If you are a CIO at a large corporation, you feel the pain of national governments that attempt to direct funds on behalf of the citizens of the country in new and innovative ways, only to find that almost all funds are mandated to existing programs. Maybe a few percentage points are up for real discussion.
A new wave of R&D is hitting industry in the form of sensors, monitors, networks, presence and location detection embedded in vehicles, equipment, structures, everyday objects and on humans. Triangulate these with ubiquitous smart phones and wireless connectivity and amazing things happen. Increasing R&D to leverage the technology is not necessarily the right answer. Take GM as an example, which cut its core R&D team by 25% about 18 months ago. Ask them why and they might tell you what you are experiencing yourself – innovation can be sourced from anywhere on the planet, and what does it matter if it is Detroit or Tel Aviv? Kansas or Kiev?
In the business software world, most profound innovations are not developed in the R&D labs of the major business software firms. Instead they buy. Just looking at a few vendors like IBM, Oracle and Salesforce.com illustrates the point. Collectively they have purchased nearly 100 software companies in the past seven years alone, and these are savvy tactics.
But as a CIO you look to the core for as much as you can as a way of developing the best systems of record for basic, essential processes. How do you marry that approach with the need to respond to the many innovations that are rarely the hallmark of the large application vendors? Just like enterprise knowledge that is easy to accumulate but difficult to purge, even when it is no longer relevant and likely a distraction, so is it difficult to unwind expensive home-grown software solutions or inflexible business application suites.
There is a good reason for innovation to come from outside of the large suites, in the same way that great art and literature come from the wild upstarts respectful of but not beholden to the established masters. It is as another outsider, Bob Dylan, sang in 1965 on the Highway 61 Revisited song, Like a rolling Stone: “When you got nothing, you got nothing to lose.” When you have no track record, no core to maintain, no maintenance license to distract you, or a sales force that knows what it knows, and no consulting companies driving you to repeat the past until you run out of the present, you can innovate quickly.
There are phenomenal young technology companies and new ideas popping up all of the time. In the CRM space there are companies like Eudata and FacilityLive and Earnix and Personetics and dozens of others that look at every emerging technology like natural language, correlation of buying behavior and location, connectedness with others, affinity towards a brand – and mix those with connection to your mobile device – and help support the new consumer in a myriad of ways.
But here is the rub: how to free up IT budget to innovate, and one key might be cutting out parts of your current spend and targeting at the new. It is not easy. We’ll have to rethink the impossible: return to our core software suppliers and re-open contracts, and replatform some applications in the Cloud, and get the Marketing department to lean-in.
The first step is to inventory the application portfolio and keeping a bright red line under the components that could be considered of lower value and what bits are missing. Get someone in Marketing to work with someone on your team to scout out the leading edge new technologies that could help the company differentiate products and services, and map out how to shift a small bit of investment over to these innovative technologies. To succeed you will need a CEO that allows you to think like the wild upstart, not beholden to the status quo, as though you were doing this for the first time, with nothing to lose.
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