Institutionalize Innovation through IT. Leverage IT’s strong multi-department spanning position to facilitate innovation across the enterprise. Introduction. - PowerPoint PPT Presentation
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Institutionalize Innovation through ITLeverage IT’s strong multi-department spanning position to facilitate innovation across the enterprise.
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The changing technology landscape provides opportunities for IT to become an innovation partner and facilitate enterprise-wide innovation.
Introduction
CIOs and IT leaders trying to maximize efficiency and value to the business.
CEOs and Business unit leaders looking for greater innovative thinking from IT.
Business and IT leaders trying to move from ad hoc innovation to having a repeatable business process that fosters innovation.
Ensure that IT is achieving the levels of business satisfaction necessary for it to be a partner in innovation.
Adapt your IT strategy as business
strategies evolve with disruptive technologies.
Facilitate innovation across the enterprise by leveraging IT’s cross-silo functionality.
Prepare for the future with people and processes equipped for repeatable improvement and innovation.
This Research Is Designed For: This Research Will Help You:
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Executive Summary
Disruptive technologies are changing the IT landscape.
Earn the mandate to facilitate innovation enterprise-wide.
Position IT in an engine that allows innovation to be an iterative and managed business process.
• Easy access to social media, cloud computing, big data, and mobile services have bred a new class of business employee that are impacting IT’s positioning within the organization. They are more tech-savvy and have access to services outside of traditional IT departments, but may not understand the security, compliance, and risk implications that will arise.
• IT is being increasingly disengaged in organizations with high investments in disruptive technologies. An Info-Tech survey sees business units taking on more technology projects without IT. IT must find a way to get involved in these high value projects to prove themselves as an innovation partner to business executives while maintaining compliance, mitigating risk, and maximizing security.
• Due to its role, IT already has insights into departments across the organization, and into the business processes, issues, and opportunities faced by those departments. Those insights combined with IT’s knowledge of technology trends and their capabilities to impact the business enables it to facilitate innovation.
• Business executives will not see IT as an innovation partner until IT demonstrates value through: providing basic IT functions, innovating within the IT department, and helping business units innovate to achieve their strategic goals. This will allow business leaders to develop confidence in IT, and will allot IT the authority to facilitate innovation across the organization.
• IT can strategically position themselves to help facilitate an innovation engine on behalf of the organization that continuously gathers ideas, supports small teams on innovative projects, and maintains an innovation project portfolio.
• IT can provide the organization with the tools and expertise needed to facilitate innovation ideation and execution.
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Follow Info-Tech’s Innovation Roadmap to drive innovation throughout your organization
1. Build a Culture of IT InnovationRead this research to understand the cultural preconditions necessary for innovation success: business buy-in, time and resources for innovation, IT awareness of business strategy, diversity of experience, idea exchange, and innovation recognition.
2. Institutionalize Innovation through ITRead this research to understand innovation within the enterprise, how IT can become an innovation partner with the business, and how to position IT to facilitate innovation enterprise-wide while making it a managed, continuous process. Helping IT earn the mandate for innovation, the innovation value chain, and the innovation governance model will all be covered in this solution set.
3. Innovation Ideation (Upcoming Research)This research will focus on how IT can provide the ideal processes, resources, tools, and expertise that go into innovation ideation. Investigating problems, generating, assessing, and prioritizing ideas, developing the concept prototype, create business case, and idea classification will all be covered in this solution set.
4. Innovation Execution (Upcoming Research)This research will focus on how IT can provide the ideal processes, resources, tools, and expertise that go into innovation execution. Assessing needs, formalizing operations plans, team assembly, formalizing operations test plans, conducting test operations, and obtaining insights will all be covered in this solution set.
The Business’ access to disruptive technologies is exposing IT to the risk of marginalization and reduced involvementSocial, Mobile, Big Data, and Cloud provide new avenues for Innovation ROI, but more of these projects are being taken on without IT.
Low Investment High Investment0%10%20%30%40%50%60%70%80%90%
100%
8%
51%
% o
f org
s in
vest
ing
high
ly in
dis
rupt
ive
tech
.
Organizations who invest more in disruptive technologies get more ROI from innovation
Low High
Source: Info-Tech Research Group, N = 87
Decreased or No Change Increased0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
17%
36%
Low High
% o
f org
s not
icin
g an
incr
ease
in th
e #
of
proj
ects
take
n on
by
the
busi
ness
with
out I
T
Source: Info-Tech Research Group, N = 82
Investment in disruptive technologies
Organizations who invest more in disruptive technologies are experiencing shadow IT
+538% +112%
• Disruptive technologies like social media, mobile devices, big data, and cloud computing have been converging and are opening new avenues for highly valuable innovation investments.
• IT must have the knowledge to innovate around such technologies and work with the Business to optimize innovation success.
• More high value technology projects are being taken on by the Business without IT. However, taking full advantage of disruptive technologies requires technical expertise and vision, something IT can provide that business units lack.
• Get IT involved and be part of the solution by facilitating innovation. Keep IT in the loop while mitigating risk, maintaining compliance, and maximizing security.
ROI from IT innovation
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No Basic IT Delivery Basic IT Delivery Advanced IT Delivery0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
25%
60%
76%
Org
aniz
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IT-E
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-no
vatio
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IT is well positioned to facilitate innovation like any other business process
Finance Sales Marketing Customer Service
IT Applications & Infrastructure Supporting Enterprise Processes
IT has a unique horizontal view of business processes
Due to its insights into business processes and the needs of multiple business units, IT is well positioned to facilitate enterprise-wide innovation.
Organizations with IT departments that deliver advanced services are more likely to notice high IT-enabled innovation successes, however, getting the basics right is a prerequisite.
Improving IT Service Delivery Improved IT-Enabled Innovation Success
Quality of IT Service Delivery
Source: Info-Tech Research Group, N = 91
• IT enables multiple business processes across departments, giving IT:
o Multi-departmental insights into everyday needs and activities of business units.
o Working relationships with business units.o Awareness of new and emerging technologies that
enable and impact business processes.• There is an opportunity for IT to provide business value by facilitating innovation to other departments across the organization as a whole.
• IT’s role isn’t necessarily to innovate new products or services. IT can facilitate innovation; making the processes of innovative thinking and executing innovative initiatives less strenuous.
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Keep reading this set if the IT department is adequately providing the basic competencies, otherwise read the following recommended solution sets first.
Support the Business
CEO’s Hierarchy of IT Needs
Uninterrupted service delivery
Adequately enabling business units
Inexpensive service delivery
Satisfies business needs
Extends Into New Businesses
Helps Create New Industry Define New Frontier
Expand the Business
Get Fundamentals Right
Increases Revenue
Optimize Business Processes
Decreases Costs
Increases Efficiency
Incr
easi
ng IT
’s M
anda
te to
be
an in
nova
tion
part
ner
Keep reading this set if you are providing the basic competencies
Basics Competencies:
CIO’s Innovation Sweet Spot: Innovating within IT and with the Business to prove value.
IT must get the basics right to gain the credibility needed from the Business before facilitating enterprise innovation
IT FunctionsInnovative Competencies:
Decode the Real Corporate Strategy to position IT to build a strategy in line with the corporate strategy.
Move to a Stable & Controlled IT Department to identify and tackle root causes of instability in the IT department.
Read the below solution sets:
If you are not providing business units with basic IT services, focus on improving these before reading this set
Put the measures in place to avoid the risks of not innovating
Outdated Distribution Method
When competitors entered the market with new, more convenient distribution methods, Blockbuster failed to innovate and was left behind.
Closing hundreds of stores and struggling to pay off enormous debt.
Tried to Charge for Services
When Yahoo tried to charge its users for email and file sharing, the newcomer, Google, started giving them away for free. Users made the easy choice to switch.
Market value dropped to $19 billion, when they were offered $45 billion only three years ago.
Late to Digital Photography
Kodak failed to innovate and capitalize on the demand for digital photography, as well as the printers, file-sharing, and apps that followed.
Stock price is roughly 96% below its peak from 1997.
Innovation “inaction” can be detrimental to revenues, market share, and brand loyalty.
For more information, see the Appendix – Innovation “Inaction” Risk.
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Use your IT department to support a coordinated innovation strategy
Organizations encounter many stumbling blocks when trying to coordinate their innovation initiatives. IT is well positioned to help overcome this. Keep reading this set to discover how to position your IT department to improve the innovation process in your company.
Problems in innovation may not stem from a lack of ideas, but from poor governance, development, culture, or processes.
82% of Fortune 500 CEOs feel their organization did an effective job of [innovation] strategic
planning. However, only 14% of those same CEOs indicated that their organization did an effective
job of implementing the [innovation] strategy.– Forbes Magazine in American Institute for Innovation Excellence
Companies typically realize only about60% of their [innovation] strategy’s potential value because of breakdowns in planning and execution.
– Harvard Business Review in American Institute forInnovation Excellence
Embed innovation into the corporate strategy. Innovation needs to be institutionalized like a business process. It needs to be nurtured and coordinated, and not just pushed to the side or something that is loosely discussed. IT can improve your organization’s innovation success and avoid failing to execute by reducing the friction points of coordination.
This solution set will help position IT as an innovation partner and facilitator in the organizationFollow this model and its phases throughout this storyboard to begin your journey in institutionalizing innovation through IT.
Facilitate Enterprise-Wide Innovation
Innovate Within
IT
Understand Innovation
Innovate with
Business Units
12
3
4Understand Innovation. Understand classes of innovation, IT’s role within the innovation value chain, the value of an innovation portfolio, and the innovation engine within an enterprise.Innovate Within IT. After establishing proficiency as a firefighter and trusted operator, IT must gain credibility by showing the Business that they can innovate within themselves (e.g. reduce IT costs without negatively impacting performance).Innovate with Business Units. IT must show the business that they can provide significant value by working alongside business units to achieve strategic goals and optimize processes. IT will then earn future projects and partnerships. Facilitate Enterprise-Wide Innovation. After earning the innovation mandate, build repeatable innovation processes that become standard, collaborative efforts between the Business and IT within the organization.
Follow this diagram to navigate your way
through the storyboard.
IT won’t be able to convince the CEO it can be an innovation facilitator until it earns the mandate through getting the basics right, innovating within themselves and for business units. When business units want to work with IT on complex projects, IT can begin its pitch in facilitating enterprise-wide innovation.
Info-Tech Insight
1
2
3
4
This solution set will help IT position itself to facilitate innovation across the organization
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What’s in this Section: Sections:
Understand Innovation
Understand InnovationInnovate Within IT
Innovate with Business Units
Facilitate Enterprise-Wide Innovation
• The innovation value chain.• Definition of innovation and classes of innovation.• Value from managing the innovation portfolio.• Organizational innovation ecosystem.• Cultural preconditions and barriers to innovation.• Models of innovation within an enterprise.• Perceptions of innovation across the enterprise.
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Understand an ideal Innovation Value Chain that ensures effective ideation and execution
Fostering creativity within the organization. Generating a high volume of broad ranging innovative
ideas. Developing, testing and validating ideas through
concept prototyping. Screening, uncovering and selecting high potential
concepts. Developing business cases for high potential concepts. Selecting high potential concepts for execution. Being exposed to new and emerging trends in areas of
interest.
Allocating appropriate resources for implementation. Creating the unique team, skills, business model,
processes, metrics, etc., as needed, for the initiative. Developing and managing the initiative in a structured
and disciplined manner, enabling targeted insights and refinement.
Regularly comparing the performance and direction of the concept against base assumptions to increase accuracy of predictions.
Once success is achieved, embedding the initiative into the existing organization or terminating the initiative if unsuccessful.
Innovation Portfolio Management
Ideation is about… Execution is about…
Innovation requires a process to ensure ideas are continuously generated, filtered, prioritized, and executed.
Filter Idea Into:IncrementalEvolutionary
Transformational
Assess Capability
NeedsGenerate &
Assess Ideas
Screen & Prototype Concept
Select Concept &
Create Business
Case
Frame & Investigate
the Problem
Assemble Team
Formalize Experiment
Conduct Experiment
Build Insights &
Refine Model
1. Ideation 2. Execution
Innovation Value Chain
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Filter your innovative ideas into three classes to prioritize within an innovation project portfolio
Idea Class Defined Current Industry Examples
Transformational Ideas
Radically new way of doing things, leading to new market, product, or customer creation.
Mining Geo-radar
Healthcare Integrated eHealth Records
Agriculture Seed Engineering
Automotive Electronic Vehicles
Evolutionary Ideas
Significant product or service development initiatives similar to, and building upon, current capabilities.
Mining Fatigue Monitoring Watch
Healthcare Electronic Patient Record
Agriculture GPS Combine Harvester
Automotive GPS Navigation
IncrementalIdeas
Continuous small process, product, or service improvements.
Mining LED Headlamp
Healthcare Patient Databases
Agriculture Automated Irrigation
Automotive Assembly Line Process
Internal Business Innovation
Internal IT Innovation
External Client
Innovation
Product / Services
Innovation
“Innovation is the effort to create purposeful, focused change in an enterprise’s economic or social potential.” – Peter Drucker
Innovations do not necessarily have to be technology driven. The assembly line process is an innovative way to improve productivity, but doesn’t always leverage technology. Also, innovations do not need to be brand new, and are industry specific. For example, a municipal government leveraging GPS units in snow-plows to best manage and track fleet would be considered an evolutionary innovation.
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Resource Allocation Profile
70% to Incremental 20% to
Evolutionary
10% to Transformational
Balance your innovation portfolio to achieve above-average returns
Source: Managing Your Innovation Portfolio, by Bansi Nagji and Geoff Tuff - Harvard Business Review, May 2012
A report looked at companies that outperformed the S&P 500 and found a pattern of innovation investment allocation:
Studies in several organizations show the highest long-term cumulative return is achieved by transformational innovations.
Highly innovative companies have found the following innovation project allocation the most beneficial. Consider it for your organization’s portfolio.
Although transformational innovations provide the highest ROI, they are almost always the most risky and resource intensive. Recognize that incremental process improvements still have many tangible benefits such as better alignment and communication across the organization. Diversifying your innovation portfolio works much like optimizing risk in a stock portfolio. This is one allocation of innovation initiatives that has been impactful with some companies, and may work for you.
Proportion of Return from Innovation Class
70% ROI from Transformational
10% from Incremental 20% from
Evolutionary
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Organization Innovation Vision
Drivers(Push Factors)
External Relationships and Collaboration
Innovation Ecosystem
• Customers / Clients• Suppliers• Alliance Partners• Research organizations
• Academics and scientists• User generated content / Social Networks• Subject matter experts • Government(s)
• Social factors• Political factors• Global and local
factors• Competitive
pressures• Environmental
changes• Disruptive
technologies• Strategic
priorities• Client
behaviour
• CEO vision• Anticipating future• Opportunity ambition
• Clear goals and accountability• Strategic alignment
• Risk appetite• Incentives• Management buy-in
Enablers(Pull Factors)• CEO vision• Anticipation of
future customer and market needs
• Competitive leadership
• Research leadership
• Shareholder expectations
Execution ProcessIdeation Process
Drivers, Measurement, Rewards• Skills and talent• Cross-functional thinking• Culture of change• Environment & competitive intelligence• Playing to win, rewards, celebrating eccentricity
Recognize the factors that impact your organization’s Innovation Ecosystem
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Implement the cultural preconditions needed for innovation success
Benefits of innovation can include…• Organizational process improvements
• Product or service developments
• Achievement of the strategic goals
Precondition Why is it important?
1 Business Buy-in Even if IT is innovating within itself, the business doesn’t always recognize this. IT has to work with the business to have a real impact on the organization.
2 Time and Resources for Innovation
Innovation can be risky. The organization must provide employees with time and resources to invest in innovative ideas, or few workers will innovate.
3 IT Awareness and Business Strategy
Innovation requires an end-goal. Help IT workers understand the objectives of the organization and let them figure out how to get there.
4 Diversity of ExperienceInnovation thrives on diverse backgrounds and experiences. Applying concepts from one domain to problems in another allows teams and individuals to come up with radically new solutions and approaches.
5 Idea Exchange Innovation is a collaborative activity. Facilitate the exchange of information in a variety of contexts while experimenting with a variety of tools.
6 Recognition of Innovators Promote innovation through individual recognition. While individual monetary rewards do not promote innovation, individual recognition does.
To evaluate the gaps in your organization, prioritize the preconditions based on your organizational characteristics, and tally the expected cost of achieving a culture of innovation, use Info-Tech’s Innovation Roadmap & Cost Estimator Tool. Compare the cost of achieving innovation with the organizational benefits of IT innovation to assess whether the roadmap makes sense for you.
Costs of innovation can include…• IT worker and managerial time• Infrastructure use• Monetary rewards and payouts
Costs of not innovating can include…• Reduced market share• Declining revenues• Outdated business processes
Overcome the innovation barriers to accelerate the innovation process
Top 3 Obstacles: Successful Innovation Organizations
1. Lengthy Development Times
2. Risk Averse Culture3. Seeing the Right Ideas
Survey respondents ranked five obstacles from most to least challenging. Overcoming a risk averse culture was cited as the most challenging.
Obstacle IT can help overcome this by...
1 Risk Averse Culture Encouraging creative thinking and pushing IT staff to create without being afraid to fail.
2 Lack of Coordination Within the Company
Streamline and automate business processes. IT’s overarching position can help organize and architect standard processes through the whole company.
3 Lengthy Development Times Don’t be afraid to externally source a project if the Business feels it will be too costly or lengthy if taken on internally.
4 Seeing the Right Ideas to Commercialize
Implementing or building an ideation management software or platform to organize and prioritize the right ideas.
5 Inability to Adequately Measure Performance
Leveraging integration into information systems to build the proper reporting and analytics tools to measure a project’s impact.
Source: Info-Tech Research Group, N = 56
Top 3 Obstacles: Unsuccessful Innovation
Organizations1. Lack of Coordination
2. Risk Averse Culture3. Lengthy Development
Times
Obstacles can be unique to your organization based on size, industry, or complexity. However, overcoming a risk averse culture should remain a top priority as both successful and unsuccessful innovation organizations cited it as a top 3 barrier. For more advice on creating a culture of innovation see Info-Tech’s solution set Build a Culture of IT Innovation.
Understand the organizational models that can facilitate innovation, and how IT fits into them
BU1 Lead
BU2 Lead
BU3 Lead
Shared Innovation Team
BU1 Lead
BU2 Lead
BU3 LeadIT
IT Innovation
BU1 Innovation
BU2 Innovation
BU3 Innovation
A central unit responsible for all innovation activities. This model is not recommended.
Centralized Support Model
BU1 Lead
BU2 Lead
BU3 LeadIT
Innovation Group
Info-Tech recommends the Federal Model where activities are shared by the business and a multi-department spanning entity like IT.
Federal Model
Innovation activities are the sole responsibility of the business units. This model is not recommended.
Decentralized Model
• Scale economics• Pooled experience• Critical mass of skills
Benefits
• Scale economics• Pooled experience• Critical mass of skills• Business unit ownership• Pooled resources• Business units control priorities• Shared innovation leadership• Enterprise perspective
Benefits• Business unit ownership• Pooled resources• Business units control priorities
Benefits
• Less responsive to business unit priorities
• Little business unit ownership• Little business unit cost control
Drawbacks• Potentially more costly• No synergy• Lack of critical mass and budget to
pursue transnational innovation
Drawbacks
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Do not be quick to set innovation goals or processes that have been successful in other companies or industriesThe optimal focus is dependent on the innovation goals and strategy, and is influenced by industry, competitive position, and stage of development.
• Transformational innovations may have the most impact for a company, but it carries a higher risk.
• Companies who are lagging behind may feel that this risk is worth the reward, but leading players in the market might not be willing to compromise their position as much. Trailing companies may in fact benefit from the innovations by industry leaders.
Competitive position within industry
• The maturity of the organization is going to influence how adaptive it is to change, and change is a big part of transformational innovations.
• Large, established organizations are going to find it harder to change major processes than small, agile organizations.
• Small, new players are trying to make a name for themselves and carve out a spot in the market, so they are more likely to take on the risk that comes with transformational innovation.
Stage of development
• Some industries, like technology, have more opportunities for transformational innovations and indeed expect more of it from the players in that industry due to the fast paced environment.
• Other industries, like consumer goods, might not require the same frequency of transformative innovation.
Industry
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Identify how business units perceive innovation and IT’s role within it to ensure strategic alignment
Innovation can look different within the enterprise. How business and IT executives view innovation will impact innovation success. The greater the difference in how the CEO and CIO view innovation, the more difficult it becomes for IT to create value that is aligned with the business’ strategy. CEOs are more concerned with new revenue streams or new products, and IT leaders are more concerned with innovating through efficiency gains.
Innovation can mean something different to IT and the Business. Ensure that IT sees innovation the same way as the Business to earn the mandate.
IT is often viewed as the trolls under the bridge that don't know anything about what the business is doing; we only pop up to create roadblocks. In actuality, IT is often going the extra
mile to address issues the business left unanticipated in project formation and necessitate significant re-work and/or
re-planning. - Erich Huemoeller, IT Director, State of
Wisconsin Investment BoardIf I went to most of the VPs in the company, their opinion of IT would be
not dissimilar to other organization’s IT departments in that they may consider us to be slow and bureaucratic. But I would hope that they would suggest
that in an informal ‘consultative’ model with our IT leaders, we are very helpful and help steer some innovative solutions
for our company. - Steven Groves, CIO, Goodlife Fitness
Inform your IT department. Communicate to the IT department the strategic goals of the Business and relate that to current and future IT projects. The more often the Business sees IT providing useable and cost-effective tools, the more likely IT will have a seat at the strategic table. When IT has an aligned strategic vision, it is more likely business executives and IT leaders share the same innovation views.
Keep the Business interested in IT. Due to the rapid adoption of disruptive technologies by business units, they may perceive IT as being less capable. Also, the Business may believe that IT is actually a barrier to innovation by constantly putting up roadblocks to new ideas. If the CEO does not think IT has what it takes to be an innovation player and is outsourcing technology services, the CIO needs to accommodate these needs while maintaining compliance, mitigating risk, and maximizing security. At the least, the business will not see IT as a barrier and it will improve rapport.
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Involve IT in a range of innovation initiatives that may not all be technology focusedInnovations can range from purely business to purely technology based, and purely internal to externally focused.
Business Based
Innovations
Technology Based
Innovations
Client and Industry
Innovations
Pure
Bus
ines
s
Technology-Enabled Business
Innovations
Pure
IT
Internal Focus External Focus
Incr
easi
ng d
iffic
ulty
for I
T to
exe
cute
Technology Based Innovations are new technology initiatives that take place in the IT department to primarily improve efficiency. Examples include server virtualization, virtual desktop infrastructure, and automated security monitoring. These are key for innovating within IT.
Business Based Innovations are improvements to business activities without the need for IT systems or support. Examples include client experiences (without technology use), business model innovation, and customer segmentation approaches. These are key for innovating with business units.
Client and Industry Innovations are about innovating how the organization interacts with clients and stakeholders. Examples include client experiences, new products, services, and markets, transformational platforms, and market creation. These are key in facilitating enterprise-wide innovation.
Technology-enabled business innovations are one way that IT can be involved with enterprise innovation. These are about using new or existing technologies to automate business operations or to create new business models to improve efficiency. Examples include business analytics and business process automation. IT is well positioned to be involved in purely business or purely client and industry innovations by facilitating ideation and execution, so get IT working to improve the innovation practices across the enterprise.
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What’s in this Section: Sections:
Innovate Within IT
Understand Innovation
Innovate Within ITInnovate for Business Units
Facilitate Enterprise-Wide Innovation
• Importance of innovating within IT.• Innovations within IT having business value.• Case study of an innovation within IT.• Barriers to innovation within the IT department.• Communicating the importance of innovation to IT
staff.
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No Satisfaction Satisfaction0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
16%
80%
Org
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IT-E
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-tio
n Su
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)
Get the basics right and innovate within IT before attempting to innovate with business unitsIncrease IT credibility by doing more than keeping the digital lights on.
Keep the lights on and manage assets effectively to:Acquire insights into everyday needs and practices of business
units.Understand internal infrastructure capabilities and integration
requirements.Acquire insights to the types of technologies workers are using
(phones, laptops, tablets) and what applications they are using (customer relationship mgmt, enterprise content mgmt, etc.).
Gain basic confidence and credibility from business units. Provide IT units with more time to focus on innovation
initiatives as they are not constantly fighting fires.
Get the Basics Right
Optimize service efficiency by:Reducing costs (e.g. service tiering, server virtualization).Improving quality of service [e.g. integrating enterprise applications,
leveraging cloud application program interfaces (APIs)]. Gaining confidence from business units that IT can manage,
plan, and strategize. Gaining an understanding of what it takes to be a successful
innovator.
Innovate Within IT
IT Departments that Achieve Business Satisfaction with IT Innovations Improve
IT-Enabled Innovation SuccessSource: Info-Tech Research Group, N = 91
+391%
IT organizations need to have the fundamentals correct in order to innovate;
having a stable infrastructure and virtualizing servers before thinking about innovation in the context of the enterprise,
is a prerequisite.- Steve Njenga, IT Director, H.D. Vest Inc.
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Show innovations within IT as having business value by speaking the Business’ language
We approached the business with the dollars and cents of the project to portray value.
Business people don’t necessarily care about the
specifics like number of VM’s.- Manager of Data Center
Operations, Entertainment Industry
Business units live on the bottom line, and do not necessarily see the work that IT does to enable their everyday processes.Server virtualization, service tiering, and leveraging cloud APIs are examples of innovations within IT that provide significant value. However, business units do not know, or necessarily care, how IT is providing this value. They may not understand how much effort is going on within IT to move forward with such initiatives.When speaking with business units, portray IT value with metrics or examples that they can understand such as cost savings, time reductions, or increases in competitive advantage. These value propositions may differ with the nature of the business units (marketing, finance, etc.).
• Can yield large cost savings and ensure that IT resources are allocated to where they are needed most.
• Communicate the cost savings to the business by avoiding over provisioning.
Service Tiering
• Can yield large cost savings (e.g. lower utility bills and application isolation to reduce server sprawl), increased uptime, and faster server provisioning.
• Communicate the cost savings and lower time to dedicate resources.
Server virtualization
• Can yield cost savings and service benefits when used appropriately.
• E.g. cloud bursting on a customer interaction website with volatile peak usage creates value through more uninterrupted time with clients.
Cloud API Ecosystem
Do not try to shoot for the stars when innovating within IT if it is not feasible. Incremental innovation within IT is a great place to start to gain the credibility necessary to be an innovation partner. Recall that IT departments that achieve business satisfaction improves IT-enabled innovation success. An effective way to communicate IT value is to optimize quality of service and show value to achieve business satisfaction.
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We internally set up our own private cloud to have an end-user interface to compete with external cloud resources. If customers want a VM or new equipment, they can go through the interface and provision it as easily as they could on Amazon, at a lower cost and on-site; so latency and throughput are excellent.
- IT Director, Communications Industry
Innovations within IT matter: A communications firm built a private cloud that resulted in large cost savings
Industry:Segment:
CommunicationsRetail Telecommunications
• The firm is a decentralized telecommunications company. The company was 65% virtualized, and were considering private cloud options to improve service delivery across the enterprise.
• An opportunity existed to reduce the TCO and improve service quality by moving to a cloud environment.
• The Data Center Operations team was tasked with spearheading the initiative.
Situation
• After extensive research and cost comparisons, the Team discovered that building the private cloud infrastructure internally was the most cost effective option for their situation.
• The initiative was piloted within
technology departments before an enterprise-wide rollout.
• The infrastructure granted better quality of service than external vendors at a lower cost.
Resolution
• The project was communicated to the business in business terms: dollars and cents, and improved service delivery metrics were detailed instead of specific RAM or bandwidth specifications.
• The private cloud yielded cost savings of 45%, and improved service delivery through lower latency and higher throughput.
Results
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IT explains
IT includes stakeholders
IT seeks approval
IT identifies innovators
0% 50% 100%
82%
81%
80%
89%
54%
58%
53%
58%
NoYes
% achieve organizational efficiency improvement through IT innovation
Stakeholder involvement drives improvement of organizational efficiency through IT innovation
IT can improve its own efficiency without business buy-in, but it is better if the business is aware of IT improvements since improving organizational efficiency requires coordination with the business. Ultimately it is IT’s impact on the broader organization that really counts, so seek business buy-in for IT innovation.
Improving efficiency of the entire organization requires coordination of IT innovations with business processes and practices. Without coordination, IT innovation cannot service the future state of the business, and IT innovation cannot drive business change.
Source: Info-Tech Research Group; N=209
Communicate innovations within IT to the rest of the enterprise.Even operational improvement requires business buy-in
• Many IT leaders seek the “black box” approach to IT innovation: driving IT workers to innovate and improve IT efficiency without making the business aware of IT’s agenda or not relating these improvements to business processes.
• IT leaders hope to impress the Business with productivity improvements, without emphasizing that IT innovation was the root cause.
• While this approach can bring about efficiency improvements within IT, the impact of this type of innovation will always be limited.
• Impactful innovation that aligns IT with the business requires business buy-in from the beginning.
Avoid a private approach when innovating within IT to keep relevant stakeholders informed and interested
Info-Tech Research Group 27
Overcome the common barriers to increase your chances of innovating within IT
Barrier IT can overcome this by...
1Lack of
innovation culture
IT workers tend to focus on being good technologists. Leverage this expertise and communicate to them how much value they can bring to the business through innovating within IT. Expose them to the business and business issues directly by having IT people co-located and spend time with business counterparts. They can develop an appreciation of what the business problems are and how IT can help. This issue may be stemming from the fact that that IT staff have very little time to focus on innovation, so work this into IT’s routine.
2 Legacy systems
These are older systems that may have some level of customization. Legacy systems can eat up resources and there is lots of uncertainty in systems if they are removed. As the developers responsible for maintaining these legacy systems retire from the workforce, businesses need to proactively modernize their aging systems. For insights on this and some viable vendors that can provide value read Info-Tech’s Vendor Landscape: Legacy Software Modernization.
3Lack of
adequate funding
Make business cases for innovation initiatives with the appropriate benefits and costs in business terms. Aligning IT projects with strategic initiatives is your best chance to have projects funded.
4Little expertise
to innovate around new technologies
Always ensure that IT staff are well-versed in disruptive technologies. Business users will want to leverage these and will only seek IT guidance if the appropriate expertise is in house. Actively develop external relationships and collaborate with consultants and vendors to have the right expertise available when necessary.
Info-Tech has identified the following major barriers to innovating within IT.
There is so much knowledge wrapped up, and in some cases locked up in the minds of people in IT. We are not always able to take advantage of it because their skills and resources are being
applied to the jobs we hired them to do.- Steven Groves, CIO, Goodlife Fitness
Key techniques for communicating strategy• Communicate the importance of IT
innovation• Stay involved in IT innovation
Do not communicate Communicate0%
50%
100%
45%
80%
Ove
rall
succ
ess
of IT
inno
vatio
n 2
(% s
ucce
ed)
Communicating the importance of IT innovation to the business strategy to IT workers drives innovation success 2
Understanding the importance of innovation helps define the problem that innovation solves
Source: Info-Tech Research Group; N=216
A large barrier is a lack of innovation culture within IT. Motivate your IT staff to innovate, and align innovations within IT to business strategies.
Without a direct link to business strategy, IT innovation will have limited value. This needs to be communicated across the organization, including IT staff. For more on how to motivate employees to innovate, see Info-Tech’s research Build a Culture of IT Innovation.
Provide motivation as well as guidance:Make sure you understand the business strategy as it relates to IT, and that you communicate the following to IT workers:
• The business objectives.• How IT innovation will accomplish those objectives.• The benefit to the IT worker of participating in and
advancing those objectives.Understanding the importance of IT innovation to the business strategy is a major driver of success.
Understanding strategy achieves:• Problem definition: knowing the business strategy, IT
workers can innovate to advance company objectives.• Motivation: a sense of the importance of IT innovation to
the business strategy helps motive IT workers.
Showcase the importance of IT innovation in the business strategy to IT employees
Innovate with Business UnitsFacilitate Enterprise-Wide Innovation
• The value of IT helping to achieve strategic goals.• Early IT involvement in projects.• Communicating IT’s value to business units.• Competing or completing the Cloud.• Example of IT-driven innovations for the Business.
Info-Tech Research Group 30
Does Not Achieve Does Achieve0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
13%
83%
Org
aniz
atio
ns N
otic
ing
IT-E
nabl
ed
Inno
vatio
n Su
cces
s (%
)
The more experience you have innovating with business units, the more successful you will be at facilitating enterprise-wide innovation.
Improve business productivity by:Providing the business with appropriate tools and analytics.Reducing points of frictions in the supply chain.Working with the business to roll out new products and services.
Reduce business costs by:Helping business units leverage IT technologies to reduce costs.
• Business units live on the bottom line and are very concerned with reducing costs without impacting quality.
Communicate business value of IT through:IT excellenceOpen communication with business unitsHighlighting past challenges where IT provided value
Innovate with the Business
Enable business units to achieve strategic goals to earn the mandate for facilitating enterprise-wide innovation
Source: Info-Tech Research Group, N = 91
+531%
Finance was amazed at the realization that ‘this IT guy gets my line of business, he is speaking my language, and he understands the different
ins and outs that I deal with.’ That automatically raises not only credibility but it adds a level of
trust that may not have been there before.- Ed Murphy, Director of Application Development,
University of Wisconsin Colleges
IT Achievement of the Business’ Strategic Goals
IT Departments that Facilitate the Achievement of the Business’s Strategic Goals Improves IT-
Enabled Innovation Success
Facilitating innovation across the company is a large step forward from innovating with individual business units. Gain the detailed insights into business units and the confidence necessary to facilitate enterprise-wide innovation by getting involved with business unit innovations.
Info-Tech Research Group 31
No Basic IT Delivery Basic IT Delivery Advanced IT Delivery0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
25%
60%
76%
Org
aniz
atio
ns N
otic
ing
IT-E
nabl
ed In
-no
vatio
n Su
cces
s (%
)
Business units will not turn to IT if you just manage problems reactively or only innovate within IT. Remember: Improving IT Service Delivery
Improves IT-Enabled Innovation SuccessSource: Info-Tech Research Group, N = 91
Advance IT services to improve business efficiency and to show IT can innovate with business units
Advanced IT service delivery is defined as: 1. Working extensively with the business to roll
out new products and services2. Providing the business with appropriate tools
and analytics 3. Improving the efficiency of business processes
Prove to business executives that IT should be involved in innovation projects and earn the mandate to be part of innovation by:
1. Working extensively with the business to roll out new products and services.• This is a very good way to show tangible
benefits of IT innovating with the business. • Provide the tools to optimize new products or
services through practices such as process automation.
2. Providing the business with appropriate tools and analytics. • The right tools can significantly reduce time to
production or market.• Analytics are especially valuable for
employees that require data to make decisions. Having timely, accessible, and accurate data will empower decision makers.
3. Improving the efficiency of business processes.• Reducing time or resources necessary to
execute processes.
Info-Tech Research Group 32
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0%10%20%30%40%50%60%70%80%90%
100% Business Involvement IT Involvement
Project Completion (%)Pe
rcen
t of I
nvol
vem
ent (
%)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0%10%20%30%40%50%60%70%80%90%
100%Business Involvement IT Involvement
Project Completion (%)
Perc
ent o
f Inv
olve
men
t (%
)
Ideal case: Successful models get IT involved fromthe initiation of the project.
Prompt the business to realize that IT is a necessary project partner to reduce project costsIT is usually only involved in projects after the initial issue identification and problem is scoped. Get IT involved earlier in projects.
The longer business units wait to involve IT, the greater the risk of more expensive solutions, ill fitting solutions, server overload, reduced data security, and lost opportunities for optimizing or automating with IT.
Earlier IT involvement improves project design resulting in lower costs. Communicate the value of IT by proving value through IT practices, openly communicating with the Business, and highlighting projects challenges where IT could have provided value.
This is the area where
most problems
can be identified.
More IT involvement earlier in the project
Typical case: IT is not involved till much later on in the project due to a lack of knowledge of the value IT can provide, or low confidence in IT from the Business.
Source: Info-Tech Research Group
Info-Tech Research Group 33
Communicate the value IT can bring to business processes
Proving value through IT delivery, open communication, and highlighting project challenges are impactful ways IT leaders can portray business value.
• Meet regularly with business units and highlight any suggestions for improvement to help enable them to achieve their strategic goals.
• It is imperative to speak the same language as the Business.
• Once business units see the value IT can bring, they will be more likely to involve you in projects.
• The CIO should promote IT value within the executive team.
Open communication
• As described, demonstrating innovation within IT is an impactful way to get the business units’ attention.
• If you have your own house in order, the business is more likely to come to you for help.
.
Provide significant value through IT
• Quantify the benefits past project could have accrued if IT had been involved.
• Show the value IT brought in recent projects, or can bring to upcoming projects.
• See the New England School of Law case study where allowing IT to remain uninvolved led to a catastrophic event.
Project Challenges
The most impactful ways to get IT’s message across will be unique to your existing relationships and communication with business units. If you have other mediums for communication that are working continue using them and do not substitute them with the above suggestions.
Info-Tech Research Group 34
Highlight how IT’s early involvement in projects can negate potential failures Most business units do not see IT as an innovation partner even though IT involvement can identify critical problems that may not be addressed.Case Study: Business units proceed with ERP project without IT
What Should Have Happened: IT is involved as a partner
• Situation: Business units did not involve IT as they were fearful of IT pushback, which would delay the process. They went ahead with their own ERP initiatives.
• Issue: After the project rollout, the entire network and ERP system crashed.
• Business impact: The network took 5 days to repair, blacking out network access, and IT had to pick up the pieces. Afterwards, IT was consulted on more projects.
• Situation: IT is involved in the process from the start.• Issue Avoided: IT foresees capacity issues after consulting
with business units and proposes alternative solutions or ensures adequate capacity can be made available.
• Business impact: No wasted resources and improved relationship between IT and the business.
What Actually Happened: IT was not involved
• A few years ago, the business units in the New England School of Law thought IT would be quick to disregard any technology projects pitched by the business.
• Business units proceeded with technology projects without involving IT, with the assumption that once deployed, IT would be responsible for fixing any errors.
Other departments did not want to involve IT as it was typically viewed as ‘the people who always
say no’. It took our networks being down for
5 days to change this thinking and have
departments involve us more.
- Nathan Reisdorff, CIO, New England School Of Law
Although IT did achieve higher project involvement, the Business must be aware of the risks of not having IT involved before a catastrophe occurs. IT must also be knowledgeable enough to foresee such issues when approached by the Business as an innovation partner.
Info-Tech Insight
Info-Tech Research Group 35
• This option requires a critical mass of scale to achieve a cost savings against an external alternative. However, if this is feasible it is a worthwhile option to consider.
• Private clouds are an innovation within IT that can empower employees with secure access to quality service delivery to enable business processes.
• Recall the case study where the company developed a private cloud to compete with external offerings.
• For more details on how to manage internal clouds see Info-Tech’s research Manage & Plan Capacity for the Internal Cloud.
Compete with the Cloud
Complete or compete with external cloud services to combat ShadowITThe Cloud makes it difficult for IT to innovate with business units as services can be provisioned by a dedicated external vendor in very little time.
• This is the ideal solution for companies that cannot reach the critical mass necessary for cost effective private clouds. If end users are going to the Cloud regardless, make sure they do it in a way that is effective and minimizes risk.
• Consult: Provide risk assessment training to end users to communicate complications surrounding the Cloud.
• Manage: Managing Cloud deployments through service tiering or administrative controls can yield large cost savings and more control over data.
• Optimize: Track usage and spending of external deployment to optimize cloud consumption.
• See the Dropbox Case Study: realize where a need is, and innovate with the Business, for the Business.
Complete the Cloud
ShadowIT: Business units may not involve IT in external deployments due to some combination of:• Unawareness of any potential issues that may arise (e.g. compliance or integration with existing systems).• Poor relationships with IT leading to the opinion that IT will complicate or lengthen the implementation process.
You must understand where the issue lies and improve the problem at the source. If end users are unaware, you must communicate the risks and issues of not having IT involved, and try to work around these in a timely way. Improving relationships goes back to getting the basics right and innovating within IT. If you are not addressing these, business units are more likely to deploy cloud services without IT involvement, or even worse, without IT even knowing about initiatives
There was the Dropbox security incident that occurred without IT involvement. Our current network drive and SharePoint file-sharing structure was too cumbersome with mobile devices.
- IT Director, Financial Services Industry
IT works to implement secure cloud-based file-sharing after learning of the Business’ use of Dropbox.com
Industry:Segment:
Financial Services
• Business users realized that Dropbox.com could enable them to share, store, and send files from a mobile device while in the field much easier than SharePoint.
• The adoption of this service had spread organically among end users without the involvement or consent of IT. As a result, the bank became exposed to a few security incidents. The following resolution and result is an example of completing Cloud.
Situation
• As the IT department became aware of the situation, they immediately emailed the users to change their network password if it matched their Dropbox.com password.
• IT educated business users and communicated the importance of security surrounding file-sharing and leveraging cloud-based services like Dropbox.com.
Resolution• IT realized the desire for mobile
file-sharing, so they explored solutions that could provide the appropriate functionality. IT is in the planning stages of implementing Box.com’s “Box for Enterprise IT” to give their users the functionality they desire in a much more secure and controlled environment.
• IT has improved its credibility and gained business confidence by giving end users their desired tools without impeding security.
Results
Banking
Info-Tech Research Group 37
Once you have earned the mandate, get ready for facilitating enterprise-wide innovationIT has worked hard to show the Business they can be an innovation partner. Make sure you deliver within IT and with business units before advancing.Requirement Ensure IT has… Supporting Data
Understand Innovation
…Got the basics right. IT must then understand what innovation means within the enterprise and the business’ corporate strategy. IT must know the barriers to innovation and how to overcome them so they can position themselves as a key player.
Top 5 Barriers to Organizational Innovation:1. Risk Averse Culture2. Lack of Coordination Within the Company3. Lengthy Development Times4. Seeing the Right Ideas to Commercialize5. Inability to Adequately Measure Performance
Innovate Within IT
…Provided business satisfaction with IT innovations. For example, server virtualization shows the business IT can improve quality of service while reducing costs. Organization with IT departments who achieve business satisfaction through IT innovation notice a higher IT-enabled innovation success.
Innovate With Business Units
…Improved the business’ ability to achieve strategic goals. Solve business problems, avert potential disasters, and improve business processes. Organizations with IT departments who facilitate the achievement of the business’ strategic goals notice a higher IT-enabled innovation success.
IT Departments That Achieve Business Satisfaction With IT Innovations Improve IT-Enabled Innovation Success
IT Departments that Facilitate the Achievement of the Business’ Strategic Goals Improve IT-Enabled Innovation Success
No Satisfaction
Satisfaction
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
16%
80%
Does Not Achieve
Does Achieve
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
13%
83%
Source: Info-Tech R
esearch Group, N
= 91
Info-Tech Research Group 38
What’s in this Section: Sections:
Facilitate Enterprise-Wide Innovation
Understand Innovation
Innovate Within IT
Innovate with Business Units
Facilitate Enterprise-Wide Innovation
• An introduction to the Innovation Governance Model.
• IT’s role within the Innovation Governance Model.• The role of the CIO in facilitating innovation.• Tools and expertise IT can provide to the ideation
process.
Info-Tech Research Group 39
No Corporate Strategy
Corporate Strategy0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
33%
80%
Org
aniz
atio
ns N
otic
ing
IT-E
nabl
ed
Inno
vatio
n Su
cces
s (%
)
• Apply the skills and expertise gained from innovating within IT, and with business units.
• This is a large step forward from innovating within IT and with business units, so the more experience gained with these, the more business knowledge and innovation credibility IT will earn.
• Familiarize yourself with the Innovation Governance Model and IT’s role within:
o IT-Led Innovation Support Groupo Innovation Advisory Groupo IT’s Innovation oversight board
• Provide the appropriate tools, expertise, and analytics for ideation:o Innovation Process Managemento Collaboration and Content Management o Analytics and Business Intelligenceo Testing Environments and Pilot Projectso New Technology Developments
Facilitate Enterprise-Wide Innovation
Create an Innovation Workflow driven by IT to catalyze organizational innovations of all classes
Embed the innovation process with the strategic initiatives put forward by the Business and be the catalyst for continuous improvement.
+140%
Info-Tech Research Group 40
IT’s Innovation Oversight Board
IT led Innovation
Support Group
Innovation Advisory
Group
BU1 BU2 BU3
Idea Generation & Collection
Idea Repository
Innovation Value Chain
Use the Innovation Governance Model to identify, nurture, and transform ideas into business valueSlowly integrate aspects of this model into your business processes to maximize the ROI of your innovation portfolio.
1
1
2
3
4
2
3
4
The Innovation Governance Model’s main objective is to identify and nurture creative ideas showing significant potential up to and including the development of a business case. Both the Business and IT participate in this model’s process. Ideas are collected into a repository from business units and are then managed by the Innovation Support Group. Each business unit designates an Innovation Champion, who is responsible for passing on ideas to the repository. The Innovation Support Group (ISG) is responsible for facilitating the collection of organizational generated ideas into the idea repository. The ISG also provides support to projects teams working on incremental projects, while collecting insights on these projects. Secondly, the ISG drives the process of the Innovation Value Chain and takes control of planning and facilitating all innovation activities.
The Innovation Advisory Group (IAG) is responsible for providing insights and business guidance to projects teams while ensuring all innovation projects have business value. The IAG receives idea proposals and business cases from the ISG and filters evolutionary and transformational ideas into the innovation project portfolio and delegates incremental ideas to project teams for agile execution. The IAG is made up of both business and IT innovation champions. The Innovation Oversight Board (IOB) is responsible for providing the overall governance for innovation. It makes executive decisions regarding the value of the innovation portfolio and approves funding for innovation projects. The IOB acts as the ultimate escalation point for any innovation issues.
1
2
3
4
Info-Tech Research Group 41
Agile Execution of Incremental Ideas
Filter idea classes differently within the Innovation Governance Model
Idea Class Filtering Action Why is this important?
Transformational Ideas
Nurture through the ideation and execution processes in the innovation portfolio.
Since transformational ideas involve a radically new way of doing things, they need to be nurtured through the ideation and execution phases within the Innovation Value Chain due to their expensive and risky nature.
Evolutionary Ideas
At the end of ideation, consider transferring evolutionary ideas to the organization’s regular project portfolio or keep in the innovation project portfolio.
Some evolutionary ideas will be less risky, easier to implement, and generate more interest from business executives than others. Before proceeding to the execution phase, consider high executive interest as a reason to transfer the idea into the organization’s regular project portfolio.
Incremental Ideas
During the ideation phase, pull out the ready to implement incremental ideas and delegate them to project teams to execute agilely.
Taking the ideas that are easiest to implement which require less effort should be taken on as agile projects immediately. This generates quick business value while allowing more time to be spent on managing evolutionary and transformational ideas within the innovation project portfolio.
Optimize resources spent on ideas by allocating idea classes to: agile project teams, your regular project portfolio, or the innovation project portfolio.
Filter Idea Into:IncrementalEvolutionary
Transformational
Assess Capability
NeedsGenerate &
Assess Ideas
Screen & Prototype Concept
Select Concept &
Create Business
Case
Frame & Investigate
the Problem
Assemble Team
Formalize Experiment
Conduct Experiment
Build Insights &
Refine Model
1. Ideation 2. ExecutionInnovation Value Chain
Info-Tech Research Group 42
Create an Innovation Support Group to drive the ideation and business case processes
To build the foundation for the Innovation Governance Model, use Info-Tech’s Innovation Support Group Charter.
Purpose1. Organize innovation activities across the
organization. 2. Drive the ideation to business case
development process.3. Drive the process selection of incremental
ideas for agile execution. 4. Conduct funnel tracking and maintain the
repository of ideas, business cases, and potential projects.
5. Support project teams as needed.
Agenda1. Organize and drive the activities planned in
the innovation portfolio.2. Facilitate ideation across all parts of the
organization.3. Facilitate concept prototyping from all parts
of the organization. 4. Facilitate business case development for
Get Innovation Champions involved in the Innovation Advisory Group to outline innovation priorities
To define the appropriate tactics to meet business development goals, use Info-Tech’s Innovation Advisory Group Charter.
Purpose1. Ensure all idea proposals, business cases,
and projects have business value while understanding business and technical implications.
2. Provide insights and business guidance for idea proposals, business cases, and projects.
3. Detail strategies, priorities, and goals for the innovation projects and define appropriate tactics to meet business development goals for specific services.
Agenda1. Oversee the calendar of innovation-
related events and activities.2. Review innovation ideas and funding requests
to ensure relevance and value creation for at least one or more business units.
3. Rank innovation projects within the innovation portfolio by measured value and readiness to implement.
Innovation Advisory Group (IAG) Overview
IT’s Innovation Oversight Board
IT led Innovation
Support Group
Innovation Advisory
Group
BU1 BU2 BU3
Idea Generation & Collection
Idea Repository
1. Business Unit Innovation Champions
2. IT Innovation Champion3. Chief Enterprise
Architect4. Chief Risk Officer Staff5. Additional BU / IT Staff,
Use agile execution for incremental innovations that are less resource-intensiveAim to execute incremental ideas through agile projects teams that are supported by the ISG and IAG.
IT’s Innovation Oversight Board
IT led Innovation
Support Group
Innovation Advisory
Group
BU1 BU2 BU3
Idea Generation & Collection
Project Team
1. Self-organization and motivation are key to agile execution. These changes are less about the tools being used and more about the individuals executing them.
2. Quickly achieving a functional solution that is validated with users rather than a thoroughly documented project is the goal of agile execution.
3. Collaborate with end users in defining requirements throughout the implementation phase. There is little point in developing an initiative which does not meet the needs of the target audience.
4. Quick responsiveness and adaptation define agile execution.
1. Create an execution team dedicated to implementing incremental ideas.
2. Start small (scale proportionally to size of organization) with a team consisting of programming skills as well as business analysis skills.
3. Provide a pilot budget and monitor performance over the course of six months.
4. Conduct enhancement and development work in two-week sprints, regularly testing outcomes and fit with user stakeholders.
5. Assess results and level of demand for the agile team`s services going forward, scaling up the initiative as required.
Assemble a capable and versatile agile project team to execute incremental projectsWork with business units while keeping customer expectations in mind to deliver an impactful solution.
Create a continuous system of feedback and iteration between the agile project team and customer expectations.
As a result, the project deliverable and customer expectations will evolve over time and eventually converge in the final result.
• Application Development Manager• Software Developer• Programmer Analyst• Business Requirements Analyst• Business Process Analyst• Business Intelligence Specialist
See Info-Tech’s job descriptions for the individuals to consider for your agile execution team:
Extracting incremental innovation ideas will leave only evolutionary or transformational ideas in the innovation project portfolio. Having a dedicated team to work on incremental projects allows alternative groups to focus on the execution phase of the Innovation Value Chain. Dedicated teams are integral as providing uninterrupted time to work on projects leads to improved business value and likelihood of success.
The Innovation Support Group facilitates ideas generation
and collects ideas
Repository of Ideas & Business
Cases
Drives Value ChainFunnel tracking
• Balance and manage innovation portfolio
• Benefit realization• Cross-utilization and
learning• Oversee training and
education
• Innovation and Portfolio Strategy
• Innovation Mandate
• Benefit’s Accountability
Innovation Value Chain
Position IT in the Innovation Governance Model to drive and support innovation activities enterprise-wide
Project Teams work on
implementation Of innovation
ideas
This is an ideal situation of IT facilitating innovation across the enterprise. As time passes, adopt the model’s processes slowly, but refrain from implementing it all at once. Eventually, your organization will become more proficient in streamlining innovation projects and managing the innovation project portfolio.
Info-Tech Insight
Support projects
Business guidance
Insights from projects
Exposure to new technologies
Info-Tech Research Group 48
To keep track of your top ideas, use the Ideas to Prototype Proposal Template alongside the Innovation Ideas Prioritization Tool.
Use Info-Tech’s tools and templates to build cases for, manage, and rank innovation ideas in your organization
Make this template available to all employees in your organization and encourage them to forward completed proposals to the Innovation Support Group or equivalent individual or team. After reviewing the proposal, the Innovation Advisory Group analyzes the proposal’s business value and will consider adding it to the Innovation Ideas Prioritization Tool.
Transpose high value prototype proposals into this tool and score them appropriately based on the Cost and Value weightings. The tool will provide a shortlist of the ideas in “Pursue Immediately,” “Deploy Agilely,” “Plan Into the Portfolio,” and “Question Need and Solution Design” quadrants. Although it is not as comprehensive as Innovation Management Platforms, this tool provides a starting point to managing ideas.
Ideas to Prototype Proposal Template Innovation Ideas Prioritization Tool
Use the appropriate metrics to measure innovation success
To keep track of innovation initiatives in your organization, use Info-Tech’s Innovation Performance Tracking Template.
How to use this template:
Use this template to help the IT department and the Innovation Support Group keep track of the performance and success of their innovation efforts within the organization.
The Data Entry tab contains the worksheet for inputting specific performance metrics, and their target and actual values. The tool will calculate the difference between them.
Delete the grey text, fill in your own values, and then fill in the “Action Plan for Improvement” in the last column. Add any metrics that may be custom to your organization in the rows below.
The CIO must champion IT-facilitating innovation activities across the organization
How does the CIO position him/herself as the organization’s innovation facilitator?
Do not buy in to the notion that the CIO is moving explicitly from the “Chief Information Officer” to “Chief Innovation Officer.” Innovation is not a practice that should be siloed. Although disruptive technologies are altering the role of IT, corporate information still needs to be protected. The CIO is well positioned to champion IT facilitating innovation across the organization while still protecting corporate information.
CIOs must show the following competencies to promote IT’s role as an innovation facilitator.
• Can attract a range of external partners such as experts, universities, or vendors.
• Can collaborate effectively with external partners.
• Can manage external partnerships and relationships.
External Relationships
• Earn the innovation mandate from the Business.
• Insights into business issues, opportunities, and ideas.
• Act as an innovation communication coordinator for business units.
• Provide business and IT perspectives on applicability and value of innovation ideas.
Business Mandate and Knowledge
• Knowledge of innovation management and tools for innovation.
• Suitable resources.• Influencing skills and politically
savvy.• Plan for advancing the
department.
Internal (Self and IT) Capabilities
Info-Tech Research Group 51
Innovation Management Platforms and PPM
Collaboration (see Info-Tech’s Vendor Landscape: Collaboration Platforms)
Content Management (see Info-Tech’s Vendor Landscape: Enterprise Content Management for Knowledge Workers)
• IT department can coordinate and facilitate enterprise-wide ideation, and mature and track projects through execution.
• These tools include idea management, idea maturing, and PPM solutions that can streamline the innovation process and identify idea champions around the company.
• IT can be the organizational “glue” that facilitates and encourages communication and collaboration across departments, functions, and geographies.
• Provide communication links and enable the sharing of ideas in real-time to speed up problem solving.
• An organizational knowledgebase is critical to innovation, both in terms of developing ideas and in recording insights from past efforts.
• IT is the natural choice for maintaining this knowledgebase and providing access to the rest of the organization.
Understand the tools and expertise available to IT to facilitate more than just technology innovations
(see the appendix for an Innovation Management Platforms vendor shortlist, and Info-Tech’s Vendor Landscape: Enterprise Portfolio Management)
Analytics and BI (see Info-Tech’s Vendor Landscape: Mid-Market BI, or Vendor Landscape: Enterprise BI)
Testing Environments
New Technology Developments
• With its role as the manager for data and analytics tools, IT is the natural choice for driving analytical capabilities throughout the organization to enable insights.
• Solid analytics and BI tools can enable enterprise leaders to make more informed decisions in real time.
• IT applications exist to facilitate fast and cheap prototypes, and technology is often essential for the more advanced prototyping.
• The IT department can lead the selection and deployment of these applications for the company, and train end users on how to use them.
• Some of the most ground-breaking innovations arise from the introduction of new technology.
• IT should be aware of new and emerging technologies, the product’s applicability in the business context, and propagate knowledge of how those trends can benefit the organization.
Understand the tools and expertise available to IT to facilitate more than just technology innovations
Innovation process management, collaboration, analytics tools, and new technology expertise are the most important solutions for ideation.
Recognize how these technologies fit within the ideation process
Innovation Process Management
Analytics and BI
New Technology Expertise
Collaboration and Content Management Platforms
Prototyping
Filter Idea Into:IncrementalEvolutionary
TransformationalGenerate &
Assess IdeasScreen & Prototype
Concept
Select Concept & Create Business
Case
Frame & Investigate the
Problem
1. Ideation
The required level and complexity of these tools will be affected by your company's size, industry, and employee dispersion. For example, SMEs with centralized workforces may have less need for advanced collaboration platforms than large, dispersed organizations.
Required for optimal results
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Managing your idea pipeline is central to innovation success. Build or buy the tools to manage and mature ideas through the following practices.
Leverage Innovation Management Platforms and PPM technologies to facilitate ideation
Are you interested in learning more about Project Portfolio Management? For more information on PPM, PPM tools, use cases, and benefits, see Info-Tech’s Develop a Project Portfolio Management Strategy and related sets.
PPM and Innovation Management do not replace the need for quality management, they supplement it. Any organization that thinks it can manage an innovation portfolio well without well-managed projects is setting itself up for failure. Some solutions allow the creation of rules to prioritize projects based on certain metrics such as costs and business value. These tools can help separate ideas into innovation classes and delegate initiatives to teams, which are useful in the Innovation Governance Model.
Info-Tech Insight
Benefits of Project Portfolio Management and Innovation Management include:• Faster and more organized nurturing of innovation ideas
via pipeline and portfolio management.• Crowdsourcing best solutions to challenges.• Some innovation management tools allow customer
feedback and customer-to-customer feedback into innovation ideas.
Key considerations for PPM and Idea Management:• PPM and innovation management are processes not
tools. Tools can add to the success of these. • Success can only be realized if you align realistic goals
and processes with the appropriate supporting tools.
Unfortunately, all of the reports that we end up producing end up going to Excel and PowerPoint. You're having to take data from different places
and do an update every week. You take that update, reformat it, and reissue that to the
steering committee. It is a very time-consuming process.
Full BI benefits will only be achieved when it is part of user culture. It needs to be part of the day-to-day which is not achievable in separate or stand-alone
mode.– IT Manager, Agriculture
Leverage BI and analytics for more informed ideationBI and analytics are necessities for those who require data to make decisions. Build or buy analytics and BI tools around the following practices.
Decision makers require quality and up-to-date analytics in order to make the most informed decisions. Without it, decisions may be made more on instinct as opposed to hard facts, which can result in sub-optimal choices. There are two aspects for moving forward with analytics initiatives:1. How important is the data to making decisions?2. How quickly do decision makers need the data?
Info-Tech Insight
Are you interested in learning more about BI and analytics? for more information on BI tools, use cases, and benefits see Info-Tech’s Develop a BI Strategy and Deliver the BI Tools & Information Needed by Management.
Benefits of BI and analytics include:• Access to fast and insightful information throughout ideation
which is especially useful for making critical decisions.
Key considerations for BI and analytics:• IT should have a comprehensive understanding of what
business users require from the BI tool set by spending time with end users.
• Adoption is required, but it is not the ultimate measure of BI success. When BI is improving your business, people may not notice they are using it.
• Ensure BI users throughout the company are specifying variables the same way for accurate comparisons.
Before it took about eight or nine different queries with lots of cutting and pasting. This solution presents a one-click analysis with export to PDF or excel.
- IT Director, Financial Services Industry
IT implemented BI analytics for an accounting firm to facilitate innovation across departments
Industry:Segment:
Financial Services
Multiple BI applications were used across individual departments. It took manual efforts in eight different queries to retrieve potentially inaccurate information.
Cross-departmental analysis became difficult due to a lack of standard definitions of variables. Different divisions had very different representations of what should have been the same figures.
IT realized the problems and used this as an opportunity to innovate with business units.
SituationIT created a business case to facilitate a wide scale BI initiative to pull data from accounting and client information to perform analytics in a few clicks.
During the process, IT analysts and developers spent time with relevant business units to understand their daily processes and needs.
Business reports were generated from revenues (taken from client information) and expenses (taken from accounting), presenting an overall budget.
Resolution
Beta tests were very well received by business units. Business users could generate reports in a few clicks that previously would have taken two hours.
Benefits are seen in the form of:• Reduced labour costs: 2 hours
saved times appropriate salary• Increased productivity: 2 extra
hours to complete other tasks
IT anticipates this credibility increase in will create involvement in other business projects.
Results
Accounting
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Familiarize the enterprise with disruptive technologies to provide new perspectives for ideation
IT is in an evolutionary stage at this time. IT is now part of the
business process chain - but we need to move away from the traditional, ‘we control all’
mentality and move to a support and leadership position to help focus these new technologies
better. Employees are becoming very tech savvy - we need to help
them rather than hinder them.- Paul Haugan, CIO, Johnson County
Kansas Department of Technology and Innovation
Benefits of familiarizing the enterprise with disruptive technologies:• Organizations that invest in disruptive technologies realize higher
innovation ROI.• Employees are already using social, cloud, or mobile tools outside of
the workplace, therefore transitioning this into the workplace will be less strenuous.
Key considerations of disruptive technologies:• Employees are more tech savvy and are comfortable bringing in their
own devices or provisioning cloud services. They are doing things that IT has traditionally been in charge of, and are likely to make similar mistakes. Get IT involved to minimize these mistakes.
Understand the appropriate cloud, social, mobile, and big data tools around the following ideation practices.
Do not leverage these technologies to simply follow suit with trends. You must know what your end users want and would be most comfortable with, as well as what IT would be comfortable with. Start with corporate needs and see where these technologies can provide value.
“
Filter Idea Into:IncrementalEvolutionary
TransformationalGenerate & Assess
IdeasScreen & Prototype
ConceptSelect Concept & Create
Business CaseFrame & Investigate the Problem
Ideation
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Leverage collaboration tools for more effective communication and group efforts for ideationEnterprise collaboration is a necessity for knowledge workers. Build or buy the tools and enable collaboration around the following practices.
Collaborating around ideas is key to advancing them. However, discussions about innovation or innovation projects can actually be counterproductive if they do not refer to particular goals or strategies. Collaboration tools along with idea management tools can help put innovation ideas into the correct context and reduce the risk of counterproductive collaboration.
Info-Tech Insight
Are you interested in learning more about enterprise collaboration? For more information on collaboration pattern matching, tools, use cases, and benefits, see Info-Tech’s research Build an Enterprise Collaboration Strategy and related sets.
We’ve seen a real decrease in the time it takes users to connect with experts in our organization and share knowledge.
-IT Manager, Professional Services Firm
Benefits of collaboration include:• Breakdown of hierarchical barriers to improve
communication.• Identify subject matter experts.• Less time to communicate and collaborate than with
traditional methods (e.g. email).Key considerations for enterprise collaboration:• Understand how end users are currently collaborating
and consider how these can be improved upon. • Practice collaboration pattern matching to ensure end
users are being enabled with the appropriate tools.
Establish a framework for prototyping within IT, with business units, or for external customersUse prototyping to give shape to ideas in the following ideation practices.
Break idea into core assumptions and think about how to achieve the outcomes
Build a prototype that
tests the assumptions
Validate the prototype with a peer, obtain feedback, and
refine
Identify the core objectives or
outcomes of the product or service
For early service prototypes, a flow diagram of the customer’s experience or a user experience model can be created. For IT innovations, business units would be considered the customers.
For early product prototypes, drawing schematics or roughly constructing a form study model out of cheap material (fabric, paper, Lego, etc.) is appropriate at this stage.
Prototyping forms will depend upon the nature of the innovation.
1 2 3 4All prototyping construction follows this framework: Refinement
Iterations
• Allocate funding and build high-level concept prototypes for selected ideas.
• Analyze and validate issues, weaknesses, gaps, and opportunities with user stakeholders, and refine design.
• Cycle through refining prototype(s), building quick iterations as analysis reveals improvements and required adjustments, and then re-validate.
• Prioritize final prototypes and select candidates for execution.
Key Activities
Select prototype candidate
5
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Filter Idea Into:IncrementalEvolutionary
TransformationalGenerate & Assess
IdeasScreen & Prototype
ConceptSelect Concept & Create
Business CaseFrame & Investigate the Problem
Ideation
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Use Info-Tech’s Innovation Strategy and Mandate Workshop to position IT to facilitate innovationOur team will come on site with your company and tailor best practices to your unique needs and maximize your innovation success.
Our Innovation Workshop has one goal: provide clear, measurable improvements to your current Innovation Process.Each workshop is customized to the existing budgeting process maturity level and specifics of your company.
An overall diagnostic will be performed to identify process gaps and build commitment to the workshop. There will be a scoping discussion before each workshop that results in a customized agenda for the entire workshop.
We use the knowledge of your team and our Experienced Analysts to focus on critical performance issues and find cost-effective, high-impact solutions for quick implementation.
1. Explore Innovation2. Innovation Mandate and
Annual plan3. Business Issues,
Challenges, and Gaps4. Opportunities, Prioritization,
and Prototyping5. Presentation and Close
Modules
View our Innovation WCO website and speak with a member of our team!
• Understand the innovation ecosystem within your organization to best position IT to become a contributor to innovation.
• A balanced innovation portfolio is key to innovation success.• IT and the Business must be aligned in the way that they view innovation.• Risk aversion is a very large barrier to overcome with innovation.
• Ensure innovations within IT are aligned with the Business’ needs. • IT departments that provide business satisfaction through IT innovation
are more likely to see IT-enabled innovation success.• Examples can include server virtualization, VDI, or service tiering.
• Work with business units on innovation projects to prove IT can be an innovation contributor.
• Organizations with IT departments that helped the business achieve strategic goals were more likely to see IT-enabled innovation success.
• Complete or compete with cloud services to combat ShadowIT.
4. Facilitating Enterprise Innovation
Put the measures in place to evolve IT’s role to become an innovation facilitator. Earning the mandate to facilitate enterprise-wide innovation doesn’t instantly occur from helping a few business units innovate. The more experience gained innovating with business units, the more insights IT will earn into business pain points. Once the innovation mandate is earned, organizational innovations should flow through the implemented aspects of the Innovation Governance Model.
• IT is key to facilitating innovation through the Innovation Governance Model in their duties within the Innovation Support Group, the Innovation Advisory Group, and the Innovation Oversight Board.
• IT must provide the appropriate tools (collaboration, innovation management, analytics, etc.) to help nurture ideas through ideation.
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Bibliography
• "A Patent for a President.” United States Patent Office. Web. September 2011. <
• An Info-Tech Survey asked the following question:
◦ How much ROI had IT provided from the following initiatives? (Very Low ROI – 1 – 2 – 3 – 4 – 5 – 6 – Very High ROI)– Continuous small process, product, or service improvements.– Significant product/service development initiatives by building upon current capabilities.– Radically new way of doing things, leading to new market, product, or customer creation.
The success score was derived from the mean value given from each question stub. A success score between 0.00 and less than 0.50 denotes Low Innovation ROI. A success score between 0.50 and 1.00 denotes High Innovation ROI.
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Appendix – IT-Enabled Innovation Success Defined
• An Info-Tech Survey asked the following question:
◦ How successful has your IT department been with respect to the following? (1 = Very Unsuccessful - 2 - 3 - 4 - 5 - 6 = Very Successful)– Driving organizational process improvement.– Driving organizational product or service development.– Driving an increase in market share or revenue.– Supporting the penetration of new markets or customers bases.– Driving achievement of the business' strategic goals.– Achieving business satisfaction with IT innovation.
A success score between 0.00 and less than 0.50 denotes No IT-Enabled Innovation Success. A success score between 0.50 and 1.00 denotes IT Enabled Innovation Success.
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Appendix – Innovation Success1 Defined
• An Info-Tech Survey asked the following question:
◦ How well does your organization perform the following? (Very Poorly – 1 – 2 – 3 – 4 – 5 – 6 – Very Well)– Idea Generation.– Innovation Process Management.– Prototyping of ideas.– Screening of innovative ideas.– Execution of innovative ideas.– Generating a good financial return on innovation investment.
The success score was derived from the mean value taken from each question stub. A success score between 0.00 and less than 0.50 denotes No Innovation Success. A success score between 0.50 and 1.00 denotes Innovation Success.
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Appendix – Innovation Success2 Defined
• An Info-Tech Survey asked the following question:
◦ Please indicate your level of agreement with the following statements: (Completely Disagree – 1 – 2 – 3 – 4 – 5 – 6 – Completely Agree)– Without IT innovation, the business would be unable to meet its strategic objectives.– IT innovation drives new product or service development.– The business strategy relies on IT innovation.– The business expresses total satisfaction with IT’s ability to deliver innovation.– IT innovation drives the organization’s competitive advantage.– IT innovation has had a major, positive impact on organizational efficiency in the last 5 years.
The success score was derived from the mean value taken from each question stub. A success score between 0.00 and less than 0.50 denotes No Innovation Success. A success score between 0.50 and 1.00 denotes Innovation Success.
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Appendix –IT Services Defined
• An Info-Tech Survey asked the following questions:
◦ How well does IT enable the business in each of the following? (1 = Very Poorly – 2 – 3 – 4 – 5 – 6 = Very Well)– Ensuring business operations and service delivery do not fail.– Protecting corporate data from security breaches.– Managing corporate technology assets across the organization.
A success score was derived from the mean value taken from each question stub. A success score between 0.00 and less than 0.50 denotes No Basic IT Services. A success score between 0.50 and 1.00 denotes Basic IT Services.
◦ How well does IT enable the business in each of the following? (1 = Very Poorly – 2 – 3 – 4 – 5 – 6 = Very Well)– Working extensively with the business to roll out new products and services.– Providing the business with appropriate tools and analytics.– Improving the efficiency of business processes.– The success score was derived from the mean value taken from each question stub.
A success score between 0.50 and 1.00 denotes Advanced IT Services.
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Appendix – Idea and Innovation Management Solutions
brainbankinc.com
hypeinnovation.com
ideascale.com
spigit.com
• Product: Idealink OpenTM
• Idea acceleration features• Idea organization and prioritization• Pipeline management
• Idea maturity tracking through a process• Customizable valuation criteria• Community idea graduation and crowd sourcing
• Gamification system of earning points for participating• Idea maturing features
• Crowd sourcing • Idea collaboration and analysis• Game mechanics
Blockbuster. This video-rental chain survived the transition from VHS to DVD just fine—but then failed to adapt to the next big change. Blockbuster remained flat-footed when Netflix started sending videos through the mail, cable and phone companies started offering video-on-demand, and Redbox started renting videos for a buck a night through vending machines. Now that video streams through computers and phones, Blockbuster's conventional retail outlets seem hopelessly outdated. The firm is closing hundreds of stores, working off debt, and copying some of its competitors' moves, with a fighting chance to catch up. But it's now chasing its industry instead of leading it.
Eastman Kodak. For nearly a century, no company commercialized the camera as successfully as Kodak, whose breakthroughs included the Brownie camera in 1900, Kodachrome color film, the handheld movie camera, and the easy-load Instamatic camera. But Kodak's storied run began to end with the advent of digital photography and all the printers, software, file sharing, and third-party apps that Kodak has mostly missed out on. Since the late 1980s, Kodak has tried to expand into pharmaceuticals, memory chips, healthcare imaging, document management, and many other fields, but the magic has never returned. Its stock price is now about 96 percent below the peak it hit in 1997.
Yahoo. When Web search and aggregation were still virgin territory, the pioneering Yahoo tried to charge for services like email and file sharing, while upstart Google offered everything for free. Customers flocked to Google, which surged to a commanding lead in search that it still holds. Yahoo still grew into a huge Web portal, with strong sports, financial, and news coverage that generates billions in advertising revenue, but it also drifted into job-hunting services, video streaming, original entertainment, and other ventures it has since sold or folded. And Yahoo's snub of a $45 billion buyout offer from Microsoft in 2008 now looks like a huge gaffe, since Yahoo's market value has fallen to a scant $19 billion or so. CEO Carol Bartz arrived in 2009 with a mandate to clarify the company's focus and amp up profitability. One of her first moves: a partnership with old suitor Microsoft meant to increase revenue for both firms without the tension of a buyout.
