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The Innovation Imperative: Why IT Needs to Lead Now
September, 2012
“Innovation is creativity with a
job to do” – John Emmerling
2 Copyright © 2012 CA. All rights reserved.
You miss 100% of the shots you never take”
– Wayne Gretzkey
Some thoughts on innovation
“There’s a way to do it better – find it”
– Thomas Edison
Never innovate to compete, innovate to change the rules of the game”
– David O. Adeife
The age of technology innovation
88% newcommercial
enterprise apps will move to
the cloud1
CLOUDCOMPUTING
30 billion pieces of
content shared on Facebook every month2
SOCIALNETWORK
2-7 Zetabytes90% unstructured3
BIG DATAANALYTICS
Mobile web bigger than
desktop internet by 20154
MOBILEDEVICE
15 billion networked
devices by 20155
INTERNET OF THINGS
1 IDC, ‘IDC Predictions 2012: Competing for 2020,” IDC #231720, December 2011.2 Ijustdid.org, ‘30 Billion Pieces of Content Shared on Facebook Monthly,’ Jonha Ravesencio, November 30, 2011. Data sources cited: Google, BBC.3 CenturyLink projections cited in ReadWriteWeb article, “Infographic: Data Deluge -- 8 Zettabytes of Data by 2015,” November 17, 2011.4 Morgan Stanley data from ‘The Mobile Internet Report December 15, 2009. Cited in Mashable article, ‘New Study Shows the Mobile Web will Rule by 2015,’ April 13, 2010. 5 PCWorld, ‘Cisco Predicts 15 Billion Networked Devices in 2015,’ citing data from Cisco Visual Networking Index Forecast. , June 1, 2011.
4
Cloud Computing … IT no longer “the only game in town”
Copyright © 2012 CA. All rights reserved.
Business
Consumer
CLOUDCOMPUTING
5
Consumer Driven IT . . . a tipping point
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Self-Service
Anywhere
24/7
IT ConsumerIT User
IT Users have matured to become IT CONSUMERS
FlexibilityScalability
Dependent
The Office
M-F, 9-5
Devices
WORK STYLE
LOCATION
WORK HOURS
NEEDS
6 Copyright © 2012 CA. All rights reserved.
The opportunity for IT is to become the catalyst and innovation driver who will define and execute their organization’s business-centric strategies to: create innovation faster from scratch unleash innovation by transforming existing resources secure innovation across their entire environment
The Innovation Imperative
IT must innovate to deliver new services to support initiatives that drive revenue
Mobility Social Big Data SaaSClient
Experience
While optimizing delivery of mainstream IT
RationalizationAgile Cloud
DeliveryStandardized Infrastructure
Automation Reengineering
Bring Your Own Device
…AND do it faster than your competitors!
7 Copyright © 2012 CA. All rights reserved.
Are you ready to respond to the Innovation Imperative?
1. How well is your IT organization positioned to be able to respond to the Innovation Imperative?
2. Do your business executives agree with your assessment, and how can you improve alignment?
3. What barriers and obstacles are you facing?
4. Have you identified the benefits for your innovation projects as well as the risks of not innovating?
5. Are you investing for innovation while still supporting
ongoing maintenance?
8 Copyright © 2012 CA. All rights reserved.
In this survey we define innovation as a
“practice, process or technology that is demonstrably new and different and has a measurable positive impact on an
organization’s success”
CA Technologies recently sponsored an in-depth survey of 800 IT and business executives from large organizations in the U.S., Brazil, U.K., France, Germany, Australia, Japan and Singapore.
The research explored key topics in innovation, and the evolving role of IT as a key driver of innovation for their organization
The results may surprise you!
Insight from your peers
9
A few highlights
48% of your peers report that innovation is widely practiced at their organizations, while 20% indicate innovation is minimal or nonexistent
Surprisingly, innovative organizations emphasize analysis, process and structure as much as experimentation and exploration
Customers are often the driving force behind innovation and meeting their needs is a leading trigger for investment in innovation.
There are major gaps in perception between IT and business executives on what IT’s role is in innovation and how prepared they are to drive innovation.
Lack of budget and resources remain a key obstacle to innovation. While current investment in innovation is low, 69% expect spending on innovation to increase over the next year.
Roughly 80% report their organizations have achieved or expect to achieve higher customer satisfaction and increased speed to market as a result of innovation.
Copyright © 2012 CA. All rights reserved.9
10 Copyright © 2012 CA. All rights reserved.
Research Results
1. Current state and best practices around innovation
2. Top triggers, obstacles and benefits
3. Investing in innovation
4. IT Report Card
State of innovation: 48% report that innovation is widely practiced, while 20% say it is minimal or nonexistent
None: Innovation is nice-to-have and largely unsupported
Minimal: Pockets of innovation, culture does not support or reward
Moderate: Pockets of innovation and supporting culture
Frequent: widely practiced and encouraged
Established and Formulized
4%
16%
32%
35%
13%
Current State of Innovation
Copyright © 2012 CA. All rights reserved.11
48%
20%
1. Current state and
best practices
Q1: Which of the following best describes the current state of innovation in your organization? Base: Total 800
33% of organizations in the U.S. report that innovation is minimal or nonexistent
Innovative organizations emphasize planning and process even more than experimentation and hypothesizing
PERCENT PLACING SIGNIFICANT EMPHASIS ON EACH ACTIVITY
Innovation is Frequent/Established
Innovation is Minimal/Nonexistent
Meeting current customer needs 71% 48%Analyzing and planning 67% 37%Anticipating future customer needs 69% 36%Exploiting what you already know 62% 45%Stressing process and structure 56% 35%Allowing freedom and flexibility 54% 26%Hypothesizing and learning 52% 29%Rewarding experimentation 50% 24%Exploring the unknown 48% 29%Not straying too far from what you know well 33% 39%
1. Current state and
best practices
Q2: How would you rate the level of emphasis your company places on each of the following in its day-to-day activities? Base: Freq/Est 387. Minimal/None 156
The U.S. more likely to report emphasis is minimal or nonexistent on exploring is the unknown (47%) and experimentation (43%)
12
For technology projects, “iteration” is much more prevalent than “disruption”
Technology disruption
Route to market/channel innovation
Business process innovation (e.g., supply chain)
Business model innovation (e.g., pricing models)
Design innovation
Service innovation
Technology iteration/evolution
30%
34%
35%
38%
40%
43%
46%
Percent indicating innovation projects fall under each category frequently
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1. Current state and
best practices
Q3: Thinking of past, current or planned innovation projects within your organization, how frequently do these projects fall under each category? Base: WW 750 (Those who report at least minimal levels of innovation at their organizations)
74% of the most innovative orgs have formal processes to measure innovation
We have not completed any innovation projects
No processes in place
Informal ad-hoc measurement processes
Formal but manual measurement process
Formal technology-enabled measurement process
3%
16%
28%
35%
17%
1%
9%
16%
35%
39%
Innovation Freq Innovation Minimal
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1. Current state and
best practices
Q20: How does your organization measure its success with innovation projects? Base: Freq /Est 387, Minimal /None 156
55% of organizations in the U.S. report no or only ad-hoc processes to measure innovation
Measuring Success with Innovation Projects
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Research Results
1. Current state and best practices around innovation
2. Top triggers, obstacles and benefits
3. Investing in innovation
4. IT Report Card
Customers are the #1 instigator, customer needs one of the top 2 triggers of innovation
Biggest Instigator of Innovation Major triggers of Innovation
Copyright © 2012 CA. All rights reserved.16
Customers26%
Exec Mgmt25%
IT24%
LOB em-
ployees16%
Competitors10%
2. Triggers, obstacles
and benefits
Q4: Regardless of whether innovation is supported or encouraged currently, what have been or would be the most likely triggers to spur innovation within your organization? (Please select up to three.) Base: WW 800
Q5: Which group or function is the single biggest instigator of innovation for your organization? Base: WW 800
U.S. more likely to report “mandate from the executive team” as trigger(31% versus 18% in total)
LOB employees and exec management are biggest roadblocks, major obstacles are budget and time
Copyright © 2012 CA. All rights reserved.17
2. Triggers, obstacles
and benefits
Customers15%
Exec Mgmt26%
IT19%
LOB em-
ployees26%
Competitors14%
Biggest Roadblock to Innovation Obstacles to Innovation
Q7: What are the major obstacles to innovation at your organization? (Please select up to three.) Base: WW 800
Q6: Which group or function is the single biggest roadblock to innovation for your organization? Base: WW 800
Many more in the U.S. (versus total) report issues with lack of budget (47% vs 29%) and no time to think (43% vs 27%)
Q21: Which of the following benefits has your organization achieved or is it expecting as a result of innovation? Base: WW 800
Benefits achieved and expected as a result of innovation
Decrease in capital investments
Competitive advantage
Higher employee satisfaction
Identified growth opportunities
Increase in revenue/market share
Increase in profit
Ability to enter new markets
Increased speed to market
Higher customer satisfaction
22%
28%
29%
29%
30%
31%
31%
32%
33%
45%
53%
50%
52%
53%
54%
51%
47%
53%
26%
14%
16%
14%
12%
11%
14%
16%
10%
5%
5%
5%
5%
4%
5%
5%
4%
Benefit Achieved Benefit Expected Benefit Not Achieved or Expected Don't know
Copyright © 2012 CA. All rights reserved.18
2. Triggers, obstacles
and benefits
Q12: Which of the following potential outcomes are a likely result of a lack of investment in innovation? (Please select up to three.) Base: WW 800
Potential outcomes resulting from a lack of investment in innovation
Copyright © 2012 CA. All rights reserved.19
21%
22%
26%
29%
29%
31%
33%
37%
Damage to company/brand reputation
Increased need for capital investments
Loss of traditionally loyal customers
Profit loss
Loss or inability to attract skilled resources
Revenue loss
Increased competitive pressure
Inability to attract new customers /markets
2. Triggers, obstacles
and benefits
20 Copyright © 2012 CA. All rights reserved.
Research Results
1. Current state and best practices around innovation
2. Top triggers, obstacles and benefits
3. Investing in innovation
4. IT Report Card
IT budget allocation will be shifting modestly towards delivering new business services
63%
37%
Maintaining current systems ("keeping the lights on")Delivering new business services
58%
42%
IT Spending Today IT Spending 3 years from now
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3. Investing in
innovation
Q13a: What percent of your IT spending today is allocated to the following? Base: WW 800
Q13b: Three years from now, what percent of your IT spending do you expect will be allocated to the following: Base: WW 800
The U.S. is showing a greater shift, from 73/27 to 63/36 in three years but still lags
Low investment in innovation today, but likely to increase 10-30% in next year
Total United States EMEA APAC Latin America
20%14%
20% 21%
29%In-
crease
(NET)69%
De-crease (NET)13%
No change
13%
Don't know5%
Copyright © 2012 CA. All rights reserved.22
3. Investing in
innovation
Average Percent of Current IT Spend Characterized as “Innovation” Spend
Expected Change in Innovation Spend Over next 12 Months
Q14: What percentage of your organization’s current IT spend would you characterize as “innovation” spend? That is, spending on technology, services, equipment, and/or human resources that are intended to enable innovation within the organization. Base: WW 800Q15: Overall (including both IT and non-IT budgets), how do you expect the level of spending on innovation at your organization (e.g., the technology, people and processes that support it) to change over the next 12 months? Base: WW 800Q16: With the total equal to 100%, approximately what percent of spending on innovation at your organization over the past 12 months (e.g., the technology, people and processes that support it) fell under IT’s budget versus that of the business? Base: WW 800
Innovation spending is evenly divided between IT and Corp/LOB budgets
Mobile and Cloud will see the largest investments over next 12 months
23 Copyright © 2012 CA. All rights reserved.
Rich Media/Video Portfolio/Project management tools
“Internet of Things” Social media
Collaboration tools Automation
Virtualization Service management
Security management Business Intelligence/Analytics
Cloud computing Mobile technology
0% 5% 10% 15% 20% 25% 30% 35% 40%
12%
15%
16%
19%
22%
23%
25%
25%
26%
26%
35%
37%
3. Investing in
innovation
Q11: In which of the following technologies will your organization invest or increase investment over the next 12 months? (Please check all that apply.)Base: WW 800
24 Copyright © 2012 CA. All rights reserved.
Research Results
1. Current state and best practices around innovation
2. Top triggers, obstacles and benefits
3. Investing in innovation
4. IT Report Card
Q5: Which group or function is the single biggest instigator of innovation for your organization? Base: IT 399 Bus Execs 401
Who is the biggest instigator of innovation? 20 point gap
Competitors
LOB employees
Top management
Customers
IT
0% 10% 20% 30% 40%
10%
14%
20%
22%
34%
Competitors
IT
LOB employees
Customers
Top management
0% 10% 20% 30% 40%
9%
14%
17%
20%
30%
Copyright © 2012 CA. All rights reserved.25
4. IT Report Card
IT Respondents Business Executive Respondents
What is the perception of the CIO/top IT Exec role with regard to innovation? 13 point gap
Barrier to innovation
IT does not play a major role
Enabler of innovation
Not an “expert” but a proactive champion
Authority or expert on innovation
6%
7%
30%
24%
Barrier to innovation
IT does not play a major role
Enabler of innovation
Not an “expert” but a proactive champion
Authority or expert on innovation
7%
10%
32%
29%
21%34%
Copyright © 2012 CA. All rights reserved.26
4. IT Report Card
IT Respondents Business Executive Respondents
Q19a: What is the perception of the role of the CIO or top IT executive in your organization with regard to innovation? Base: IT 399 Bus Execs 401
How important is it that your CIO or top IT Executive be a proactive champion of innovation?
Critical
Very important
Somewhat important
Not very important
Not at all important
20%
53%
19%
7%
2%
73%
Copyright © 2012 CA. All rights reserved.27
4. IT Report Card
Q19b: Regardless of the current perception, how important is it that your organization’s CIO or top IT executive take on the role of a proactive champion of innovation? Base: Bus Execs 401
Business Executive Respondents
Q17: Which of the following best describes the current relationship between IT and the business with respect to innovation at your organization? Base: Freq/Est 387, Minimal/No: 156
Current relationship between IT and the business is the most positive in innovative organizations
Combative
Distrustful/Wary
Neutral or Siloed
Cooperative
Collaborative
2%
8%
32%
40%
18%
2%
4%
17%
47%
31%
Innovation Frequent/Est Innovation Minimal/None
4. IT Report Card
23% Innovative Orgs (42% Non-Innovative Orgs)
78% Innovative Orgs (58% Non-Innovative Orgs)
Copyright © 2012 CA. All rights reserved.28
Q18: How frequently do the following scenarios occur within your organization with respect to innovative projects? Base: IT 399 Bus Execs 401
Stealth IT: The business circumvents IT and purchases technology on their own to support a new project
IT-Led: IT approaches the business with opportunities to invest in new technology that will enable innovation
Collaborative Process: IT and the business engage in an established process to identify new projects/opportunities for innovation
Business-Led: The business approaches IT first with their technology requirements to support a new project
28%
34%
34%
42%
19%
19%
25%
42%
Bus Exec Respondents IT Respondents
12%
How innovative projects are led: percent indicating “frequently” for each scenario
Perception gap
Copyright © 2012 CA. All rights reserved.29
4. IT Report Card
Q8: How would you rate IT’s ability to support and enable innovation within your organization in terms of the following? Base: IT 399 Bus Execs 401
IT’s ability to support innovation (% rating excellent/good) Bus Execs more negative across all areas
Available budget
Staff level (amount of available staff)
Overall speed and agility
Access to the right technology
Business and communication skills
Receptiveness to new ideas
Technical skills and expertise
Knowledge of the business
46%
47%
51%
57%
58%
59%
62%
62%
53%
57%
62%
70%
69%
75%
72%
75%
IT Responents Bus Exec Respondents
16 point gap!
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4. IT Report Card
31
Q9: In your opinion, how can IT better support innovation initiatives at your organization? (Please select up to three.) Base: WW 800
Help the business quantify/measure benefits
Develop tools to streamline innovation processes
Reprioritize IT spending towards innovation
Invest in new talent/skills
Be more proactive in identifying technology to fuel innovation
Provide better access to data for decision-making
Improve communication and alignment w/the business
Be more proactive in identifying opportunities for innovation
Increase business knowledge within IT
Increase speed/productivity
0% 5% 10% 15% 20% 25% 30% 35%
17%
19%
21%
22%
22%
23%
25%
26%
26%
29%
Advice from business executives on what IT can do to better support innovation
31 Copyright © 2012 CA. All rights reserved.
4. IT Report Card
IT is slightly more confident than Bus Executives that their organizations will be successful implementing innovation projects
Extremely/Very confident Somewhat confident Not very/not at all confident
64%
28%
8%
56%
32%
13%
IT Respondents Bus Exec Respondents
Copyright © 2012 CA. All rights reserved.32
4. IT Report Card
Q23: Overall, how confident are you that your organization will be successful in implementing the innovation projects it needs to be successful? Base: IT 399 Bus Execs 401
U.S. respondents are less optimistic – only 42% are extremely/very confident, and 21% are not very/not at all confident
33 Copyright © 2012 CA. All rights reserved.
Share this research with your peers in the business – begin a dialogue on the role your IT organization can and should play in driving innovation
Assess your current project priorities – is the balance in line? Are you doing enough to support innovation? What can you stop doing?
Assess your organization's current skills and expertise – do you have what it will take to succeed in driving innovation versus keeping the lights on?
Consider formalizing how innovation fits into your existing processes -- innovative companies emphasize planning, process and structure
Look for ways to tap into your customers for suggestions on new services or ways you can improve your business
Be sure to enroll your executive management – show them the bottom line benefits and potential to improve the organization’s market position through your proposed innovation projects
Action plan – steps to take next
This presentation contains the tabulated results from a custom global survey on the topic of innovation by CA Technologies, conducted by IDG in July 2012.
This survey was administered online and programmed in English, German, French, Japanese, and Brazilian Portuguese.
Invitations were sent to IDG Enterprise Research Panel members with the goal of collecting 800 total completes from among the larger pool. Results are based upon qualified responses among individuals who met the following criteria:
IT Executive (Director or above) or business executive (VP and above) title Employed at an enterprise organization (revenues of $1 billion or more in the United States and $250
million or more outside the U.S.)
A combined total of 800 surveys were completed online between June 28, 2012 and July 16, 2012 in the following regions: 150 in the United States, 300 in EMEA (100 each in the UK, Germany and France), 275 in APAC (100 each in Japan and Singapore, and 75 in Australia), 75 in Latin America (Brazil)
The margin of error for a sample size of 800 is +/- 3.5 percentage points. Qualified respondents were required to answer all questions. Percentages on single select questions may not sum to 100% due to rounding.
Research methodology
34 Copyright © 2012 CA. All rights reserved.
Copyright © 2012 CA. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. This document is for your informational purposes only. CA assumes no responsibility for the accuracy or completeness of the information. To the extent permitted by applicable law, CA provides this document “as is” without warranty of any kind, including, without limitation, any implied warranties of merchantability, fitness for a particular purpose, or non-infringement. In no event will CA be liable for any loss or damage, direct or indirect, from the use of this document, including, without limitation, lost profits, business interruption, goodwill or lost data, even if CA is expressly advised in advance of the possibility of such damages.
35 Copyright © 2012 CA. All rights reserved.