IT BUSINESS INNOVATION

by Helen Pukszta

Whether to invest and which information technologies to invest in are difficult decisions for businesses. Missteps are expensive in terms of the cost of the investment itself, the cost of business and organizational disruption in case of failure, and the cost of missed opportunities in case of inferior project choices. Strong, executive- level IT governance structures are needed to guide such decisions.

But before decisions are made, the IT executive committee (or whatever form IT governance takes in an organization) must be presented with choices. IT business innovation is the IT function responsible for defining the pertinent IT investment choices and making recommendations. This function effectively shapes the business demand for IT by integrating external developments in the IT marketplace, IT developments among competitors, internal business insights and requests, and overall strategic requirements.

The IT business innovation manager seeks IT investment opportunities that enable or strengthen the company's competitive advantage, identifies and prepares responses to external IT-based threats, and recommends action on acquiring competitive-parity IT capabilities. The focus of IT business innovation is to strengthen the organization's competitive standing through the selective application of IT.

The IT business innovation manager poses "what if" questions and helps the organization imagine what a technology implementation might do for the business, how it could transform it, and what consequences -- good and bad -- it might bring. This function helps the business see the possibilities and develop a clear vision about the IT investment and its fit with strategy before embarking on specific projects.

The IT business innovation function, although influential, does not have direct investment authority. Rather, it has much to do with consolidating and synthesizing signals from various sources and collaborating with various stakeholders, primarily business managers who have firsthand insight into the workings of the business and a good intuition about how a technology might or might not fit.

IT business innovation ideas can, and should be encouraged to, originate anywhere in the organization. What is important is that there be a place for those ideas to be considered, vetted out, consolidated, prioritized, experimented upon, and possibly recommended for implementation. Taking each idea to the IT steering committee is impractical. Adding them to an undifferentiated "wish list" maintained by an IT manager busy with other responsibilities is ineffective. IT business innovation ensures that there is a continuous flow of creative -- or just plain practical -- ideas for the use of IT in combination with other organizational capabilities and also ensures that the best ones are pursued.

IT business innovation should not be misunderstood to be limited to those organizations that pursue product or process innovation as a consistent part of their business strategy. Whether the strategic focus is product, customer, or efficiency, IT business innovation has a role to play in every strategic scenario. The difference will be in the set of plausible, strategy-consistent IT investment choices and experiments that the specific strategic positioning and internal firm capabilities will dictate.

-- Helen Pukszta, Senior Consultant, Cutter Consortium