Delivering innovative products, services, and new ways of engaging with customers is now more than just a competitive weapon, it has become a survival imperative. Businesses expect their IT organizations to deliver the tools to drive innovation today before their competitors out-innovate them, yet,, for mature organizations, between 75-80% of their IT budget and resources are devoted to simply “keeping the lights on.” And that means that the old status quo, has become a barrier to delivering on the promise of the move to digital and embracing the power of disruptive technologies like cloud, mobility, and the Internet of Things (IoT).
More and more, CIOs are facing the impossible challenge of delivering significant change with a shrinking set of resources, while adopting increasingly complex solutions to address business challenges. It’s no wonder that a CIO’s tenure is measured in months, not years.
So, how can they manage to balance the impossible demands of keeping the lights on and yet still reinvent their businesses, and embrace the potential of digital transformation?
Many argue that a two-tier, or two-speed, IT approach is the right answer. This approach centers around the bulk of resources being locked in maintaining the status quo, with a separate stream for innovation to ultimately replace the core capabilities that exist today. Yet, such an approach solidifies the concept of two modes of technology, and therefore the idea that only a decreasing fraction of the total IT capacity of the business can be used to drive innovation. It becomes, in a very real way, part of the same problem it seeks to solve.
Looking forward to 2017, we should expect to see even greater pressure to deliver innovation more quickly, and to be successful out of the gate. Because with such a small amount of resources available for building the “new,” failed projects can be fatal to a business’ competitive edge. Worse still, the IoT will continue to open up new opportunities for innovators to create new markets, and to erode the strength of incumbents in even the most established positions.
In 2017, CIOs must commit to a new approach, or rather, the reevaluation of a well-understood, tried-and-tested approach to building innovative technology and business offerings. Most simply, to be successful, CIOs will need to start to move that dividing line between “keeping the lights on” and “innovation” in the right direction – to embrace the opportunities of today’s technology to be part of the innovation for tomorrow.
Such an approach rejects the concept of two-mode IT, as it recognizes that there is incredible value in what works today. Instead of resigning core IT functions to the twilight of “keeping the lights on,” CIOs must explore ways to carry that investment forward, to see them as foundational elements of new services, rather than roadblocks to building them. For example, financial services organizations have massive investments in highly reliable, legacy technology, often residing on their venerable mainframe systems. Yet, instead of trying to reinvent the wheel, they are bringing together these core services with new technologies that enable highly personalized, intelligent, and responsive banking services delivered on mobile platforms. This isn’t simply an attempt to put “lipstick on pigs,” but instead a recognition of the entire value chain of services from mainframe to mobile platform. As a result, the business can deliver new services faster, in a more agile way, with less risk of failure, because they are working on a well-understood and trusted foundation.
Over the course of the next 12 months, this ability to think differently in the way we build innovation itself will define those organizations that can move quickly enough to seize the market opportunities opened up by the next, massive way of disruptive technologies, of which IoT, Mixed or Enhanced Reality, and Machine Learning, are but a few.
Driving innovation is what CIO’s must do. But they must innovate in the way they think about innovation itself, they must not only think outside the box, but reject the very idea of the box itself. And in doing so, deliver the next generation of solutions that will define how we interact and use technology for decades to come.