CIOs Are Playing A Greater Role In Innovation

by CXOtoday News Desk    Nov 18, 2014


While innovation is becoming an integral part of business success, something that CIOs and their fellow C-suites are realizing more than ever, A recent CEB study shows that only 33 percent of the IT budget this year falls under the category “business opportunity and innovation.” The research shows the percentage is up from 31 percent of the budget for 2013 – which is an indication of optimism that IT leaders are playing a greater role in innovation, but also says a lot more needs to be done in this regard.

In other words, CIOs have been changing their people (through the roles), processes, and technologies in order to dedicate more time, attention, and budget to innovation.

CEB defines “business opportunity” as “Investments that deliver new capabilities that drive the realization of business benefits; typically involve initiatives that expand your organization’s current line of business while “Innovation” is defined as “Transformative sources of competitive advantage; investment returns are typically hard to measure and involve initiatives that are outside your organization’s current line of business.

An interesting finding from the survey includes those IT departments that allocate greater portion of their budget to innovation and business opportunity – which is over 40 percent of budget – do not have more staff on average, and often have lower budgets overall, indicating that they can do more with less.

Toward this end, the study notes that innovation investors make a combination of investment decisions that enable them to allocate more to building new capabilities. Some of these decisions include embedding flexibility into their budgeting process, taking the lead in moving to the cloud, readily adopting emerging IT roles as well as end-to-end IT services.

In other words, CIOs who are leaders in innovation and business have a more flexible budgeting process. The study notes that over two-third of these executives make mid-course corrections with regard to changing business demands, which helps them support evolving priorities.

These IT leaders also tend to invest not only in software as a service (SaaS) technology, but extend their investments into infrastructure as a service (IaaS) and platform as a service (PaaS). Nearly half of these organizations chose to invest in all three cloud solutions. The study notes that “by exploiting these new approaches, these organizations can access greater service flexibility.”

Innovative decision makers also select an operating model and roles that most effectively support the organization. Nearly 70 percent of innovation investors have adopted new roles helping IT better deliver on business outcomes. Some of these roles involve that of business architect, chief information architect, user experience designer, and service architect to name a few.

According to CEB, 75 percent of innovative CIOs and C-suites focus on a set of business outcome aligned services, which run at their own speed and are optimized to a specific level of cost and maturity. Undoubtedly, those teams are likely to produce much better results when compared to their competitors in the marketplace, says the study.