Thursday, October 31, 2013

Innovative IT

The Paradox of IT is to be both an Innovation engine and governance champion.

From industry surveys, the majority of IT organizations are still being perceived as maintenance center, most employees outside of IT don’t call their IT teams very innovative, yet most believe technology is growing in importance, so IT leaders are facing unprecedented pressures to transform their IT into value center and innovation engines, but how to run an innovate IT, what’re the roadblocks one need to overcome, and which capabilities IT needs to cultivate?

IT is business: Innovative IT can only happen if IT is regarded as a partner and given the role in catalyzing innovation and driving the business. The "us vs. them" mentality is still alive. Most CIOs, even if they are a part of the Board, still claim that they have no influence on strategy. It is then like saying - "be innovative but don't tell us what to do.” Further, it is true that IT spends much more time in general on maintaining existing systems than innovating. It is hard to put down the fire hose. It's been the case for a while that IT departments are wrapped up in the heroics of bringing systems back online efficiently when really the resources should have been further up the value chain putting processes, systems, and management structures in place to stop them from going down (80% of downtime is caused by changes after all - and that is a management issue, not a un-manageable technology issue).

Leadership innovationThe spirit of the organization is from Top. ~Peter Drucker: One of the most appropriate titles of CIO is "Chief Innovation Officer." CIOs generally have a greater opportunity to stand out and take a lead in driving innovation across their companies. Though every executive should make their voice heard on this front, have an opportunity and responsibility to participate in the innovation dialog and to come up with innovative ideas, most of the functions can make process innovation within their division. IT, on the other hand, has much more of an opportunity to enable incremental top-line and bottom-line value across the business, not just within IT, but cross-organizational scope; from innovation management perspective, the innovative leadership team should well mix the innovator personas: movers and shakers, thought leaders, critical thinkers, experimenters, reframers, set the right tone to inspire the new thinking and encourage the new way to do things and lead enterprise-wide innovation management.

Process innovationThe missing part is business innovations. IT has always been very innovative regarding technology. IT has a natural innovative spirit - most IT specialist is eager to use new technologies and gadgets. But there is a significant difference between technical proficiency and business innovation. Natural IT innovation spirit can be used to the benefit of business only when IT participates in defining strategy and business goals and make IT as a business driver and strategic asset. So IT can devote more attention to what organizations really care about - putting technology to business advantage. It is the gap between the aspirations of what IT could do to the business versus what the current IT infrastructure within the respective IT department is capable of providing/ enabling. That gap may be a bigger factor contributing to tension and perception. Without a good understanding of that reality from everyone at the board level, the CIO is in a tough spot. Often time, it may not be because the CIO isn't business savvy and it may not be because other C-Suite ranks don't understand and value technology, it is because such gap needs time and resources to fill out first.

Culture Innovation: Innovation is not just about technology, Innovation is not always equal to the latest gadget, it’s about people, culture, partnership, manners, etc. Isn't that what innovation is all about: do it better, differentiate yourself from your completion, run, grow and transform the business. So educate the IT team on the business and encourage them to engage with business counterparts in a value-oriented manner. Building an environment where the only thing you get fired for is not asking hard questions. Often the most disruptive person is the one you want to harness, channel the energy, enthusiasm, and ideas. many legacy businesses come with a legacy mindset, the old way to do the things, lack three elements to spark innovation: vision, passion, and progression. Employees don’t have a sense of urgency to adapt to the changes or think differently (nonlinear or different angle). But an innovative culture encourages their people to see the old problems from every direction and find different solutions. IT needs to re-brand itself as a business innovation or transformation center. To break the mold, IT needs to rethink itself as an innovative and business leading organization composed not only of technical ‘gurus’ (who happen to live in a far off-white tower) but rather of business ‘gurus’ who also happen to be technically proficient. This requires different CIO management styles, organizational setups, and management focus. IT task is to provide innovation platforms to the business. And business divisions get empowered with effective tools that allow them to shape and create the processes they need to execute new strategies and operations. IT role is to become the supply chain that gives them value-added engagement or platforms of innovation.

Governance is key: IT needs to transform itself as an innovator yet retain its edge in tighter control over the standard processes. A challenge with the "consumerization of IT" is that the slickness or ease of the technology often clouds the risks involved, so IT governance is to ensure accountability and governance mechanism well embedded in business processes to encourage desirable behavior. Although switching back and forth between control and innovation is a difficult thing to do within the same group of people and the same portfolio. Smart IT shops know innovation and regular operations are very different and will create some separation - different unit for innovation within IT, different portfolio, allowances within innovation projects for frequently shifting dates, budget, etc.

Running IT as an innovation engine needs to close three gaps: the leadership gap, the collaboration gap, and the implementation gap. Develop a deep understanding of the business value chain, competitive landscape, business processes and capabilities, revenue models, P&L drivers, and balance sheet strengths and constraints. In many organizations, IT is the custodian of solutions and data assets that can be applied in new and different ways to generate massive business value that far exceeds what other functions can incrementally bring to the table. Innovative IT is high-performing, high-capable, and high-mature to leapfrog their business’s digital transformation. Innovative IT is an integral part of the innovative organization, and the paradox of IT is to be both innovation enabler and risk intelligence manager, to gain competitive advantage or differentiated capabilities for business’s growth.

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The most impressive line is the "Innovation spirit can be used to the benefit of business only when IT participates in defining strategy and business goals and make IT as business driver and strategic asset."

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