The global marketplaces in which we all compete are rapidly moving, fiercely competitive and always changing. Achieving and then maintaining competitive advantage is a huge challenge for businesses. The average age of companies in the original Fortune 500 list compiled in 1955 was 75 years old. Today the average is closer to 10 years old. The question for many on that list is how do they make themselves stand out from the crowd? Being truly innovative is one of the ways businesses can differentiate themselves in a crowded marketplace; the challenge is that being innovative is easier said than done.
But what really is innovation? What are the projects, technologies and processes that deliver this Holy Grail? Many businesses claim they are innovative and the rise of ‘business transformation’ projects echoes this drive. But the problem with many business transformation projects is that they are neither innovative nor transformational. The reality is that they often end up being just system replacement projects, or worse still, organisations simply make the same mistakes again, but using different technology.
More than just keeping the lights on
IT departments in all industries are no longer just a cost centre for enterprises, but a contributor to revenue growth and market differentiation. Historically, incremental improvements to back-office processes have delivered efficiencies and cost savings. But true innovation goes beyond mere incremental change and delivers genuine step-changes. By definition, disruptive technologies and trends such as big data, cloud, mobility and in-memory computing are not simply about incremental change, but instead fundamentally changing the way business is done and the way enterprises operate.
IT departments are in the strongest position to deliver this innovation and today’s global businesses are clamouring for IT to figure out how these disruptive technologies can be used to create and maintain a competitive advantage. Henry Ford once said, ‘If I asked my customers what they wanted, they would have said a faster horse.’ Following that adage, when it comes to technology, many companies don’t always know what they want because they ‘only know what they know’. Often their focus has been on delivering efficiencies through technology and optimising existing processes. However, to deliver agility organisations need to move beyond this and focus on how to become more agile, as agility is key to delivering innovation. This culture shift, which seeks to go beyond that status quo, requires a far more open mindset be adopted at the very beginning of any project.
Innovation begins early on
A successful business transformation project that aims to be truly innovative is no small undertaking. Projects can often fall at the very first hurdle: the Request For Proposal (RFP) process. This process as it stands today is often extremely prescriptive, which in turn can hinder innovation from the get-go. If businesses predetermine what they want without fully understanding the potential of the project or what it is they are trying to transform, and thus only evaluate suppliers on their ability to meet their functional requirements, they could miss out completely on alternative and possibly far more innovative approaches.
In order to find creative and effective solutions that deliver specific business outcomes, businesses need to commit to innovation far before the RFP process. In order to innovate, businesses must therefore be more flexible at the outset of any RFP and work with technology partners who are prepared to go beyond what is simply dictated in an RFP and challenge their business to think differently. To do this successfully you need to combine the ingrained business knowledge found within an organisation, with an understanding of new technologies and what they have been able to do in similar, but also completely different industries.
Innovation through disruption
By adopting this less prescriptive approach during the RFP process and understanding the role of the IT department in delivering true innovation, businesses open themselves up to the potential benefits that previously unconsidered disruptive technologies can bring. Disruptive technologies can create possibilities that simply didn’t exist before. There isn’t a single industry where the innovative potential of these disruptive technologies cannot be realised. Change is naturally daunting, and disruptive technologies are not without risk; there can be a high cost-of-entry and the necessary skills to deploy them effectively are scarce.
But still the greatest risk is doing nothing at all and allowing your competitors to steal a march on you. As such, if businesses place a large number of small bets on disruptive technology rather than a small number of large bets, they can experiment and at the same time innovate. The challenge we face is defining just what the ‘art of the possible’ is in order to really achieve innovation. Applying technology to already well-defined business processes is not transformational; delivering lasting step changes to the way we do business by embracing the potential of new technologies, is where true innovation lies.