Global CIO Survey 2008 - Innovator vs Operator - Capgemini

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Qualifying for a Role in BusinessInnovation‘‘A controlled tensionis necessary’’Balancing operationaleffectiveness with businessinnovationOur survey questions specificallyaddressed the IT function’sinvolvement in business innovation.We were interested to know whetherthe traditional demands on the CIO todeliver better, faster and cheaper ITservices left enough time and moneyto address business change.The following matrix illustrates thedifference between the operator andinnovator roles. The innovator focuseson new ideas to create competitiveadvantage whereas the operator is moreconcerned with cost containment; inboth roles, the CIO can have either atechnology focus or a business servicefocus. To be effective, the CIO has tobe able to adapt in accordance withthe needs of the business at anygiven time.Operational distractions are thebiggest barrier for the ITfunction to overcomeMost executives have similar conflictingdemands to manage. For CIOs, it isexceptionally hard to strike the rightbalance between their innovator andoperator roles, because of the extentto which IT impacts every part of theorganisation. In his article “IT Doesn’tMatter” 10 , Nicholas Carr compares ITdisruption to a lapse in power supply:“Today, an IT disruption can proveequally paralysing to your company’sability to make products, deliverservices and satisfy customers”. Withthat level of impact associated with abreakdown, it is easy to see why manyCIOs are tempted to focus on theoperational side.Figure 5: The two roles of the CIO: Innovator vs. OperatorCost Containment Competitive AdvantageDiscovering InnovativeTechnology to bringvalue to the businessApplying Technology toreduce IT operating costsInnovatorOperatorChanging the Game byBusiness Model InnovationImproving BusinessProcesses to reduceadministration costsThe CIO has two roles:innovator and operator.The challenge is to combineand manage these roles:that is, to facilitate and driveinnovation while alsodelivering basics such ascost efficiencies andservice levels.Technology FocusBusiness Service Focus10 Nicholas G. Carr, Harvard Business Review, 2003 – in the article, he argues that IT has become a commodity: its ubiquity has reduced its strategic value10
Capgemini Consultingthe way we see it‘‘We need to find thebalance betweencontinuity and innovation.We have gone throughyears of focus on costreduction and are nowasked to move faster tosupport the business,but we cannot afford tolet performance slip.’’A look at the challenges identified byour respondents reinforces themessage that operational factors canbe a constraint on the ability toinnovate. The constraint that wasmentioned most often was “a focus onshort-term operational matters”,followed by “insufficient capabilities”.Business leaders, too, are apt to regardIT as a commodity item likeelectricity: the less communicationthey have with the IT function, thehappier they are because they onlytalk when there is a problem.Excelling at the fundamentalsis criticalOur findings show that performancein the delivery of fundamental ITservices (application management,infrastructure and support) has amajor impact on how the IT functionis regarded by the business. There isalso a strong correlation between abusiness that is innovating effectivelyand a business where the fundamentalIT services are being delivered well.Because operational issues can be thebiggest inhibitor to the IT functiontaking part in business innovation, itis critical to ensure that thefundamentals are robust.CIOs who wish to strengthen theirinnovator role should therefore ensurethat they are meeting the business’sexpectations in their operator role. Toachieve that quickly, a greater focuson industrialisation 11 or outsourcingmay be an effective strategy to balancegetting the job done and creating timefor other more innovative activities.Figure 6: IT function challenges andbarriers in regard to innovationShort termoperational mattersInsufficientcapabilitiesDifficulties inrecruiting skilled staffLack of businesssponsorship and buy inPoor collaborationbetween business and ITSlow developmenttimesFast changingbusiness environmentWhat are the main challenges within your IT functionwhich constrain your ability to innovate?Lack offinancesLack of flexibility andunderstanding frommy IT partner0% 10% 20% 30% 40% 50% 60%% of CIOs selecting challengeFigure 7: Impact of IT fundamentalperformance on business perceptionof IT functionHow would you rate the performance of your IT fundamentals?Very PoorPoorNeutralGoodVery Good0% 10% 20% 30% 40% 50% 60% 70%The IT function is viewed as performing strongly bythe business (% of CIOs agreeing)Figure 8: Impact of IT fundamentalperformance on the business’s abilityto innovateHow would you rate the performance of your IT fundamentals?Very PoorPoorNeutralGoodVery Good0% 10% 20% 30% 40% 50% 60% 70%Your business is innovating effectively?(% of CIOs agreeing)11 industrialisation - standardisation of IT delivery so that more affordable resources can be usedGlobal CIO Survey 2008 11
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Global CIO Survey 2008 - Innovator vs Operator - Capgemini

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