Innovation labs. and processes are being setup to help with exploration and prototyping of emerging technologies but where are companies investing? And what approaches are driving results? This research brief provides a synopsis of a recent survey of business and technology leaders to uncover which emerging technologies they are investing in and the different results that proactive versus reactive companies are reporting from their innovation efforts.
*The New CIO:Taking Charge of Innovative Digitization
The New CIO: Taking Charge
of Innovative Digitization
With digital literacy now a corporate mandate,
chief information officers have an unprecedented
opportunity to lead a process that will
fundamentally reshape their business. Success
will require vision, execution and the ability to
bridge organizational and cultural divides.
Digital innovation is about using emerging
technologies to enhance the customer
experience, create new products and
markets and find operational efficiencies. But
transitioning to digital business is no small
task. A recent Capgemini/MIT survey reveals
that only 7 percent of companies are able to
rapidly organize around and exploit new digital
One such organization is Phenix Energy
Group, Inc., a manager of complex projects. It is
using software-defined infrastructure to enable
massive automation of its IT resources. The
result: Its IT staff is 90 percent smaller than it
would have been in a traditional data center, and
the cost savings are passed along to customers.
“Our goal is to automate systems to the greatest-
possible extent,” says COO and acting CIO
Approaches to innovation
New research by IDG Research Services and
Capgemini indicates that companies taking a
proactive approach to digital innovation see
bigger transformative opportunities than those
responding reflexively. Proactive companies are
also linking digital innovation to specific business
outcomes and have a formal innovation process.
Not surprisingly, all companies surveyed intend
to use digital innovation to improve the experience
for newly information-empowered customers.
Nearly six in ten said they expect to apply
technology to new-product development. Among
proactive companies, the ratio is eight in ten.
Proactive organizations are also setting their
sights high. Six in ten said they are extremely
or very likely to make a significant change to
their current business model through digital
innovation, compared to just 22 percent of the
Internal efficiencies are also an important
motivator. Five out of six respondents are
highly likely to use digital innovation to enhance
existing technologies or processes or to improve
efficiency. Nearly all proactive respondents
The IDG research reveals both similarities and
differences in how the two types of respondents
set technology priorities.
Of the 17 technologies measured, only two—
convergence and the Internet of Things—are
targeted for investment by fewer than half of
the respondents. Security tops the priority
list, followed closely by mobility, business
intelligence, big data/analytics, business
continuity, automation of core business
processes and compliance. Interest is especially
pronounced among proactive organizations.
There are interesting distinctions between
proactive and reactive groups in other
technology domains. Proactive firms are
investing more heavily in convergence and social
Recent Capgemini/IDG research suggests that a
proactive approach yields the most dramatic results.
networking tools. They’re putting budget toward
the Internet of Things by a 65 percent to 25
percent margin over reactive firms.
This willingness to commit to early-stage
technologies indicates that proactive companies
are more likely to be the big winners in a digitally
empowered business landscape.
Challenges to creating a culture
Still, the transformation will not be easy. According
to the Capgemini/IDG study, most companies are
struggling to apply digital technology to redefine
business processes. In fact, fewer than 10
percent of the respondents believe they are
doing an excellent job of innovating.
Many also have difficulty building business
use cases and getting alignment on strategy.
Obstacles include company politics, difficulty
implementing new processes, platform
restrictions, security and cost.
Those firms that have a proactive innovation
process in place, however, rate their progress
as “excellent” or “very good” in achieving
business outcomes, by about a 2-to-1 margin
over reactive firms. For example, they’re nearly
three times as likely to say they’re making strong
progress when it comes to changing culture
and mind-set. This underscores the value of
executive sponsorship and planning.
It’s disappointing that few companies are
looking at ways to fundamentally change their
business model even though disruption is
occurring across all industries from competitors
with drastically different business models.
Technology is driving changes in customer
behavior across nearly every industry segment.
It’s essential that businesses be able to evolve
their own models to adapt.
The role of the CIO
The CIO’s critical role in digital innovation is
clearly underscored by the sharp distinctions
between the practices of proactive and reactive
organizations. Proactive companies report a
much higher overall level of CIO engagement,
particularly in the early stages.
For example, about twice as many proactive
companies involve the CIO in idea generation
as reactive ones. Many more proactive
organizations also involve the CIO in strategy
definition and managing the innovation process.
Clearly, proactive digital innovators are putting
their trust in IT to drive digital innovation. Smart
IT leaders won’t let that chance slip away.
The CIO mandate
Nearly 20 years ago, the IT world became
smitten by the concept of “business process
reengineering.” Few companies actually
achieved that goal then, but times have changed.
Seat-of-the-pants decision-making has been
supplanted by a rigorous focus on data-driven
tactics. Cloud computing and software-
defined infrastructure present unprecedented
opportunities for organizations to optimize their
IT resources and bring technology closer to
the point of decision. The C-suite understands
technology’s value, and it’s no longer a matter
of aligning IT with the business but, rather, of
getting the business aligned with the potential of
Organizations whose CIOs define innovation
strategy in the early stages and take a planned,
proactive approach to transitioning to a digital
business model will gain a significant competitive
advantage over those that wait. Leadership
in digital innovation is the CIO’s game to win—
or lose. ■
*The New CIO:Taking Charge of Innovative Digitization
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Source: IDG Research, December 2015
Progress in Various Areas with Respect to Digital Innovation
% Extremely/very good
Using technology to facilitate
collaboration between employees
Encouraging business use cases for
Coming up with an overall vision
Getting business alignment and
agreement on strategy
Ensuring the right skill sets
Respondents at organizations that approach digital innovation proactively report higher levels of progress in
each area versus other respondents. There are not significant differences by title or organization size.