"Information technology is increasingly the engine that drives innovation, and IT can enhance the value of products and services through innovative procedures."
IT Innovation Management
- Today’s CIOs need to do more than just save their companies’ money. Information technology is increasingly the engine that drives innovation, and IT can enhance the value of products and services through innovative procedures. CIOs can use those innovations to renew their IT function and make a strategic contribution to the business at the same time.
Three key questions
As a guide through the process of introducing systematic innovation management in their companies, CIOs should ask themselves the following questions:
- Question 1: What is the current situation?
Companies and their IT functions have often reached different levels of maturity with regard to the systematic management of innovation. An “innovation audit” can help reveal the company’s strengths and weaknesses. It forms the basis for a more considered approach to innovation within the company.
During this stock-taking exercise, CIOs should examine the following factors:
- Innovation culture within IT
- Organizational anchoring of IT innovation management
- Consistent processes
- Tools and evaluation models
- Current IT innovation portfolio
- Zoom Stages of maturity in innovation management
An audit often reveals that innovation management occurs on an ad hoc rather than a systematic basis within the IT function. Alternatively, companies plan and implement innovations systematically on a local basis but are not able to disseminate this knowledge across the firm.
Companies should set themselves a clear goal: not just to coordinate their innovation activities across the entire firm but to integrate these activities into other steering processes within the company. For this to be possible, the global innovation portfolio must form part of the corporate and IT strategies.
Question 2: How can I shape innovation within the firm?
The innovation process within companies comprises a number of phases, each with their own goals, procedures and tools. The three most important are:
- Generating ideas
- From idea to concept
- From concept to market
The company must structure its different sources of innovation so that a large pool of new ideas emerges, for example through analyst reports and sales workshops. Many firms design an “IT innovation radar” that allows them to continuously evaluate new technology by segment, stage of development, and attractiveness. Then these ideas are analyzed, prioritized, and developed. Firms should use evaluation models that look at the strategic benefits and risks—as well as the financial implications. Finally, the company should implement the innovation concept and bring it to market as quickly as possible.
In practice, companies in the IT and internet industry in particular have shown that ideas can be brought to market quicker by using early beta versions. Here, it is particularly important that the company gets end customers and users involved, for example in usability testing. This approach can help avoid nasty surprises during product launch, and hence unnecessary extra costs.
Question 3: How can I anchor innovation management in the company's structures?
As well as ensuring IT innovations are introduced effectively, IT innovation management must ensure that the innovations are properly anchored within the organization. Four different models are found here, each with its own pros and cons. Companies need to weigh them up carefully in the light of their specific situation and the firm’s structure.
For example, if it is important for the IT innovations to be fully integrated into the rest of the business, then the company is probably best off bundling responsibility for innovation across different functions. However, if the firm wants to implement innovations quickly, then ideally it should combine responsibility for generating and implementing ideas in a single function. Or if the company is planning a step change, setting up a dedicated “innovation factory” (e.g. a think tank) could well be the most effective solution.
Innovation means different things to different companies, and depends on the requirements of the business and the corporate strategy. To lay the foundation for systematic, sustainable IT innovation management, companies must first carry out a full audit of the current situation in the company, from the innovation culture and anchoring of innovation within the organization, to specific processes and tools.
This seven-point checklist for systematic innovation management will guide you through the necessary steps:
- Create a balanced innovation portfolio (areas, maturity, markets).
- Establish standards and processes so that good ideas don’t get lost.
- Give staff the right tools—the key to turning good ideas into market successes.
- Get them excited about innovation—a culture of innovation forms the basis of an innovative firm.
- Assess the company’s position regularly—compare it with the best in the industry.
- Employ systematic knowledge management.
- Ensure the support of the board—innovation is a matter for top management.
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