FlatWorld CIOs: Bringing Discipline to Innovation
The IT world has always struggled to articulate the value of its investments. CIOs have been beaten up by the CFO and forced to produce detailed business cases. “Why do you want to standardize the platforms? How much will that add to the bottom-line?“ – the CFO asks. At the same time, certain company CIOs have developed strong processes within the IT organization to justify investments in new business-technology ideas and gained the confidence of the CFO. These forward-looking CIOs, lets call them Flat-World CIOs, are defining a path of discipline in their own world of innovation. The business world, CEOs, COOs and CFOs should take a leaf out of our flat-world CIOs books on how to manage profitable innovation across the company.
The CIO of a large midwest-based retailer has instilled a rigorous discipline of business cases in every IT project that his large and extended IT organization undertakes… and I mean really elaborate business cases. Tremendous thought and brainstorming goes in with senior business and IT leaders in the same room in detailed debates on how to quantify benefits and costs of a particular initiative. So whats new?…it’s the rigor and discipline of filtering and managing Business-IT ideas. The sheer effort that goes into their projects is sometimes frustrating for the stakeholders involved (including us) but looking back at the projects undertaken there in the last 4 years, I can say that it works.“We have plenty of fantastic business ideas…our challenge is figuring out which ones to execute and how to execute” - the CIO of a large and successful CPG company explained. “So we can keep discussing these ideas but we have to put hard numbers against each and then quickly decide which ones to do and get them done…and forget about the rest of the ideas for the time. The funnel has to narrow down quickly as the clock is ticking”.
Another Retail CIO has instilled a fantastic portfolio management strategy (something that actually works) for new projects defining checkpoints or gates at key junctures which are important to figure out which projects are to be abandoned and which ones to be taken forward at every stage of the project..That does not mean all CIOs do is to make the process difficult and the ideas that survive the rigor make it through while others suffer. Some CIOs have developed an intuitive knack of evaluating new ideas...Almost like venture capitalists.
For example, some CIOs I met in the last 4 weeks have been excited by a joint solution offering from Infosys and MediaCart geared towards improving consumer connects and enhancing shopper experience. Essentially what we’re talking about is a smart shopping cart that knows where it is, where it’s been and what’s in it, and can interact with the shopper by means of a forward mounted LCD display and push button interface. By providing the ability to deliver context-relevant content when it matters most, and supply basic shopping assistance such as “find item” and expedited check-out to every shopper, the solution gives retailers and manufacturers the ability to do things for the consumer at the point of purchase that they have not been able to do before. It is a win-win business model for shoppers, CPG (manufacturers) and retail organizations alike.Given the power of this idea and the low cost of piloting it, this has received instant encouragement and pilot sponsorship from CIO’s…. faster than I would have initially imagined. No rigorous business-cases here since the benefits are clear.
All the above mentioned CIOs are raising the bar for the prioritization, filtering and focusing process for IT. There are failed projects once in a while, but the key is that the portfolio management and process management strategy helps ensure overall success. The companies above are known for their technology-led business innovation in their own industries. The rest of the corporate world should take a page or two out of the discipline and process that these flat-world CIOs have inculcated in their innovation eco-system.
Comments
Supporting the idea proffered by Sandeep above that perhaps certain technologies are sufficiently game-changing that they do not require significant ROI analysis, it is worthwhile to consider the definition of innovation. My personal favorite is one offered up by famed inventor of the Segway Human Transporter, Dean Kamen. He submits that in order for something to be truly innovative, it needs to enable something that was previously not possible. So, it becomes less about doing something in a new and better way, but rather doing something that was heretofore impossible. Perhaps it is these truly innovative solutions or concepts that require less of the rigorous business case analysis we often see. Further, I suspect one is likely to find a strong inverse correlation between the detailed financial justification projects must be subject to, and the ultimate extent which they fundamentally alter the status quo. Simply put, the value of TRUE innovation or breakthrough technologies or business models is implicit to those who really understand the business.
Posted by: Devon Ferreira | March 23, 2007 06:14 PM
...Another Retail CIO has instilled a fantastic portfolio management strategy (something that actually works) for new projects ... mentioned by Sandeep is quite interesting. I would like to share a paper that I published on this topic. Pls see the link below:
http://hosteddocs.ittoolbox.com/RK120304.pdf
Regards,
Ramesh Kumar S
Posted by: Ramesh Kumar, Chennai, India | April 18, 2007 10:38 AM