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The Innovation Wave: Ride It or Perish

The Innovation Wave: Ride It or Perish

IT innovation may have taken a three-year breather, but CIOs have plenty of unfinished business. They need to go back on the offensive, pursuing more and better ways to drive revenue.

When global consultant, system integrator and outsourcer CSC exposed the uneasy connections between IS and the rest of the business in "CEOs are from Mars, CIOs are from Pluto" in 2002 (CIO March 2002), the revelation that the personal relationship between CIO and CEO is always important, usually broken and generally hard to fix, garnered a flurry of attention. But buried in the bowels of the report was another deeply disturbing finding: that 40 percent of CIOs can expect to be sacked - not because they fail to deliver cost-effective IT, but because they cannot contribute to business strategy, effectively communicate with top executives on a peer-to-peer level or ultimately prove their mettle as change agents.

"This came as a shock [to CIOs], because many of them thought that their job in life was simply to deliver an efficient IT service," says managing director of CSC Research & Advisory Services Alex Mayall.

No such luck. With growth once again on the agenda, the pendulum is swinging back towards IT innovation and progress some four years after the bursting of the Internet bubble pushed directors in the opposite direction. Businesses are looking for new sources of innovation, and they are expecting CIOs to play a major role in delivering it. Innovation is on every agenda as business investment ramps up.

And while IT innovation has been on its sabbatical, it has been gifting CIOs a legacy of unfinished business. In its "Predicts 2004", issued in November last year, Gartner forecast that although the focus on cost would not disappear during the next 36 months, an imperative for innovation and value-add will lead to new opportunities and challenges in the IT services arena. That was backed up by a recent Gartner EXP survey, which found in an environment of severe cost pressures, business is demanding IT executives clarify business and technology trade-offs and ensure faster innovation.

Yet organizations are struggling. An August 2003 report from IT research firm Forrester found less than 20 percent of business executives characterize their IT organizations as innovative and warned it was up to CIOs to break the stereotype. "The CIO must charter a company-wide innovation team to find, fund and track innovative business investments - while keeping in regular communication with business unit execs," analyst Julie Meringer wrote.

So technology innovation is tipped to pick up as CIOs go back on the offensive, pursuing more and better ways to drive revenue. But businesses today want more - much more. And one of the things they want is CIOs able to contribute actively to improving their organization's total innovation performance. In that context, Mayall insists the CIO remit is changing from being reactive, and therefore a mere provider of services, to becoming proactive, and energetically leading innovation efforts within their organizations.

The new expectations can be seen in a list of attributes that CEOs require of today's CIOs, derived from a presentation to a CSC conference event last year by a partner from executive recruitment firm Whitehead Mann:

  • openness, integrity, commercial awareness, keen intellect
  • relevance, flexibility, track record
  • potential to add value to the business
  • leadership, energy, creativity, proactivity, passion
  • gravitas
  • insight and action in equal proportions
  • change management propensity
  • vision - and the ability to champion innovation.

Fortunately a CSC position paper, "The CIO's Role in Accelerating Business Innovation" by Bettina von Stamm and David Moschella shows clearly that CIOs are fundamentally well positioned to support innovation as long as they can overcome IT stereotypes and avoid following the herd, and that - if they play their cards right - the acronym CIO might just as well stand for Chief Innovation Officer.

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