The pandemic has accelerated business growth to the extreme and CIOs should make sure investment in innovation is focused on the right areas. Ezat Dayeh, Senior Systems Engineering Manager, Western Europe at Cohesity, says that CIOs must put technology innovation at the heart of their strategic roadmaps in order to stay ahead.
Technological innovation must be a priority for European organisations. If your business doesn’t continually look for new ways to disrupt its market, then you risk watching your own company being disrupted by other innovators. But if innovation is so important, why are some organisations failing to invest as much in creating new digital products and services as others?
Gartner says CIOs at top organisations face fewer constraints, with 28% saying they have secured additional funding to support more experimentation in IT. That proportion compares to just 19% for trailing organisations. The analyst says organisations that increase funding of digital innovation are 2.7 times more likely to be a top performer than a trailing one.
What seems to be emerging as we enter the post-COVID age is a two-speed split on digital innovation: while some pioneers are always on the lookout for new ways to boost their bottom line, others are struggling to get the cash to ensure that digital innovation is a number-one business priority.
To be fair to digital leaders, most are aware of the need for digital innovation. Two-thirds (67%) of CIOs believe the creation of new revenue-generating initiatives is among their top job responsibilities, according to IDG research.
However, being aware of the need for almost-constant Digital Transformation is just the starting point. If CIOs and their business peers don’t prioritise innovation, they will fall behind their competitors and new, fleet-of-foot digital natives. Take the financial services sector, for example – almost 90% of global firms fear losing revenue to FinTech challengers, says consultant PWC.
It’s a similar story from media and manufacturing to retail and e-commerce: CIOs must keep one eye on their competitors and another on digital innovation to avoid seeing market share being eroded. To stay one step ahead, CIOs must put technology innovation at the heart of their strategic roadmaps.
Those looking for further commitment and cash from their executive sponsors should look to lessons learnt during the Coronavirus pandemic. At the business’ hour of need, it was CIOs and their quickly enacted Digital Transformation plans that kept businesses operational.
Two-thirds (67%) of CIOs said demand for new digital products and services had increased from a year ago, with even more respondents (83%) anticipating an increase through 2021, reports Gartner. Nine out of 10 top performers pursue digital channels and almost three-quarters introduce digital products faster.
Senior stakeholders across the business – even those who might once have doubted the power of Digital Transformation – have been impressed with IT chiefs and their use of technology. Gartner analyst Andy Rowsell-Jones refers to the past 18 months as ‘a watershed moment’ for CIOs, suggesting there’s no going back to how things were before.
Yet despite all these successes, the game is far from won. Digital Transformation has been a priority at extreme times, but it can’t afford to fall back behind more mundane concerns as economies and societies recover.
Consultant McKinsey says companies that invested in innovation during past crises delivered superior growth and performance afterwards. Take the 2009 financial crisis – organisations that maintained their innovation focus emerged stronger, outperforming the market average by more than 30% and continuing to deliver accelerated growth over the following five years.
In the aftermath of the 2009 crisis, CIOs played a crucial role, using nascent cloud developments and consumerisation to support growth. Now, CIOs must step up to the plate again – and this time they have an even better opportunity to drive change, due to technology being the underlying plumbing for every successful business.
Through the rest of this year and into the next, CIOs must work as the board’s trusted confidante. They must use the new-found interest in Digital Transformation to help the business thrive in the post-COVID age. They must work with the rest of the C-suite to identify business opportunities and challenges and then find ways to use digital technologies to create innovative solutions.
In order to do that, they must continue to score notable successes. In many ways, the Digital Transformation that CIOs pursued through 2020 relied on tried and tested technologies, such as the cloud and collaboration services. To push digital innovation to the centre of business strategies, CIOs must take a much more radical approach to the adoption of new technologies.
That’s where things get trickier. Yes, the business wants more digitisation – but not at excessive cost. Digital innovation can be expensive, especially if it doesn’t produce desired returns. Gartner reports that two-thirds of digital initiatives not only fail to deliver on their promises but also reveal ‘enterprise weaknesses’, causing organisations to see a gap between expectations and results.
CIOs must work to fill this chasm this year and beyond. They must overcome the challenges and prove the benefits of a fresh investment in digital innovation. To do this successfully, CIOs should focus on four areas: business alignment; technological capability; agile capacity; and engaged leadership.
In the case of alignment, Gartner says CIOs should ensure their IT initiatives align with digital business acceleration. They should draft business cases around digital channels. If money is tight, CIOs should consider putting back-office projects for finance, marketing or human resources on the back burner in favour of allocating more cash to digital innovation.
When it comes to technological capability, CIOs should make sure investment in innovation is focused on the right areas. More than 40% of organisations say Artificial Intelligence and distributed cloud are priority spending areas, says Gartner. Around two-thirds (65%) of European CIOs, meanwhile, plan to increase spending by the highest amount on cybersecurity.
As business and customer demands continue to change quickly, CIOs must ensure they have the agile talent across their internal teams and partners. Analyst Forrester says IT and business teams must be ready for continuous change, be adaptive, creative and resilient, and able to adjust quickly with just-in-time planning and execution.
Finally, CIOs must lead from the front. Creating new products and services is now a top-three board priority, according to recruitment specialist, Harvey Nash. Half of organisations have major plans for transformation in the next two to three years. CIOs have a wonderful opportunity to build on this enthusiasm for change. They must engage with their peers to deliver innovation that works.
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