Is IT the Most Important Department for Driving Innovation?

In recent years we’ve seen an enormous shift in how traditional IT leadership roles operate. IT departments no longer just “keep the lights on”, they are now expected to support business initiatives and help drive revenue growth.IT innovation is required in the form of disruptive strategies that leverage technology to deliver sustainable competitive advantage or substantial cost savings. Chief Information Officers (CIOs) are now integral to any ambitious business plans.

Are CIOs Focussed on Innovation?

In a recent survey of 100+ UK Chief Information Officers (operating in companies of 500+ employees) CIO UK and IDG UK found that innovation is clearly a top priority for CIOs:

  • CIO’s key focus in 2016 was driving business innovation and leading change efforts
  • In 2017 driving business innovation is not only seen by CIOs as the area that will see the biggest increase in focus, it will be the primary focus over the next two years
  • CIOs expect to be able to spend more of their budgets on supporting revenue growth and business initiatives rather than maintaining technology functions

Ian Cox, CIO UK author has this advice:

“A switch in focus to innovation may be a challenge for many CIOs who have traditionally been focused on cost control and managing the day-to-day running of IT…if the CIO and the IT function are to lead innovation and change initiatives, they too need to think about how technology can be used… to create competitive advantage, enhance the customer experience and generate new revenue streams”.

 

What is IT innovation?

Before we jump right in, it’s worth just clarifying — in an IT context — what ‘innovation’ actually looks like. It’s a buzzword that many business leaders will throw around, but what does it really mean?

The general accepted definition of IT innovation is:

“Game-changing, technology-enabled, customer focused strategies, which create sustainable competitive advantage or lead to significant cost reductions.”

IT innovation is not just about rolling out the most cutting-edge technology. It’s about how businesses are focusing IT to achieve breakthroughs in business performance or improvements to their customer proposition.

According to Immervox’s recent  Management Productivity survey, which looked at the priority and productivity of daily tasks for UK managers covering all departments, we found that:

  • One in five managers stated that they feel that innovation is the most important use of their time to drive business success
  • Only 5% of respondents could spend their time where needed though; innovating

These findings show that IT leaders are far more focused on innovation than their counterparts in other departments.

Instead of focussing on innovating for the business, 26% of managers stated that admin took up the most time in their day to day work. Only 4% believed it to be the most effective use of their time for business success however.

These findings show that IT leaders are far more focused on innovation than their counterparts in other departments.

 

Key IT Innovation Trends for 2017

  • Adaptability is vital
    Modern businesses can increase success when they quickly adapt to industry and marketplace shifts, incorporating new tech into culture and business as usual operations. Just look at the uptake of Cloud computing in recent years.
  • Rapid innovation
    In an evolving marketplace, businesses cannot afford to waste time and resources on innovative tools that offer no real value. So a “fail fast, succeed faster” mindset must be adopted. This recognises that some initiatives will succeed straight away whist others have steep learning curves. The key takeout here is; the faster an idea can be implemented, the bigger the opportunity to transform and disrupt through innovation.
  • Embrace remote working
    2016 Deloitte research shows that Millennials prefer flexibility to compensation. Businesses are quickly waking up to the need to offer remote working to attract and retain the best talent. Remote working is an IT enabled technology supporting innovative working practices.
  • IOT is driving digital transformation
    Cisco is estimating 50 to 200 billion IoT connected devices by 2020. Intel is putting their prediction at over 200 billion. It’s clear that “the second digital revolution” is going to transform far more than just business. IT is spearheading IoT innovation to deliver business goals.

‘Must-haves’ for delivering IT innovation

In order to be the most important department for driving business innovation, some “must-haves” need to be obtained, including:

  • A strong IT foundation
    The basics must be right before you can start to innovate.
  • A team that instils confidence and trust
    From strong communication skills to an attention to detail, the wider business must be inspired with confidence at every interaction with IT, from helpdesk to CIO.
  • Align IT initiatives with business goals
    IT strategy and more importantly, IT innovation must be aligned with what the business wants to accomplish.
  • JATBL (jargon alienates — talk the business’ language!)
    Learn to talk to the business about innovation in terms of the business problems it is solving rather than tech features. Acronyms should be avoided!
  • Really understand the problem or goal
    Before proposing any tech solution, exercise due diligence to ensure that the business and IT really understand what the problem or goal is. If you don’t get to the root cause, how can you effectively solve?
  • Invest in measurement
    You can't manage what you can't measure. The rather over-used quote rings true here — you can't know whether or not you are successful, unless success is defined and tracked. Remember who your audience is and measure the right metrics.

IT Must Focus Innovation Goals on “Metrics That Matter”

Business leaders will switch off and fail to see the big picture if goals are focused on the wrong metrics. Board members will be less responsive to IT innovation plans and may completely fail to see their effectiveness if traditional IT metrics such as Deployment success rate are used.

Focusing innovation goals on metrics that the board knows, trusts and understands will result in increased support for IT innovation plans.

Metrics should be split roughly between “business performance” and “customer value”, and should include:

Business performance

  • Increased earnings
  • Market share
  • New business service enablement

Customer value

  • Net promoter score
  • User satisfaction
  • Response time

It is a given that any IT innovation initiative should affect one or more of these key metrics, the challenge for CIO’s is attributing innovation initiatives back to these metrics. This will require CIO’s to closely collaborate and agree reporting criteria and responsibilities with fellow department leaders.

 

Barriers to IT innovation

We looked briefly at the key “must haves” for delivering innovation, but these (unfortunately) aren’t the only hurdles to overcome:

  • Complexity
    System and architecture complexity can result in a time-consuming nightmare for IT to unpick, especially when it comes to established legacy systems.
  • Data inconsistencies
    IT can find time and resource is sucked into resolving any unreliable information.
  • Operational issues
    IT can find innovating crushed by operational complexities or dated operational structures and practises. Let’s not forget stakeholders for legacy systems as a potential major hurdle.

In the UK, an overwhelming 51% of managers in medium to large companies stated that they felt ineffectual IT systems were the biggest hindrance to their day to day work, according to the Immervox Management Productivity survey.

This highlights the need for investment in the department and for UK CIO’s to lead IT innovation and improvement initiatives.

In the UK, an overwhelming 51% of managers in medium to large companies stated that they felt ineffectual IT systems were the biggest hindrance to their day to day work.


DevOps approach

Increasingly we are starting to see DevOps as an approach to driving IT innovation. This is backed up by findings from a recent RightScale survey of more than 1,000 IT professionals:

  • 74% said their enterprises had adopted DevOps
  • 80% said they are now using DevOps principles for application delivery

Using a DevOps approach means businesses can test new capabilities, iterate quickly, and measure real business results. Quickly honing in on “results effective” innovation, rapidly changing when things don’t quite go as planned and with the right technology in place to deliver insight, Development and IT are connecting to better deliver business goals.

 

Conclusion

It’s clear from recent trends that IT is key for driving business innovation, but it is also clear it won’t happen by accident. CIO’s have got an appetite to demonstrate innovation but cultivating an environment where it can flourish requires that the basics are in place whilst legacy and operational hurdles are overcome.

CIOs must change the language and metrics they use to talk to the wider business, inspiring confidence and trust. By modernising critical infrastructure and exploring new technologies, whilst adopting implementation techniques such as DevOps, IT is becoming the most important department for driving innovation in 2017.

Those that succeed in focusing innovative IT initiatives on business goals will reap the rewards that come from competitive advantages and industry standard setting.

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