It Innovation: Reinvent It for the Digital Age
By Pearl Zhu
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About this ebook
The purpose of “IT innovation - Reinvent IT for the Digital Age” is to help business and IT leaders and digital professionals ride above the learning curve, reinvent IT as an innovation hub and game changer; reimagine IT as an innovation outlier; renovate a hybrid IT and digital organization; fine-tune IT as the digital whole brain of the organization; accelerate IT on the fast lane, rebuild IT as the business capability multiplier; empower IT as a digital change agent; and leverage the “alphabetic elements” to run a highly innovative IT organization for the digital age.
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It Innovation - Pearl Zhu
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Introduction
The industrial-based enterprise of the 20th century had run out of gas, and the digital enterprise of the 21st century has the new characteristics and DNA of innovation.
Figure 1 Unpuzzling IT Innovation Management
Due to the exponential growth of information, changing nature of technology, and continuous disruptions of digitalization nowadays, CIOs seem to be always at hot seat, and the saying about the demise of the internal IT has been around for years. In reality, the majority of IT organizations get stuck in the lower level of maturity, slow to change. Forward-looking organizations are reinventing IT reputation from a cost center to a value creator, from a static support function to a dynamic change agent; and from inside-out operation driven to outside-in customer-centric. IT is omnipresent and permeated into every corner of the organization. The industrial-based enterprise of the 20th century had run out of gas, and the digital enterprise of the 21st century has the new characteristics and DNA of innovation. Nowadays we are living in an information abundant world where technology is pervasive and the masses are looking for their own experiences to introduce new technology into the business. There are both incremental innovation and radical innovation. IT is often the driving force for both. IT plays a significant role in managing information-knowledge-insight cycle and fostering innovation by leveraging disruptive technologies and enriched information flow. But more specifically, how can IT build differentiated capabilities to become an information power center and an innovation hub?
The purpose of "IT innovation - Reinvent IT for the Digital Age is to help business and IT leaders and digital professionals ride above the learning curve, reinvent IT as an innovation hub and game changer; reimagine IT as an innovation outlier; renovate a hybrid IT and digital organization; fine-tune IT as the digital whole brain of the organization; accelerate IT on the fast lane, rebuild IT as the business capability multiplier; empower IT as a digital change agent; and leverage the
alphabetic elements" to run a highly innovative IT organization for the digital age.
Chapter 1 Reinvent IT as an innovation game changer: An innovative and value-driven IT organization needs to understand stakeholders’ expectations and propose an innovation solution portfolio that corresponds to both demand and cost drivers with a focus on business priority, and improve the overall business effectiveness, agility, and maturity.
Chapter 2 Reimagine IT as an innovational outlier: Visionary CIOs are often outliers who can step out of a conventional thinking box or linear patterns, to envision the future, help their organizations ride above the latest technology trend and leverage information for catching the new growth opportunity and delighting customers.
Chapter 3 Renovate a hybrid IT and digital organization: Running a hybrid IT organization is about taking balance as a management philosophy. In order to make a solid digital transformation, there are many seemly paradoxical, but indeed coherent elements in running a high-effective IT organization today. IT should combine the next practices and the best practices, strike the right balance of traditional hierarchy and flatter structure; keep the lights on, and
doing more with innovation" management practices.
Chapter 4 Fine-tune IT as the digital whole brain
of the organization: Because IT is the steward to manage business information, it is like the business’s nervous system to ensure the right information getting to the right people at the right time to make the right decisions. Digital IT needs to be the Whole Brain
of the business. Be rational as the left side of the brain,
and be creative as the right side of the brain.
Chapter 5 Accelerate IT on the fast lane: IT plays a pivotal role in driving changes and leading the digital transformation, focus on the fastest speed available, because that is where the main threat to competitiveness. To speed up, IT needs to become an innovation engine of the business, as well as a business enabler to catalyze growth and improve organizational agility.
Chapter 6 Rebuild IT as business capability multiplier: A highly capable IT organization is a business capability multiplier. IT is not just the sum of services or processes, but an enabler of business capabilities which can weave all necessary elements of the business into strategic capabilities and unique competencies of the organization.
Chapter 7 Empower IT as digital Change Agent: Change becomes a dynamic business capability in which IT is the key enabler. IT is not only the superglue but also an integrator to weave all important change elements seamlessly and make people change, process change, and technology change sustainable.
Chapter 8 Run a highly innovative digital-ready IT organization: IT is the business, to unleash the digital potential of IT, organizations need to understand that IT is not just technical or scientific, but also artistic and delightful. At the dawn of the Digital Era, IT needs to become a strategic partner of the business, to unleash the full digital potential of the entire organization.
Chapter 9: The alphabetic elements in digital innovation and IT maturity: A Digital-ready IT organization is a threshold competency of the organization, it is an enabler of business digital capability, goes beyond IT-business alignment, and move up to integration and engagement stage. IT can weave all necessary business elements, from A to Z, either hard or soft, to manage innovation and orchestrate a digital symphony.
Innovation is more about true knowledge acquisition first. Because if the organization has got that knowledge, it could accomplish a lot with less, and do more with innovation, and it could also use less than that 80% to achieve more than what it has today. IT needs also to ride above the learning curve, to fostering business innovation via leveraging disruptive technologies. Being able to become innovative or close is being able to think, and create new things based on its own needs; true knowledge is the optimal solution. To catalyze innovation, IT needs to ensure the business strategy allowing for digital speed, If you can innovate across the business, regardless of which function you are involved in, be it IT, HR, Finance etc., then you can surely change the shape of what you deliver, not just how it’s delivered.
Innovative IT can only happen if IT is regarded as a partner and given the role in catalyzing innovation and driving the business. However, the us vs. them
mentality is often still alive in the management team within the organization. To ensure the business as a whole is superior to the sum of pieces, the business leaders and managers have to overcome silo thinking and empower IT leaders to manage information across functional borders and unleash the full potential of digital businesses. With the changing role of IT in a world that is increasingly more people-centric from a technology perspective, it is imperative that the CIO is a visionary as well. The role of the CIO should be able to envision not only where a company believes it is going, but how it will get there, and how it might be missing out on opportunities because of limitations on understanding. More specifically, the understanding of what technology can help companies achieve. Everyone in the leadership team has a gift and the future business is very complex. Business models and technologies are changing very rapidly. There is no single person who is able to deal with these complexities and speed. Team Leadership
is able to build the future business and IT vision and, more importantly, to react very quickly.
Chapter 1 Reinvent IT as an Innovation Hub
IT continues to grow in importance to organizations, both operationally and as a competitive advantage.
There is no one size fits all formula to run a highly effective and highly innovative IT organization. Because, different IT organizations and the enterprise as a whole are at the different stage of the business maturity. Running IT as an innovation hub means IT can be used as a tool, enabler, catalyzer, and a digital platform to orchestrate change and facilitate idea creation and implementation, meet the ultimate goal of an organization’s short/medium/long-term strategic plans. The CIO is both an artist and a technologist - in brilliantly imagining the IT vision and business models of tomorrow while architecting the ability to succeed in the missions and business models of today. Do they need to take a critical look at IT, on which the following stage is your IT organization? CIOs need, to be honest with yourself about assessing the strengths and weaknesses of IT organization. Then you should validate your observations by seeking input from your customers, with the goal on how to reinvent IT and improve its effectiveness, agility, and maturity?
Figure 2 Five Stages of IT Organization Maturity
• Order taker: The majority of IT organizations still run in a static industrial mode -built to last,
not designed to change.
All too often, IT acts like an order taker, overloaded and understaffed; many businesses still view IT exclusively as a cost center. If the business doesn’t view IT as being on the same level, they won’t properly communicate or align with the IT department. More often, this comes down to the business feeling that IT can’t keep up with their demand for new services, in other words, that IT isn’t as agile, flexible and innovative as it needs to be. Most of the CIOs today don’t seem to be business strategists. CIOs are always in supporting roles and they don’t have the same level of power and control to directly influence executive decision-making. In fact, they should have much more influence and power in an organization than they know as they provide technology backbone to the entire business. Many CIOs consider IT organization as a separate entity that support
other business units and do not consider themselves as an integral part of the company so they keep asking for empowerment and influence. If your IT organization is still perceived as an order taker only by businesses and customers, it means IT gets stuck on the lower level of maturity, running in a reactive mode, operation driven as a support center.
• Service provider: Many IT organizations also run as a commodity IT service provider, they don’t challenge the best practices which were perhaps not so best due to the increasing speed of changes, or keep we always do things like that
mentality. They are risk-averse and don’t want to take on initiatives that will create more work or issues for them, with don’t fix it until it breaks
mode. Nowadays with emergent on-demand service and IT consumerization trend, if IT can’t provide differentiated solutions, businesses will bypass IT and order those commoditized services from third-party vendors easily. Therefore, in order to keep internal IT organization competitive and differentiated, an effective CIO’s job is to improve operations to reduce the burden on the company while trying to stay current with ever-changing technologies. That includes reducing costs, improving systems, streamlining processes, managing risks, and providing continually expanding niche services for the business.
• Business solutionary: IT continues to grow in importance to organizations, both operationally and as a competitive advantage, IT needs to clearly define its role as a value creator and business solutionary. IT leaders should consider themselves business professionals with in-depth T-shaped knowledge in the IT area. CIOs need to spend the time to understand the business issues enough to push back on what they asked for and explain how alternatives can provide more value. This is extremely difficult to do without spending significant time learning the business. Whatever business you are in, take the time to really learn that business or you will always just be the IT guy or gal, and never be part of the top leadership team making strategic level decisions. The business wants fit-for-purpose IT solutions that enable them to be efficient in delivering services and products to end customers at the right cost and to make profits to the shareholders. IT should focus on delivering high quality, reusable, consistent solutions to fit for the businesses needs in a cost-effective manner over the long term. The fit-for-purpose means the right foundation of functional building blocks, with all the common non-functional ‘abilities’ (availability, reliability, scalability, reconfigurability, interoperability, elasticity, security, etc) at an acceptable cost.
• Strategic partner: IT has a very strong impact on the flow of the operation because the information is the lifeblood of businesses nowadays, it is not being singled out, it is being concurrent with senior management. IT organization has to move from a reactive order taker and back-office support function to a strategic partner and business catalyst. In order to be a strategic business partner, the CIO must have a seat at the table
and a voice to holistically advise on strategic business discussions and decisions, transform IT into rule co-maker. It means having IT and business collaborate as equal partners so that strategies, organizations, people, processes, projects, etc, work in harmony, such that initiatives, especially those focused on leveraging IT to increase revenues are successful. The more important thing is to work on the activities and considerations that need to be addressed to enhance IT-business relationship and help organizations become agiler and proactively adapt to the changes, moving up from efficiency, effectiveness to agility and innovativeness; from functioning to firmness to delight. This collaboration entails effective communication, value analytics, partnership, technology scope, people skills, and governance discipline. All these need to be effective to have mature alignment and proactive participation, and that organizations with higher and stronger maturity outperform organizations with lower maturity.
• Innovation game changer: IT can become known as an innovation engine by helping the business develop innovative next products/services or delighting customers, and become the revenue rainmaker by associating its efforts directly with sources of income. You are able to spot the opportunities to increase revenues. Looking for solutions which will directly benefit the external end customer will improve the competitive advantage and in-turn bring in increased revenue. CIOs need to become business leaders to work within IT and across the business scope and seek ways to grow revenues, profitability and spur innovation. That’s a completely different mindset than managing technology only. Leadership towards true value creation for any organization will come from the willingness of its leaders to knock down the barriers separating insulated IT teams and the revenue generating business ownership teams. Unless IT understands the needs of its internal and external customers, it will be unable and possibly unwilling to develop system and process differentiation that leads to the kind of competitive advantage, that will propel the organization’s growth and profitability.
It’s important for IT leaders to create a comprehensive list of the IT organization’s strengths, weaknesses, goals, and Digital IT is a paradigm shift in role, responsibility, and attitude. Your goals and objectives will be your drivers. Your strengths and weaknesses will be your constraints, strengthen your strength, and improve your weakness, in order to move up the maturity level of IT from reactive to proactive mode, from a service provider to a business solutionary, from an order take to the strategic partner of the business, and from a cost center to an innovative rain-maker.
1 Closing Three Gaps to Run Innovative IT
Innovation becomes simply creating value by solving simple or complex problems.
Figure 3 Bridging Gaps between IT and business
Digital CIOs have many personas indicated in the I
of the CIO title, Chief Innovation Officer
is one of the most pertinent roles they need to fulfill, Because more often than not, technology is the disruptive force of innovation, and information is the very clue to developing the next and best products or services, as well as delighting customers. Great CIOs with their finger on the pulse of technological advancement or information insight can provide many ideas on how new technology and abundance of information can create fresh new opportunities. The point is: What are innovation gaps organizations need to bridge, how can a CIO build a solid innovation agenda, and play such a digital role more effectively?
• Idea gaps: Innovation becomes simply creating value by solving simple or complex problems.
It’s the state of mind to think and do things from a new angle, and it’s the business unique capability to gain a competitive advantage in the face of hyper-fierce competition and business dynamic. If there is an idea gap, it means the root cause of the gap may have something to do with corporate cultures. An adaptive culture makes innovation and improvement easier, it’s easier to collect, facilitate, and manage ideas more optimally. Also, if you get the culture right, then people feel they have the freedom to try and even to fail. There are many forms of innovation: technology, application, product, design, business model, process, communication, customer experience, etc. If you develop the right culture, through the effective change management if necessary, and then everything else can be connected. The cause of idea gap is also about the talent gap. The heterogeneous team with cognitive differences is more innovative than the homogeneous group setting. With building a culture of innovation and risk tolerance, people are more open to trying new things and share thoughts and ideas fearlessly, so the fountain of ideas can flow effortlessly.
• Process gap: Innovation is not serendipity; it takes a systematic approach with robust, but not overly rigid processes to implement it. When the ideas have been developed or when they are able to be applied to meet a short-term objective, then they should be pushed through an efficient execution process. The agile innovation processes and efficient tools enable the idea flow of generation, brainstorming, contribution, evaluation, selection, and innovation execution stays totally connected. More organizations look for integration with portfolio management tools to ensure the ideas go straight from the systems into specialized tools to help manage the portfolio of potential projects, set the right priority, and leverage time and resource for improving the success rate of innovation.
• Innovation execution gap: Even you have ample innovative ideas, it doesn’t guarantee innovation success due to the possible execution gap. Bridging innovation execution gap requires a systematic execution scenario with clear stages, performance thresholds, decision-making parameters combined with the iterative learning process that supports wide-ranging exploration at each stage. Further, innovation execution is an integral part of the business strategy execution, because innovation is an important component of organizational strategy. Hence, to bridge innovation execution gap is to de-risk the introduction of innovation into the market, protect existing operations and brands, and establish clear proof-of-concept before making investments to launch and scale up. Organizations can be more effective in executing innovative ideas by relying less on silo functions, more on cross-functional collaboration and continuous improvement. Innovation execution is an integral part of a strategy-execution continuum.
Leading only with operational considerations is not the way forward. IT success needs to be accompanied by working with business partners to inspire creativity, and leverage opportunities for changing how the business competes in the marketplace. Running IT as an innovation engine needs to close these gaps, keep the balance of business bottom line and taking innovation practices, in order to unleash the full digital potential of the business.
2 Five Aspects in Closing IT Innovation Gaps
IT can be an integral part of the business, by identifying the blind spots and close the gaps.
Organizations large and small are on the journey of digital transformation. The overly rigid business hierarchy with command-and-control management style came through the industrial revolution with the perspective that everything, including organizations, can be viewed as mechanical in nature. In the Birth of the Chaotic Age
with information abundance and the dawn of digitalization, it makes a very strong case that command-and-control organizations with bureaucratic culture are inherently incapable of handling, processing, managing the sheer volume of information we are faced with. IT as the information steward of the business, how to close the gaps and help to build a hyper-connected and highly innovative digital organization?
• Be aware of blind spots: Blind Spot
is due to a lack of sufficient resources or