09 Mar Innovation critical as CIOs must do more with less
MADISON – While CIOs and IT professionals face the daunting task of doing more with less in a struggling economy, technological innovation will serve as the light that guides business out of the darkness.
That was a key message delivered to CIOs and IT professionals at the Fusion 2009 CEO-CIO Symposium on March 4-5 at the University of Wisconsin Fluno Center.
“I fundamentally believe that technology is going to get us out of this mess,” said Tom Koulopoulos, a Boston-based consultant who delivered a keynote address. “Historically, that’s the way it’s always been. New innovation is going to get us out of this crisis.”
While all the leading indicators say that these are tough economic times – the economy is currently shrinking at a rate of 5% a year, new home construction fell 16.8% in January, and national unemployment is at 7.6% and rising – now is the time to be thinking ahead instead of merely focusing on cost cutting, said Dr. Ajei Gopal, an Executive VP of the Products and Technology Group for CA Inc., who was a featured speaker at Fusion 2009.
The process of innovation is actually easier to manage and navigate during tough economic times, and represents a unique opportunity, Gopal said.
During the Great Depression in 1933, Kraft launched the consumer staple Miracle Whip, and Revlon brought Toni, a highly successful hair care product, to market. Motorola was also started during the Depression.
“Even during times like this, you have to count your pennies while investing in the future,” Gopal said. “I think that’s just common sense. There is a difference between fact-driven analysis and fear-driven paralysis.”
New innovation will come out of the current belt-tightening mode that business is in, and will come from the existing fabric, Koulopoulus said.
IT is the business
The prevailing wisdom at this year’s conference was that the former notion of business/IT alignment is no longer relevant, and has been replaced by the growing belief that IT is the business.
“Information is so deeply embedded in the business, that managing it and pulling out data helps you in the direction of the business,” said Gartner Inc. analyst Jorge Lopez in a pre-conference interview. “It’s what is required for the business. What is the information that executives truly need to succeed going forward?
“For many executives, they want to have the data to make decisions,” Lopez said. “In many cases, they are finding the data they have is useless. So, how do you get ahead of it, so that you can do better scenario type planning? It’s a far more intimate stitching together of information flows and business performance, going forward.”
Most U.S. firms are still in the latter stages of the triage or cost-cutting phase of the economic downturn, Lopez said. While it might be hard to fathom, now is the time that CIOs should start to think about innovation while muddling through the coming economic doldrums – a period of stagnation that comes after the initial wave of job cuts and reduced earnings.
“For CIO’s, these are extremely volatile times, so the risk for them is extremely high,” Lopez said. “They are asking themselves, `Am I cutting the right costs and making the right investments?’”
Practical Innovation
For some people, the concept of innovation is represented by a whiz-bang, out-of-the-blue invention, Gopal said. But, practical innovation is less about developing new products or material goods, and more about harnessing existing technologies, and revising existing business models to optimize and deliver value.
This concept, which some at the conference referred to as “geekenomics,” figures to play a key role in leading the U.S., and the rest of the world, out of the economic doldrums.
Peter Coffee, a self-described “geekonomist,” and Director of Platform Research for salesforce.com, says that geekenomics is the discipline of managing innovation in a way that acknowledges the weak connection between technical merit and widespread adoption of a product or idea.
Translated, a leading-edge product or process is nothing without mass acceptance. A good example is the iPod, which was launched during the recession in 2001, and was predated by other .mp3 players. The iPod succeeded thanks to Apple’s development of a product that was easy for consumers to use.
Coffee says that user preferences and user community cultures are not obstacles to be overcome, but are part of the environment in which a proposed innovation must strive to succeed.
“It’s having a vision of technical possibility, and looking at the predominant social structures and community behavior,” Coffee said during a free-flowing discussion. “Usefulness is not enough – people have to want to use it.”
Social networking on the rise
An emerging technology that figures to change the rules of the game is social networking, Koulopoulus said. The use of personal Web pages on Facebook and LinkedIn is seeing explosive growth as people seek new ways to connect.
“Kids today want transparency,” Koulopoulus said. “The world is flat – we are all interconnected. So we need complex technologies to deal with a complex world. The fascinating thing about social networking is that it’s impossible to put a value on it.”