Six Mandates for IT Innovation

The economic mood may be gloomy, but the value of IT innovation has not diminished. The 2009 IT Innovation and Effectiveness Study, which polled roughly 150 executives from major companies, finds that most business leaders understand the importance of IT innovation in terms of their companies' bottom lines and future goals. Leading firms match that understanding with the tools, strategies and capabilities to drive successful IT innovation throughout their organizations.

According to this year's findings, 90 percent of respondents identify IT as either an "important" or "extremely important" strategic differentiator. Nearly as many cite IT innovation as growing in importance (see figure). At the same time, spending on IT innovation has dropped in the past decade and now makes up only 14 percent of the IT budget.

What separates IT innovation leaders from the rest of the pack? Leaders demonstrate not only vision and out-of-the-box thinking, but also an ability to recognize the roadblocks to making the vision a reality. Studying these best-practice companies, it becomes clear that the best IT innovation is not by accident. Rather, leading companies share the following characteristics:

1. Develop world-class IT delivery capabilities. The best IT departments get the basics right. They focus on delivering IT services effectively—reducing complexity in the application portfolio, developing business skills within IT and forecasting business needs better. This frees up resources for more innovation.

Figure: Technology innovation is becoming more important to companies

2. Invest and measure IT innovation. Placing IT initiatives and investment targets under a single umbrella can help ensure that IT innovation gets the investment it needs and that projects are viewed holistically as a portfolio rather than as a series of independent activities.

3. Balance IT leadership with business partnerships. More companies and industries are outlining specific positions and establishing IT councils and other forums to drive IT innovation. These firms are more likely to have a positive view of IT and its contributions to the company.

4. Integrate products and services with traditional back-office IT. Because an IT perspective cuts across all functions, it can improve firmwide integration and innovation. A centralized IT division can forge a comprehensive view of processes that are fundamental to the organization, help standardize them and increase innovation. Integrating data and information can improve the delivery of products and services and the customer experience.

5. Collaborate with customers, employees and suppliers. Successful innovators manage the strategic IT roadmap among all stakeholders while navigating the complexities of working with different people, processes and technologies. Some departments, including sales and marketing, product development, customer support and supply chain, are commonly on par with, or even better than, IT when it comes to using technology innovation to build a competitive advantage.

6. Make sound business decisions on emerging technology. Evaluating which nascent technologies will support your corporate strategies—and which should be ignored—is key to establishing a competitive position. A culture that encourages IT innovation will allow for experimentation and time to gauge the true impact of an idea.

For more information about the study findings, see "Delivering Technology Innovation" at www.atkearney.com or contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .