Innovation is the old horse lines of business trot out to blame the CIO for not staying relevant and strategic and to justify going out and doing their own thing, be that in implementing communications infrastructure or engaging with various SaaS providers. But IT has good reason for wanting formal processes, not the least of which are security, quality of service, and cost effectiveness. Somehow IT needs to find a way to be an innovator and a gatekeeper, providing rapid strategic value while mitigating risk and reducing basic service costs.
Unfortunately, many CIOs are failing in these efforts, as reported last week in Wall Street Journal's CIO Journal blog. News editor Tom Loftus wrote:
"The business is focused on one part, and overwhelmingly, IT is focused on another part," Naufal Khan, managing partner in McKinsey's Chicago office and an author of the report, tells CIO Journal. For all the talk of alignment between business and IT, the survey finds doubt over the ability of CIOs to shift from running IT as a services organization to driving business growth. One telling statistic: only 35% of executives said that IT facilitates their company's entry into new markets, down from 57% in 2012.
"The business is focused on one part, and overwhelmingly, IT is focused on another part," Naufal Khan, managing partner in McKinsey's Chicago office and an author of the report, tells CIO Journal. For all the talk of alignment between business and IT, the survey finds doubt over the ability of CIOs to shift from running IT as a services organization to driving business growth. One telling statistic: only 35% of executives said that IT facilitates their company's entry into new markets, down from 57% in 2012.
Insight gleaned from CEB's 2014 IT Budget Benchmarking Survey of 900 CIOs supports this data. As mentioned in a CEB blog, the survey found:
We see an increased demand not only for responsive enterprise applications through advances in consumer technology, but also for mobile apps and mobile apps that behave like consumer apps... intuitive, easy to navigate, and just work. In response, CEB found that respondents allocated 17% of the IT project budget to customer interface investments (up from 15% last year) and the role of user-experience designer will become mainstream by the end of 2015.
Following WSJ's recent 2015 CIO Network conference, panelists came out with these recommendations for CIOs:
• Be a change agent
• Focus on value differentiation -- value vs. cost
• Turn risk into opportunity
• Create a business-centric vision
• Be a change agent
• Focus on value differentiation -- value vs. cost
• Turn risk into opportunity
• Create a business-centric vision
I think what we really need to ask is the best way to involve IT as a strategic partner with business units, leveraging existing and new assets to foster and drive innovation. Many times the thought is to embrace Agile development processes. The challenge with Agile, however, is that it takes a while for training, finding the right project, stumble upon implementation and, ultimately, it ends up a modified Agile approach.
What I've learned over the years is that the process doesn't have to be cumbersome and all-encompassing to lead to innovation and business relevance. I believe there is a much simpler and faster way to introduce innovation as a business/IT partnership and not distract IT from day-to-day operational needs. The approach provides quick hit results -- return on investment (ROI) in less than 180 days -- while the CIO and the IT team tackle business unit issues by introducing problem-solving techniques and innovation.
For this approach or any other problem-solving or innovation techniques to work, the IT organization must establish relevance by having an effective and well-run infrastructure. Without this, the CIO will never become a trusted partner in the innovation process.
My approach to innovation and quick hit results comprises a six-step lightweight framework complete with feedback loops for process improvement and to provide learning opportunities for IT staff.
Step 1: Criteria/Lens Development
As the first step, create a steering group by partnering with a business unit to determine what areas could use innovative technical thinking to drive business impact. Many times the need is straightforward, the problem is easily solvable -- with a simple app or a website update, for example -- and the outcome is dramatic ROI.
During this stage, it is critical that the process of setting criteria and focus areas doesn't break down to a simple list of new reports or system performance complaints. To ward this off, the group must engage in a brainstorming session with business unit leaders (not too many) on areas that could use improvement. This session establishes success criteria and the lens that provides the focus areas for IT/business unit teams to gather and synthesize information.
Ideally each team should be no larger than two to three people. The steering group gets feedback from the field on a regular basis and provides direction for additional focus.
The goal here is not to suggest massive enterprise-wide monolithic solutions, but to discover areas where productivity gains can be had with a little help. The purpose of the steering committee is also to judge which project or projects should move forward based on the "Focus" results from Step 3, below.
Click to the next page for steps 2 through 6
Step 2: Snapshots
Here a small team, including a business-minded IT professional and a business unit representative, head out to the field and explore the challenges identified by the steering group. This will require asking questions, getting feedback, and listening to what is impeding productivity or creating undue costs; sales and operations personnel are usually closest to the action. This is time for honest feedback from field personnel with possible ideas for a solution.
Part of the "active" listening process is to formulate possible and very high-level approaches to solving the problem. The solution might be to develop a custom app, add a communications component to a business process, provide access to existing tools, or build a simple custom app that integrates business processes or data streams. The approach here is not to solve the problem but to start formulating what is needed and what can be done.
Several teams should be engaged simultaneously, each looking at different business unit areas or across business units. This process shouldn't take more than a couple of weeks at the most, including scheduling meetings.
Step 3: Focus
Here the various IT/business unit teams come together to lay out findings, explore options, propose implementation ideas, and estimate effort required to produce the quickest ROI. This is where out-of-the-box thinking comes into play, including innovative ideas that may not include technology but could simply be a new way of integrating information or adjusting business flow.
The team should put together a relative scatter chart, such as the one shown below, for weighting results. One axis shows the ease of implementation and the other is business impact. The choice of projects to propose is obvious: Pick the ones that have the least risk and are easiest to implement with the highest business impact.
The goal is to provide rapid answers. This isn't meant to be an exact science but a best guess. If the initiative degrades to determining high precision, then the process gets mired down and may never see the light of day. Initial solutions need not be polished; they are rough drafts, so don't get down in the weeds too soon.
Step 4: Prototype
This is the phase for technology development and taking the risk out of the innovation. The steering group approves the recommended projects and sets up a prototyping schedule that typically runs from 4 to 8 weeks. The prototyping should be lightweight, mostly starting with concepts on paper or whiteboards. It should include ideas for the user interface (UI), using UI wire diagrams and working closely with the customer to understand the business process. Prototyping should also include a rough architecture, showing systems and data interactions on a high level. Participants must keep an open mind as they determine whether the proposed approach might work.
This phase also includes additional research to explore with the potential use of innovating with new technologies or possible extensions to existing technology. A feedback loop ties the business unit and customer together. The process from high-level UI design to a high-level functional design should move quickly, and even possibly include results from tying into existing databases or creating a new one. This is an Agile-like process, but less formal.
For prototyping, testing, and execution, leverage or write standard queries to extract data for use on a test server (could be externally hosted) to build the new application, taking care not to write data back to the original source. This is much quicker than using existing data systems, and the prototyping team isn't hampered by operational constraints and nervousness of the IT infrastructure guardians. The business unit and IT teams present prototype results to the steering group for approval to move forward to the next phase.
This approach better defines and captures project execution costs, technology risk mitigation, training, support, ROI estimates, and so on. This is also the point in the process for determining where the productivity or cost savings will result, and to establish a baseline for measuring success.
Step 5: Execute
In this final phase, the approved prototype gets built. The customer is still involved in this process but not as much as in the prototyping phase. Because the IT/business unit team has identified risks, costs, and technology choices, the project can move forward rapidly.
One decision here is whether to use internal or external resources for application development, but in either case the project is already defined well enough for a handoff. This is an opportunity for project development or possibly exposing IT personnel to new technology and approaches.
Step 6: Refocus
Based on the steps above, the steering group should revisit and adjust the criteria established during Step 1 -- and launch another effort.
I've used this approach for more than 10 years, and have had high degree of success in launching both products and internal applications in record time. As my methodology shows, innovation doesn't have to be hard or a huge process. It's not about dropping in new technology but being part of the business process and innovating incrementally and taking the risks out of projects with quick hit ROI results.
One Fortune 500 CIO told me he wished he could have a trusted innovation team. His core team doesn't have time to look at new technologies and figure out whether they fit their business model or solve a customer's problem. Build trust with the employees and take some chances... small ones... isolate risks, expose staff to new ideas, and the results will be amazing.
And you'll find no old horses in the IT department.
Hear more of Richard Tworek's insights on IT's role for today at Enterprise Connect 2015 in Orlando March 16 to 19. He'll be a panelist in the session, "IT and the Lines-of-Business: Is the Balance of Power Really Shifting?"
