Business process improvement and innovation (PII) are crucial for adapting to dynamic market conditions and maintaining competitive advantage. Until now, PII has required many resources due to primarily relying on manual methods. With the increasing use of process data in process mining and artificial intelligence gaining momentum in emulating and augmenting human creativity, there is an opportunity to explore information systems that facilitate PII. However, a holistic understanding of the PII field has yet to be developed. To address this gap, this paper presents a taxonomy for how PII systems create improved process designs, an assessment of the state of the art of existing research based on a comprehensive literature review, and an analysis of PII system archetypes. The taxonomy serves as a theoretical lens for analyzing PII systems, helping researchers and practitioners to determine relevant design options and to identify promising research opportunities building upon previous work.