Innovating with information technology

Business IT innovation has been around ever since computers entered businesses. However, this important business activity generally lacks formal definition in organizations and is often assumed to take place somewhere deep within the confines of the IT organization.

For those businesses looking to improve their use of information technology to enhance their performance and competitive standing, here are a few considerations for making business IT innovation work:

* Regardless of the business strategy being pursued, innovative application of information technology has a prominent role to play in any strategic scenario. As a business activity, IT is not limited to those strategies that focus on growth or those that are driven by product innovation. Business strategies dictate the available choices and opportunities pursued with IT as the enabler. But whether the strategic focus is the product, interaction with the customer, or efficiency, creative use of IT to further business differentiation offers significant strategic potential.

* Although a business must keep a watchful eye on IT investments that become a competitive necessity, in its essence, business IT innovation is about being different. It is about seeking those applications of IT that enable and augment a competitive advantage. It is about breaking out of the cycle of merely following standard IT investments and best practices of the industry and about creating unique bundles of value by combining non-proprietary IT with processes, resources, and capabilities in ways that set apart rather than conform.

* Business innovation through information technology should not be confused with technology experimentation that is typically engineering-focused and limited to monitoring and vetting out of new and often unproven information technologies. Business IT innovation collaborates with and synthesizes the findings of IT experimentation, but its focus is on the innovative business uses of IT rather than on innovative technologies themselves. However, ongoing experimentation in the use of IT in the specific business context of the organization should be pursued as one of the prerequisites for successful business IT innovation.

* Business IT innovation is not simply about defining IT solutions as an answer to preformulated business problems. Instead, business IT innovation helps to formulate new business directions, new business opportunities, and even new business problems while applying insights about, and sometimes in direct response to, available technologies. It is not a passive function merely seeking to satisfy the business customer, but one that is in active partnership with and engaged with the entire business.

* Those individuals who were attracted to IT in the first place because of its engineering appeal generally do not make the best candidates for business IT innovation. Though informed and inspired by information technologies, business IT innovation is keenly business- rather than technology-oriented. Business IT innovation is about leadership and about guiding the organization to the best options available with IT and optimal decisions in IT investments. Such leadership combines knowledge of IT, vision about technologies’ potential, business insight specific to the organization and industry, creativity, ability to inspire and communicate, and at the same time realism about what a technology can or cannot deliver and what an organization can or cannot absorb.

Businesses spent the last decade implementing massive business applications that focused on following existing best practices and afforded scant opportunity for bundling of those applications in ways that helped to set a business apart. The more-recent crop of applications and architectures appears to offer more potential for variability in how the technologies are applied to business ends. That variability spells out more opportunity for business IT innovation. But even where cross-industry standardization is the norm, the challenge for businesses is to find ways to use generally available technologies to create and enhance unique business capabilities.

— Helen Pukszta, Senior Consultant, Cutter Consortium

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