Getting the Magic Out of IT
Loosely defined as “introducing something new or different,” innovation is fundamental to many IT projects, especially those that involve developing new technologies, new methods, or new business processes. However, innovation remains an elusive concept to many CIOs, who spend more time keeping existing systems working than they do deploying something new.
In April 2012, the Economist Intelligence Unit conducted a global survey of 226 senior executives to identify fundamental strategies and procedures that can help promote business-led innovation.1 The survey considered the experiences in a range of industries, geographies, and company sizes.
According to this comprehensive survey, global companies that are “furthest along the innovation path” have put in place processes or cultural norms to foster good ideas and implement them quickly. By monitoring and analyzing how initiatives develop, these firms spot trends and create opportunities for innovation. They also have systems in place to learn from failed projects, based on the philosophy that collecting many ideas is the first step to identifying great ideas.
While the survey respondents said big data and social media offered the greatest opportunity for company innovation, executives admitted to a lack of knowledge of how best to leverage these technologies. Only 15 percent of executives surveyed said they felt unhindered in embracing these technology trends. According to more than half of respondents, the predominant role of their IT department is to implement, rather than generate, innovation.2
Increasingly, today’s CIOs are called on to perform both the innovation and the maintenance roles. “People in an organization expect the CIO to know all about chips, servers, and industry standards. But they also expect them to know a lot about supply chains, days sales outstanding, days payable outstanding, and integrated views of the workforce,” explained Oracle President Mark Hurd in a recent Profit interview. “IT is all about the alignment of business strategies, models, processes, and enterprise technology. Any CIO can do a great job managing the IT infrastructure, but if you can’t align those higher-order business processes and the strategy of the business, you don’t get the true magic out of IT.”3
Innovation was the prevailing theme at Oracle’s 2012 Executive Edge Summit, where hundreds of CIOs gathered to discuss the impact of innovative and disruptive technologies. During one panel discussion, Jaime Montemayor, CIO at Frito-Lay, described an innovation agenda that leverages big data analytics, mobility, social media, and collaboration.
Leap Wireless CIO Robert Strickland, who also took the stage at Oracle’s Executive Edge Summit, discussed pervasive changes at Cricket Communications, a subsidiary of Leap Wireless that provides wireless services to approximately 5.6 million customers in the United States.
Cricket’s entire business model is based on value innovation. The company offers nationwide wireless voice and mobile data services with no long-term contracts over high quality, all-digital 4G LTE and 3G CDMA wireless networks.
In May 2012, Cricket became the first no-contract wireless provider to offer Apple iPhone, a breakthrough for mobile subscribes across the U.S. Cricket also created a breakthrough music platform called Muve Music that allows customers to download unlimited music straight to their phones as part of their regular monthly rate plan, avoiding the per-song charges associated with many music services.
“You can still access what you want when you want it, and it’s a great disruptive platform that makes the Cricket customer more sticky,” Strickland said, pointing out that Muve Music customers are less likely to change phones.
For these and other CIO-driven projects, the pace of change incites companies to innovate more quickly, as traditional 18-month lifecycles are compressed into three to six months—often encouraging customer feedback as part of an open dialogue.
“Before, we were of the notion that you had to have it perfect. Today, it’s more a ‘close enough is good enough and good enough is close enough’ mentality, and that carries the day,” said Strickland.
GE applied this philosophy when it rolled out an internal social network called Collab, an internal social network designed to improve knowledge sharing among GE’s 300,000 employees. Collab borrows ideas from Facebook, Twitter, and other popular sites and applies them to a business setting.
“Too many people in IT wait until everything is 100 percent complete before they launch it,” said Ron Utterbeck, CIO at GE. “‘Good enough’ is a great starting point for a product lifecycle, and Google has helped make everyone comfortable with a beta tag. It’s time to move toward becoming a risk-taking organization. People are a bit more experimental with technology than they used to be.”
While creating Collab, Utterbeck and his team knew generally where they wanted the network to go and what features they should add. In January 2012, they launched it to a test group of employees to gather feedback and encourage uptake. Within nine months they had 100,000 knowledge workers on board.
“Word started to get out and people started to try it,” Utterbeck recalled. “That allowed the network to grow virally and by word of mouth. It ended up changing the paradigm. People would receive an e-mail that someone was ‘following’ them, and they would log on to find out why.”
Collab allows people to network across geography, age, role, and function to share knowledge. One in three connections on the service are with people from different functions, and one in four are between people in different countries.
“What you typically see on Facebook is that groups stick together,” Utterbeck explains. “In a business setting, you want people to work across age and geography and business function, no matter what generation they are from.”
For example, an IT employee in California who needs to work with a compliance officer in Bangalore can essentially crowd-source an answer across multiple different functions. GE also created a file-sharing program that allows people to provide context for the files that they store or post. This technique allows the files to continue to evolve instead of languishing or being forgotten.
Clearly, broad opportunities await companies that fully embrace innovation and capitalize on talent within the IT department. Educating business leaders about new technology trends, enabling business units to adapt processes rapidly, and locating pockets of innovation within the enterprise are proven ways for CIOs to help spur business innovation.
Mark Hurd, a keynote speaker at the CIO Summit, admits that CIOs face a tough road on the journey to bridge the technology world and the business world. Yet the CIOs who took the stage universally embraced these challenges.
“It’s a great time to be in IT and to lead business growth with technology,” Strickland summed up. “There’s a new generation that respects what we do, and I think we’re going to be seen more as the moneymakers that we are. Individual rate of return can’t be a concern when it comes to developing disruptive technology. These projects don’t always pay off quickly, but they are vital nonetheless.”
David Baum is a freelance business writer and marketing consultant with 25 years of experience covering the high-tech industry.
1“Cultivating Business-Led Innovation,” an Economist Intelligence Unit report, sponsored by Oracle.
2Economist Intelligence Unit, op. cit.
3“The Road Ahead,” February 2012.