Innovation is increasingly happening outside of IT.

It’s of little wonder that, after so many years focused on enterprise applications and systems of record, CIOs and IT organizations measure their ‘smartness’ or innovative prowess based on the technical ability to deliver or fix something that’s considered inherently complex. However, every day we’re seeing that technology led business innovations don’t have to be technically complex to be successful. Far from it.

Furthermore, innovation (or taking a good idea and making it possible) is increasingly happening outside of traditional IT. That is, with the actual employees, customers, and even citizens. Many of the most promising emerging disruptive business models are those that simply and elegantly leverage societal and behavioral dynamics emerging globally, in conjunction with the mass adoption of mobile devices, social media and ubiquitous computing. Power to the people!

One enormous problem faced by IT leadership teams working to deliver business innovation is the restrictions imposed by the complexity of technologies acquired over the last 30 years to support what are now outdated methods of customer engagement. Not only that, there are new dynamics that could have far greater business consequences if not jointly considered and immediately addressed.

"Investments should be made in technologies and applications that help customers and citizens interact directly with the organization at the exact point in time decisions are made."

 

Innovative CIOs must look beyond what’s achievable with technology today and consider many factors that affect the success of their business, especially those that help improve engagement with customers (increasingly from a smartphone, tablet or other mobile device).

Innovative CIOs understand that:

  • Behavioral dynamics of a younger and more connected and technically savvy workforce can actually benefit the organization. Rather than impose more restrictive processes that are counter to the collaborative benefits of a workforce far more schooled in social everything and gadgetry, progressive CIOs and IT teams work to eliminate the ‘not invented here’ syndrome and partner across the business – especially in areas where smart Gen Y thinking collides with technology, like in digital marketing and new product development.
  • Investments should be made in technologies and applications that help customers and citizens interact directly with the organization at the exact point in time decisions are made. In a retail context this could mean a customer scanning groceries with a mobile device and being immediately presented with a quick and easy recipe, or broadening citizen engagement by allowing residents to report street hazards. Simple innovations yes, but examples where CIOs are recognizing and proactively addressing the fundamental power shift (from process to people) and how IT service delivery must be re-architected.

Build IT smartness into products and services to extend your value proposition

Today the application of sensors or micro-transmitters costing less than a dollar have the potential to deliver more innovation and business value than the million dollar data center hosting your ERP system. That’s because your customers are increasingly judging your business on how they can engage directly with your product or service to improve their daily lives – be it losing weight and getting healthy, consuming less energy in the home, or safely parking the car - every time. Innovative CIOs understand this and are moving well beyond being the traditional gatekeeper of the data center. Working with their business peers, they’re exploring the potential for building smartness into their products - even recognizing that technologies like wireless, API’s and mobile apps can become extensions to the products themselves. And, they don’t even have to be built by internal development teams.

Help the business let go and collaborate – then everyone will have a better future

Without a doubt, superior forms of people engagement are the future of technology-driven business innovation and should be top-of-mind for all CIOs today. To gain an innovative edge, however, CIOs need to consider dynamics beyond the technical: societal changes, consumer demographic behaviors and economic shifts. 

For example, in many situations today, the once traditional consumer who bought your goods for their own exclusive use may now be willing to share them with someone else (shock, horror!).  What’s more, population growth, a new emerging middle class (who are more accustomed to sharing) and of course finite resources, are forcing many businesses to reconsider traditional business models and embrace more collaborative style economics.  For example some luxury automotive manufactures are renting high-end cars, while major hospitality chains are tapping into a new marketplace of room-sharing ventures, offering their brand and services in return for a percentage of the new business.

In situations like these that are highly disruptive, CIOs can play a dual role.

  1. Advise the business about how new technologies may help accelerate the adoption of new business models – especially those like social computing, which enable easy sharing of information. Or mobile apps and APIs, which could significantly extend the value of a product through an ecosystem of additional services.
  2. Play a scouting role. Innovative CIOs can constantly alert their business peers about emerging new business models that have the potential to disrupt their own markets. They can challenge the company’s traditional captive market thinking and revenue ‘protectionism’ and help their business peers recognize the opportunities from disruption, and the technology innovations that must be adopted to gain first mover advantage.

Remember - good relationships can be broken in a second, however innovative the technology

For many businesses, it has taken years to build up a large and loyal customer base. But now, loyalties are tested when customers can’t effectively engage with your business whenever, wherever and however they want to. Technologies enable this, of course, but they can also contribute to business failure if the CIO doesn’t factor in what can be termed “innovation side-effects.” This can include being poorly prepared technologically and organizationally for the increased business volume, or persisting with outdated architecture and development processes that are not aligned with the new, dynamic people-centric applications and services.

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