A New Focus: The Innovation Imperative

A New Focus: The Innovation Imperative

When asked: What impact do you expect IT to have in 2006? CIOs ranked improved external customer satisfaction second, after reduced business costs through efficiency and increased productivity

You still need to keep your eye on the cost-control ball, but the good news is that CEOs expect CIOs to drive business innovation with technology.

Whatever the prevailing environment, Sunland Group has been on an "IT purchasing adventure" over the past three years. CIO at the property development and construction professional services organization Brian Dumca says in the face of atypically rapid growth, Sunland has been buying servers, desktops, laptops and communications services to foster rapid expansion into interstate areas, new branch offices and arms of the business. Innovation has had a high priority.

For instance Sunland equipped the world's tallest residential apartment building Q1, completed on the Gold Coast last year, with a network on par with any urban business centre. Queensland-based integrator Data FX fitted each of the tower's 526 apartments with high-speed synchronous broadband.

"With our showpiece development we've used technology in the building to enhance the value of the property," Dumca says. "It's quite an innovative piece of technology, and we've had some good coverage globally promoting it."

Sunland may have been before the curve, but results from The State of the CIO 2006 survey show there are signs other Australian businesses are starting to attach new urgency to the innovation imperative. Increasingly, CIOs and their CEOs view IT's role as strategic and a source of real value and competitive advantage for the organization. Although reining in costs remains an issue, for the first time in years CIOs are giving fresh impetus to efforts to achieve competitive advantage and accelerate business growth, after the recent painful years of consolidation. Much of that new thirst for innovation for competitive advantage involves the customer area.

When asked: What impact do you expect IT to have in 2006?, CIOs ranked improved external customer satisfaction second, after reduced business costs through efficiency and increased productivity. And they expect IT to enable and drive business innovation too: this item made it into the third-ranked spot, just before create or enable competitive advantage.

Further, CIOs have a new clarity about the primary goals of their company's customer efforts, seeing attracting new customers to expand revenue as their most important goal, the CIO survey reveals. Enhancing the customer experience to increase retention also receives high billing, followed by increasing customer self-service to reduce costs. Other areas of focus for CIOs include: better understanding what customers want or need to increase per-customer sales, segmenting the customer base to focus more on highest value customer (see "How to Do Customer Segmentation Right", page 84) and integrating operations to cross sell.

"Satisfying a customer is not good enough anymore," says St.George Bank CIO John Loebenstein. "There's a lot of market research that says that delighted customers become advocates and customers who are advocates stay with the company, buy more and recommend you to people." That means organizations must measure not only customer satisfaction but the numbers of customers, and especially staff, who become advocates, he says.

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