation projects. In both cases, the portfolio is considered to balance
risks and benefits as well as investment in many strategic projects. Last but not least, time,
money and people are mentioned as critical enablers in both groups of literature.

Independent divergence
The DX process is the area where have many various ideas. By considering just within DX
literature, there was no agreement regarding how the DX process should be looked like.
This might imply that not enough successful transformation cases were studies, so the
common patterns cannot be extracted.
Moreover, regarding the definition of both DX and innovation management standard, there
is one notable misalignment between them. In other words, the innovation management
standard suggests creating an IMS system to facilitate innovation development within the
organisation. This system is designed to work iteratively, project-by-project; thus, in
theory, it never stops working and also continuously evolving. On the other hand, DX is
defined as an endeavour to transform an organisation from a current state into the future
digital version, so its definition implies that the transformation process should be finished
when the digitally transformed organisation has been archived.

Helpful complement
DX requires digital leadership to insert digital technologies into organisation DNA. For
examples, people within an organisation should be aware of the potential of digital
technologies. They should also be skilful in IT capability. The organisation should rely on
data-driven decision making. Digital collaboration platform contributes to sharing
knowledge and building organisational capabilities. While these concepts are never
mentioned explicitly in ISO-56002, it contributes to creating a suitable culture for
innovation development. Moreover, the idea of the digital maturity model is exciting,
whether it can be extended for measuring the maturity of the IMS.

10
Hidden gaps for further research
To align DX literature with the framework suggested by ISO-56002 reveals many research
gaps. For instance, as mentioned earlier, the digital transformation process is a mysterious
area where practitioners have to fumble their way themselves. Moreover, even if the idea
of using the ISO-56002 framework for both innovation projects and DX project sounds
convincing, it is not very clear how the implementation result would look like? Will people
in the organisation confuse from having two kinds of project executing together within a
common framework, not even yet considering the different nature of both project types as
mentioned earlier. Last but not least, to distribute DX literature into boxes of ISO-56002
reveal many topics which require more research work. For example, no systematic
literature review was conducted for digital capability, digital leadership and digital culture.
This paper itself can also be improved by using a systematic literature review approach.

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