IT may be good at operating a good service to business, but is particularly bad at doing the very thing that gave IT such great success … innovation. There may be no IT / Business gap, but things could be better, highlighted by some compelling research.

In my last post (What’s the gap?) I observed that, for the most part, there is fairly good alignment between Business and IT. This is supported by research by McKinsey & Co showing that collaboration and business strategy alignment features strongly in the development of IT strategy for a large proportion of companies surveyed.

Also, the strategic importance of IT for Business is recognised by the high level of representation at the Board (44% of CIOs consulted by McKinsey in 2007 reported directly to the CEO).

The same report also highlighted that IT was heavily focused on managing and operating as a business service and this probably seems a natural role for IT.

Although there’s no doubt operating for service excellence is a key responsibility, sticking to this status quo contradicts a key factor of IT’s meteoric success over the last forty years. Had not the pioneers of modern IT innovated solutions to improve the accurate and reproducible management of information, businesses would now require impossible levels of resources to support their daily operations (imagine the number of filing clerks needed to man the vaults of index cards and paperwork to support today’s large insurance broker). In fact, without the Information Age modern businesses would not be able to support their modern day scale.

But innovation remains a neglected duty, with the majority of IT assessing themselves as not excelling. Of those interviewed by McKinsey, 57% indicated that they were either moderately or not at all effective at finding ways for IT to add value to their businesses (in other words, a failure to innovate based on internal needs). The picture was worse for innovation to improve competitiveness, where 67% of respondents were either moderately or not at all effective at introducing technology better than their business’ competition.

By settling into a routine of design, build and operate, IT is often failing to proactively point the direction to opportunity for Business to exploit … opportunities that business people have no way of understanding or detecting on their own.

IT leadership must grow to the next level of maturity, adding innovation as a core process to their lifecycle management, becoming as routine as specifying, building and operating a new server rack. This can be achieved by adopting key steps as part of the CIO role.

1. Establish your Enterprise Architecture (not new … but, really, have you defined your enterprise architecture current and target states? do you have a roadmap agreed by all stakeholders?)
2. Investigate your environment to improve competitiveness (do you research, subscribe to credible news feeds, have someone appointed to monitor key technologies and trends, have even a sketchy map of your technology landscape, regularly monitor the technology of your business’ competitors, and regularly evaluate the landscape against your business strategy to identify new opportunities?)
3. Liaise with your business’ IT users to spot opportunities for effectiveness and efficiency (pretty self-explanatory … but it is time-consuming … maybe innovate a way to make it easier to get feedback? what’s your immediate reaction when you do get feedback? … if it’s more "they just doesn’t understand IT", maybe you need to adjust your attitude, rather than the audience, to avoid missing opportunities)
4. Continually refresh the IT strategy and target EA (are you working with the business to ensure linkage of IT and business strategy change? does your EA reflect your IT strategy and vice versa? does your ‘current state’ EA truly reflect the current state and do you have a process for updating it with routine changes? is there a process for influencing business strategy based on the findings from environment and internal needs analysis?)

Adding these steps to your CIO office / IT department’s routine procedures in a way that naturally integrates with the rest of the way things are done (design, build, operate) will add innovation as an integral part of daily life. As this begins to produce real business benefits, the ordinary will become extraordinary.