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Paving The Road To Innovation, With IT
For too long, IT has been consumed by day-to-day operations. It’s been seen as a mere builder of services, so in most organizations, the business-value of IT still goes unrecognized.
Based on Gartner’s research, IT’s focus appears to be exactly the opposite of the “business of the business.” Of all recent IT budgets:
• 67% were spent on commodity IT running current infrastructure,
• 20% on business value IT to help growth,
• but only 13% on new opportunities.
Tomorrow’s IT: Evolve Or Die!
Earlier this month, I talked about CIOs rising out of their historical role, to focus on a strategic seat at the CEO’s table. IT is undeniably in a period of transition, but there’s still a long way to go.
As Matt Watts says, IT must evolve:
The focus for CIOs today should be to aggressively pursue a strategy to minimize the cost of commodity IT—either through better and more efficient technology, or by using lower cost cloud providers. Then they should shift their people and resources to focus on things that help increase value to the business, taking advantage of new innovations.
But Does IT Have The C-Suite’s Support?
Do other CxOs recognize and embrace the business value of technology?
A survey by Forbes Insights measured IT priorities across the C-suite. The results show that other CxOs recognize the need for CIOs to take a leadership role and chart the business’s future.
In particular, CFOs are great proponents. They understand that technology can now provide unprecedented visibility into business metrics—enhancing financial reporting and insights.
CFOs are fast becoming evangelists, spurring technology-driven innovation and making the biggest push for investment in new solutions and approaches. Paul Reilly, EVP of finance and operations and CFO of Arrow Electronics, is one such:
Compliance really encompasses so much of what we do in each of our businesses, but we can only be effective if we have greater and more-effective IT tools. ... So much is centered around centralization and standardization of functions. But most important is the automation of processes. ... If you don’t automate, you’re not going to get the right level of efficiency. Automation comes from IT tools and capabilities.
The majority of executives believe their enterprises are in the middle of the IT adoption curve. Technology hasn’t played a starring role in the past, but they do have hope for the future: Almost two-thirds see IT as a key part of their organizations’ long-term plans.
David Kieselstein, CEO of Penton, shares his experience:
It doesn’t have to be technology that drives that innovation, but increasingly it is. The power of mobile, of apps, of SaaS platforms, of the web, of data capture and analysis, is driving almost all of the new product development that we’re doing within the company now, which is very far from where this company was even a few years ago. We actually launched eight new products just in the last three to four months of last year, leveraging technologies. We also augment the chief data officer’s management suite with a world-class engineering team.
What’s The Best Technology Investment For Business Growth?
Only 21% of executives see their organizations as being on the “leading edge” of technology. They aspire for better, and the question of the moment is: Where should our IT budget be focused?
Here’s what CxOs believe:
1. More than a third of executives vote for Customer Relationship Management. They value the ability to better engage with customers, and understand their requirements across a life cycle. They also believe CRM brings greater opportunities to reach new markets.
2. Data Security and Protection comes a close second, since it delivers potential savings far beyond the initial investments. The costs of data breaches—including auditing and tracing breaches, potential fines from government agencies, costs incurred for notifying affected parties—are better avoided. They would also like to prevent the potential loss of future business due to lack of customer confidence.
3. Big-Data Analytics is also seen as a savvy investment for business growth. Executives see it as a corporate capability that will help them glean insights from a range of information coming into their organizations—including machine-generated data from sensors and applications, user-generated data from social media, on-site collaborative environments and productivity applications—in addition to “traditional” structured transactional data.
So What Should IT’s Next Step Be?
Lee Congdon (CIO, Red Hat) and Cynthia Stoddard (CIO, NetApp) propose a partnership with the business.
In the transition from an industrial age to an information age, every enterprise is becoming an information enterprise. IT has a huge role to play in this promising future, by partnering with the business to give them the tools they need in order to be productive.
IT becomes an enabler. Instead of rules that forbid, IT can work with its users to become an enabler—to allow productivity.
For more insight into the C-suite’s position on technology and innovation, read The Road to Innovation is Paved with IT [PDF]
What's your take? Weigh in with a comment below, and connect with Anjali Acharya (Google+) | @AcharyaAnjali (Twitter).
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