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Cio's role measured innovationdebate_022312

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From Deloitte Weekly Report| Technologies

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Cio's role measured innovationdebate_022312

  1. 1. The CIO’s Role in Business Innovation: Sustain or Disrupt? Deloitte Debates Should CIOs focus on sustaining innovation, using emerging technologies to improve business efficiency and effectiveness? Or should they lead the charge to apply technology in ways that disrupt business as usual? We’re at an unusual time in industry: five major forces affecting businesses are all technology-based. These forces – mobility, analytics, social, cloud computing and cyber intelligence – are being combined in new ways, opening the door for sustaining innovations that can improve productivity and drive down costs. These forces can also be used to disrupt “business as usual” to create totally new ways of generating value. So where should CIOs focus their energy and resources? Here's the debate: CIOs should sustain the business. Efficiency, effectiveness and regulatory mastery are even more important now. CIOs should focus on sustaining innovations that address today’s growing concerns. CIOs should lead disruption. Social computing, mobility and the cloud aren’t just changing society, they’re disrupting business. Who’s better positioned to help take advantage of these tools than the CIO? Technology is the fuel, not the driver. Technology enables innovation, but the business should be doing the driving. The CIO should respond to the needs of the business, not the other way around. Technology can break constraints. That’s where innovation happens. The CIO is in a rare position to lead the creation of disruptive business models given technology’s prominence across business. Immediate returns come from driving down costs. IT is the largest capital expenditure in many companies. Keeping up with technology’s declining cost curve is a full-time job with a high return on investment. You can’t shrink your way to greatness. It’s worth the deliberate sacrifice of some efficiency gains to achieve the potential long-term advantages offered by disruptive innovations.
  2. 2. Deloitte Debate 2 Chasing disruption is a crapshoot. Better to focus on incremental improvements that are more likely to pay off than risk limited resources on a long shot. The odds are better than you think. Disruptive innovation is just as likely to pay off as sustaining efforts when pursued deliberately and consistently, with a strategy and operational metrics tuned to its specific needs. My take Michael E. Raynor Director Deloitte Consulting LLP Over the last 20 years, great strides have been made in getting CIOs a seat at the strategy table. Next stop? Bringing CIOs into innovation conversations. But should they lead that discussion? For many businesses, the IT infrastructure is the enabling technology that provides opportunities to innovate and break constraints – which is at the core of disrupting business as usual for competitive advantage. It makes sense that CIOs should be at the forefront. But is it worth trading short-term efficiency for possible long-term advantage? This is where disruption theory has merit. It’s very hard to make this tradeoff when you’re told that innovation is fundamentally unpredictable. You have to be willing to fail. You have to embrace many false starts and few are willing to take such risks. Many CIOs are satisfied with keeping up with the art of the possible. The good news is that disruption theory shows that game-changing innovation is more predictable than many think. So it’s wise to evaluate the potential returns from disruptive innovations as well as sustaining ones. Of course, even CIOs who have earned their stripes through sound IT stewardship should take stock before stepping into the realm of innovation. The same processes, approaches and frameworks that made them successful in the past will likely be insufficient in this new world. But those who are able to adopt the mindset and tools necessary to shake up business models, while still effectively running the business of IT, are in a rare position to guide innovation investments that could lead to business breakthroughs.
  3. 3. Related Content Library: Deloitte Debates Services: Consulting Overview: Technology Related links: Measured innovation – The culture, disciplines and mechanics for institutionalizing innovation Join us for the Dbriefs webcast. Tech Trends 2012: Measured innovation Learn how to elevate IT for digital business. Deloitte On Technology Gain new insights on technology. This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright © 2012 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited

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