Opportunities to Innovate Tomorrow

  • Andi Mann
  • George Watt
  • Peter Matthews
Chapter

Abstract

Over the years, many once-successful companies have vanished. The move from household name to has-been is sometimes swift. A look back over the IT industry can point to a number of sizeable organizations that have ceased to be or that have morphed into a new form. You may remember companies like Prime and Wang in their heyday. These were major players in the computer industry and their names only exist today as part of other organizations, but in the early days both were large successful companies. At its peak, Wang had revenue of $3 billion and a staff in excess of 30,000. What caused the demise of these large organizations? Sales slumps, economic depression, poor service, poor financial management, and unrealistic pricing are certainly some of the reasons for failure. Other organizations from this time survived and thrived. It was not that long ago that Apple was considered a basket case. How did other organizations survive all of the management and financial turmoil? In our view, one part of the reason that some companies fail and others grow is based on the failing company’s lack of foresight and innovation. Innovation in this context needs to be the right kind of innovation. Foresight needs to account for trends that were obvious in hindsight but were obscured or not even considered as important. I can remember being told a few months after the first IBM PC launch, “Don’t worry about the IBM PC: memory and storage are well below business requirements—it’s just a toy.”

Keywords

Porosity Depression Transportation Radar Marketing 

Rescuing Your Company with Future Innovations

Over the years, many once-successful companies have vanished. The move from household name to has-been is sometimes swift. A look back over the IT industry can point to a number of sizeable organizations that have ceased to be or that have morphed into a new form. You may remember companies like Prime and Wang in their heyday. These were major players in the computer industry and their names only exist today as part of other organizations, but in the early days both were large successful companies. At its peak, Wang had revenue of $3 billion and a staff in excess of 30,000. What caused the demise of these large organizations? Sales slumps, economic depression, poor service, poor financial management, and unrealistic pricing are certainly some of the reasons for failure. Other organizations from this time survived and thrived. It was not that long ago that Apple was considered a basket case. How did other organizations survive all of the management and financial turmoil? In our view, one part of the reason that some companies fail and others grow is based on the failing company’s lack of foresight and innovation. Innovation in this context needs to be the right kind of innovation. Foresight needs to account for trends that were obvious in hindsight but were obscured or not even considered as important. I can remember being told a few months after the first IBM PC launch, “Don’t worry about the IBM PC: memory and storage are well below business requirements—it’s just a toy.”

Controlled Innovation Can Save . . . Uncontrolled Innovation Can Destroy

Vision and strategy are elements that are important in the continuing success of any organization and can sometimes save a company. IT strategy does not always map to business strategy, as we have remarked earlier in the book. Some IT leaders have said that they don’t have an IT strategy—they only have a business strategy that IT supports. We believe that this is the right mindset: business-focused IT.

Innovation can definitely reinvigorate a company. For example, until the advent of the first Motorola flip or clamshell phone, the Motorola handset range was no more distinguished than the competition. Before the advent of the iPhone, the flip phone generated great interest in their handsets and was the highest-placed phone in the PC World’s “Greatest Gadgets of the Past 50 Years.1” Company failure is sometimes attributed to a failure to innovate. There are many reasons for a company to stagnate and fail. Jim Collins has discussed these reasons in several books, including Built to Last and How the Mighty Fall. It would be wrong to suggest that failure to innovate is a major factor in company failure. Indeed, Collins notes, in a Time Magazine article, that businesses are often innovating extensively up to the time of their demise.2 This could be seen as a natural, knee-jerk reaction. You can almost hear the directive from the CEO to product development:

The company is not performing well. Sales are down. We need some new products to reinvigorate our catalogue. Go out and get me some new products—something innovative that will deliver the growth that we need.

In our view, this demand for innovation—taking resources and focus away from the immediate problems—is too little too late. Collins makes the point that uncontrolled innovation and risk-taking are prevalent up to the final failure of a company. Controlled innovation, as part of the company culture and ethos, is a way of ensuring that the product lines stay vital and build growth. Using innovations as the basis of a corporate strategy will maintain and grow the organization. Innovations that are panic measures or “the only way out” are doomed to fail and bring the company down with them. Uncontrolled innovation may not save a failing company. It can have a disastrous effect on a healthy company.

Some years ago, I was in a board meeting of a company I worked for. The chairman outlined an innovation to the business model that would enable the company to grow into new locations. He asked us all, one by one, for our opinion. We unanimously endorsed the plan, providing there was some caution. We suggested that we use this to consolidate locations where we had a small operation, grow into new locations that were likely to yield further growth, but stay away from locations where the costs, infrastructure, and customers were more risky. We were told that this was timid thinking—the company would exploit all areas and the rest of the business can support weaker locations. We all left the meeting with a sense of foreboding, and we were right. The company started failing in only 18 months and failed completely after 2 years. This can be directly attributed to the decision taken by the chairman.

The negative effect of too much uncontrolled innovation is supported by comments from Thorsten Heins, the CEO of Research In Motion (RIM). He stated in an article in CIO magazine that the staff at RIM got so excited about innovation that they inserted the innovations in the product lines causing delays and quality problems. Delays and quality issues plagued RIM in 2011 and early 2012.

Using innovation as sticking plaster to heal a broken company is not a long-term plan. Using innovation to prevent a company needing sticking plaster is a better strategy. Innovation should be part of a growth strategy, of business transformation not business salvation. We are not suggesting that innovation is the best way to get your organization back on track, but lack of innovation will certainly be more likely to prevent the organization from growing. In the economic climate prevailing since 2007, growth is important.

Innovation may be essential, but it would have little value if it were not in line with the corporate vision and strategy. In  Chapter 4, we have already mentioned the link between IT, innovation, and the corporate strategy. We recommended that CIOs review the corporate strategy and become more involved in the strategic decision-making. This is possible if you have access to the corporate strategy or the people developing the strategy. Evidence from a recent survey, however, shows that only 16% of CIOs questioned were always included in corporate business strategy discussions.3

If you, the CIO, are not an integral part of setting the corporate business strategy, you may feel that there is little that you can do while you wait for words of wisdom from on high. This feeling of being an “order taker” for business IT demands is magnified if you do not have a direct reporting line to the CEO. In this case, you may have to be politically savvy and look for allies outside the CEO’s department. In most dynamic sales-focused organizations, the Chief Marketing Officer and the head of sales are influential and may be able to see the potential for innovation in their areas more easily. This is more of a political strategy and outside the scope of this book. Nonetheless, business-savvy CIOs should make themselves visible even if they are not yet seen as the trusted IT partner for the CEO. A business innovation led by IT would raise visibility where mere cost-saving would not. High praise is unlikely for merely doing your job.

A Look Ahead

In the remaining sections of this chapter, we will look at how you can develop a “nose” for innovation, enabling you to recognize the potential benefits of innovations early. Recognizing that an innovation will have little or no return for the organization is as important as recognizing an innovation that will generate millions. We will also consider where you can generate information that will help your crystal-ball gazing into the future. For instance, can you use mergers and acquisitions as a way to drive innovation and what are the pitfalls of this approach? We end the chapter with a few of the far-horizon innovations that would be interesting to put on your watch list.

Recognizing That You Are at a“VisiCalc or iPad Moment”

When it comes to innovation, many business managers anticipate an innovation that will make headlines. Searchers for the “VisiCalc” moment or the “iPad moment” may be overlooking significant innovations that will deliver business improvements. These improvements can often be made without the need to qualify as a world-changing innovation. Both VisiCalc and the iPad had a long gestation, and both had to wait for technology to catch up with requirements.

So what is a “VisiCalc moment”? VisiCalc was waiting for an affordable personal computer—step forward the early Apple II. This enabled an affordable alternative to the manual balance sheets or expensive computer bureau time available. Dan Bricklin, the inspiration behind VisiCalc, needed to write a spreadsheet for a report during his MBA studies at Harvard, and he had either to write it by hand or develop a program to give a visual representation of the spreadsheet. This program was improved and compressed to run on a microcomputer, and the VisiCalc moment had arrived. Was this a big-bang, world-changing innovation, or an incremental innovation? Pen and paper spreadsheets had been use for years but involved a lot of rewriting and correction. There were clumsy time-sharing programs available, but they were expensive and cumbersome. I would suggest that the best measure of the impact of VisiCalc was the gasp of surprise from a room full of accountants when I demonstrated VisiCalc recalculating a complex business spreadsheet in seconds. Their surprise turned to excitement when we explained the cost and other uses. At that moment, I knew how a magician feels when his best trick stuns his audience. Yes, this was a big-bang innovation, but it was the culmination of several smaller innovations:
  • Using a microcomputer rather than a mainframe or departmental mini-computer

  • Delivering an on-screen grid as the user interface

  • Allowing the sheet to be recalculated when a value was changed

Demonstrating VisiCalc, I could tell that this was a winner, but how do you know when your innovation will strike gold? How do you decide to continue investments in an innovation that has not delivered on its promise? This is the most difficult part of innovation and one that most organizations struggle to master. The balancing act between patience to see an innovation through to a successful conclusion and the ending of an unproductive project is difficult to manage.

Spotting a Winner

There is an old adage that you should not look for needs to fulfill but create a need that only you can fulfill. This is easier said than done, but there are examples of this throughout history. Some of the more recent have been the sticky note and our earlier examples. How do you spot the winning idea? There is a popular innovation myth, quoted by Scott Berkun in his book The Myths of Innovation, that good ideas are hard to find.4 He states that creativity has been sidelined in the current world because it is easy just to reuse someone else’s ideas. Look at all the people in your organization. Are they lacking in creativity? Are they bereft of ideas? Most people have ideas, but they don’t know what to do with them, as we discussed in  Chapter 4. Finding the good idea or the great idea is more difficult because there are so many ideas. Innovations are ideas that are acted on, so in this section we will consider the terms as identical.

If you consider that ideas don’t leap fully formed from the research lab but are often incomplete, untidy, and needing some development, then it is clear that you need to filter the ideas that are generated. The trick is to make sure that your filter is not set to exclude everything, just the ideas that are waiting for technology to catch up or are not likely to meet a business priority.

The filter for ideas should be set so that ideas can be categorized by the following:
  • Cost: how much an idea will cost to develop and implement. If you ask futurists what future they want, most of them will have major transportation improvements as a wish. This is not likely to happen in the short term because of the high cost of infrastructure developments.

  • Scope: the breadth of vision for the idea. If you were in the domestic water heating business, you would not want to invest in an ocean boiler, unless it is relevant to your business plan.

  • Impact: how will it change things? Will it create new value or efficiencies? Will it have a negative impact on some or all of your business in the future?

  • Relevance: a category this is often the sticking point. When people are asked to think “out of the box,” many of the ideas may not be relevant to your business or your part of the world. This could lead to their rejection unless one of the parameters of the idea creation is that your organization is looking for new lines of business or adjacent lines of business that the idea can fit in to.

Once ideas have been categorized, they can be reviewed, and in many organizations a committee of the great and good does this. These folks will have to evaluate the ideas and decide which ones are worth progressing. I am not sure that a committee would have given the iPad approval, based on the high cost of development. Here is one of the dilemmas of innovation. Often the best person to deliver the world-changing innovation is the inventor or visionary. That is not to say that a committee has no place, just that it is more likely to have organizational, political, or even social reasons to abandon something difficult with high potential. Innovators may have to argue well and fight hard to get their ideas acted on.

Times of economic crisis will generate innovations. Innovation has a value to the organization. Many organizations are keen on protecting the value of their innovations, and this can have a negative effect. There are few ideas that cannot be improved by discussion. Discussion is one area that innovators are wary of. A private inventor may not want to disclose his idea before it has some kind of protection, such as a patent. Corporate inventors may want to keep the innovation quiet so that others in the hierarchy do not claim it as their own. There are rules about prior disclosure of ideas if they are part of a patent application. Your coworkers’ discussion of ideas can be a valuable exercise and result in a stronger more valuable innovation, unless you are paranoid.

Collaboration and Communication

The reputation of the IT department as a source of understanding and delivery of innovative ideas can be enhanced. Innovative CIOs should review their communications both internally and externally. In particular, CIOs should continually review the information delivery and control systems that they are managing. You should ask some searching questions about your use of the information that you have at hand as a CIO. One source of information for dissemination is the technology futures information that you have probably gathered over time.

A more significant future development that is gaining traction in the industry relates directly to the fact that the CIO has access to most of the data the corporation owns. This access is through internal applications, databases, e-mail systems, and web sites. Having ultimate control of this data can lead to some serious innovation. A problem in virtually any organization is that this massive amount of data will continue to grow. It needs to be analyzed and the CIO is in the best position to organize this. Having control of the data, CIOs can develop analysis tools that will help them understand the complex business world that the company operates in. This understanding can lead to innovative opportunities.

The growth of social networking tools and the ability to use them to increase collaboration may also generate an “iPad moment.” In the past, collaborators had to be co-located with their team to be able to generate momentum and ideas. There were naive attempts to use distributed teams with conference calls and e-mails. In many organizations, these are still the staples of a distributed team. It has been clear for some time that not all the best-qualified thinkers in an organization will live near or travel to a central location on a frequent basis. Social networking and imaginative use of telepresence and collaboration tools are overcoming this problem. It is interesting to note that the birth of the World Wide Web would not have been possible if Tim Berners-Lee had no access to hypertext developers around the world. The Web would have stayed in CERN and probably not made it outside his department.

Real-time collaboration is in its infancy. I am someone who experimented with Google Wave and I can tell you that being able to read what someone miles away is typing, in real time, makes for clearer conversations. More importantly, online brainstorming can become a reality and idea development does not have to wait for complete sentences. I also found that if colleagues were not fluent English speakers, they were happier to collaborate in real time through text, even though they seldom spoke on a conference call. Other new developments in online collaboration are discussed later in the chapter.

Is Innovation Insight or Luck?

Innovation has often been associated with an idea that has just popped into your head—a lucky thought, in fact. Ideas don’t just happen. If you consider the creativity of a small child compared with a middle-aged employee, the child has many more ideas. We have discussed creativity in previous chapters, but it is worth mentioning here because luck, creativity, and serendipity are closely related. Serendipity can be thought of as a happy accident. Steven Johnson in his book Where Good Ideas Come From has a whole chapter on it.5 The important point he makes in this chapter is that the association between ideas is one strength of serendipity. The happy part of a happy accident is due to the significance of the accident to you. Social media and collaboration encourage serendipity. Serendipity is reduced by secrecy. As we mentioned earlier in this chapter, secrecy is often the stock-in-trade of the inventor. One way to decide if serendipity plays a part in your organization is to think back to all those corridor conversations over the coffee pot. Quite often an idea will develop because of the different backgrounds and objectives of the coffee drinkers. It is not just the stimulant effect of the coffee, but the sparking of new trains of thought generated by discussing ideas and chance meetings. We will discuss the personal network effects in a later part of this chapter.

Creating the Crystal Ball

Whenever I hear the words “predicting the future,” I have this image of a shawl-covered lady sitting in front of a crystal ball and delivering pronouncements to the hushed audience. It is interesting to contemplate that the businessman needs some of the skills of the crystal-ball gazer. I am referring to research, understanding of the impact of small changes, observation, analysis, and deduction that can create a credible prediction.

To predict the future you need to be able to look at the world in which you and your company operates. Social, political, and economic macro trends can have an influence on corporate strategy and have an impact on IT. A luxury goods supplier would be a good example of a company who would use these trends to help them develop a strategy to expand out of their own country. They would consider trends that indicate the capability to pay for the goods and the societal changes to the population to be more status-conscious. Once the company has created a strategy based on an analysis of the trends, there may be a direct effect on the IT department—for example, by localizing applications. Identifying opportunities to innovate in the future will depend on some understanding of that future.

Can You Predict the Future?

Predicting the future is not easy—so many factors influence the way the world changes. One of the most difficult problems is to account for the major factors that may have an influence and develop a contingency plan if things change. There are no simple cause-and-effect relationships in world trade. If there was a simple cause-and-effect relationship in business, the process could look like the following:
  1. 1.

    Our company has a product that consumers like.

     
  2. 2.

    There are a growing number of consumers in China.

     
  3. 3.

    We should open an office in China.

     
  4. 4.

    Sales will increase due to the extra units we sell in China.

     

While this may be simplistic, there are times when this type of logic has led to a decision that has unpredictable results. There are ways that some of the guesswork can be taken out of the decision-making process and companies often have a team of people who are tasked with building the knowledge to transfer the guesswork just mentioned into an educated guess. There are a number of recognized theories that can be brought into play. They all have to start with some basic knowledge about what is going on in the world.

There is a lot of emphasis on world conditions in this chapter. The simple reason is that these conditions can affect the markets in which you are selling your goods. If you are restricting sales to one country, no matter how large, world conditions such as the current economic crisis will affect that country. Prediction of the future is based on three layers of knowledge and understanding:
  • Knowledge of world political, social, and economic factors and trends that may affect the market you are interested in

  • Knowledge of the market and competition that you are interested in

  • Knowledge of new developments that may influence the market you are interested in. These are often disruptive developments that you need to understand. In IT terms, this is where knowledge of new and emerging technologies is valuable.

Gathering this information for the first time is a daunting task and can take many, many months. Once the knowledge is gained, it only requires frequent periodic review and amendment. This exercise is not the corporate strategy. It develops the knowledge base on which a strategy can be built. Even if you are not involved in developing the corporate strategy, this information will be valuable as it can help you understand and possibly contribute to corporate strategy. You may also find that other parts of the organization have not taken a comprehensive and organized approach to knowledge gathering.

Predicting the future is not based on guesswork but on experience and knowledge of external trends and factors that will influence technology direction. Don’t be like the guy who bought a room full of CPM-based minicomputers the week before IBM announced the IBM PC, making his investment obsolete in a matter of weeks. CIOs need to plan for the future and ensure that they are always aware of changing conditions in the business and wider world before making a plan. Gathering information is the first part of becoming knowledgeable enough to predict future innovations.

Gathering Relevant Information

A knowledge base can be constructed from a large number of information sources. You should check with the marketing and PR departments for any specialist sources they may have access to. The finance department is also a good source of economic data. You may also find some closet politicians and economists within your own department who may be interested in taking part in this exercise. Table 8-1 lists some sources of information in the three layers just mentioned.
Table 8-1

Sources of Information

Layer

Source

Information Type

World

News media

Macro trends that may affect you: war, economic slumps, major oil finds, energy shortages, raw materials trends

World

OECD and World Economic Forum reports

Macro trends but often with a less sensationalist approach compared with the news media

Market

Business and market analysts

Understanding of the market for your company’s products and services. These will have a view of the impact of world trends and enable you to create a better understanding of the relationship between market and world.

Market

IT industry analysts

Although these are specialists in IT, they often have a view of world and business trends. They may also help you to understand emerging technology trends.

Emerging and Disruptive Technologies

IT industry analysts

There is value in the emerging trends that analysts can identify; however, these are often looking further into the future than is necessary for day-to-day operations. But looking into the future is where you will discover opportunities for future innovation.

Emerging and Disruptive Technologies

IT staff

You should not neglect the knowledge and interests of the staff in your department. Some members of staff are enthusiastic and knowledgeable about the technology they work with and can provide valuable insight based on experience as well as wide reading.

One additional area of information that you may find useful is from the research labs of universities and research institutes. These organizations often produce regular reports that can be scanned for interesting information. Gather as much information as you can, as long as this does not impact the next stage of understanding future trends and opportunities. You may find that it is difficult to stop the information gathering since there is always something new on the horizon.

Information and Knowledge Can Helpwith Predictions

Eventually you will need to make a decision. This can sometimes be hindered by an obsessive information-gathering exercise. No answer is perfect; just good enough will do for most decision-making. The next stage is the analysis of the information and the synthesis of a strategy based on that knowledge. Business innovation is generally searching for new ways to grow the business. Less frequently it is focused on cost reduction, but the most influential innovations tend to be growth-oriented. Growth is often associated with entering a new product market in your own geography or opening a new office to increase existing product sales. While the CEO or head of sales typically initiates this type of innovation, the need for IT support will often mean that the CIO is involved during the decision process.

As an example of the use of this knowledge, we can look at a company planning to open an office in a different geographical region. There are many logistical problems needing a solution. In IT, there are a number of related questions to be asked that may highlight further problems to be solved:
  • Will you need local IT staff? This will be partly determined by the size of the new operation, the resilience of the local infrastructure, Internet, etc.

  • Do your existing suppliers operate in this region? What are the delivery conditions and costs?

  • Will you need to partner with other organizations locally?

  • Who will be in charge of outfitting and equipping the new office?

Added to these IT considerations, the prudent CIO will need to be familiar with the new region, its customs, and local regulations. It may be that the new region has unique privacy laws or laws restricting information that noncitizens can hold. A knowledge base to answer these questions would be of value in discussing the broader IT impact of working in this region. The innovative CIO can also use this as an opportunity to create an atmosphere of trust by demonstrating an understanding of the geo-socio-political realities of this region in meetings with senior management. This may be part of a shared knowledge base should the CIO be a part of the decision-making team. In the likely case that the CIO has been informed, much further down the decision timeline this data may reinforce or add caution to a decision. It is too late for the CIO to suggest restrictions on delivery of Internet access when the office lease has been signed. Having a good knowledge base that will become trusted in your company will help prevent IT from being considered as an afterthought.

The information that you would gather for such a knowledge base can be allied to a review of the innovation potential of a new market. Are there technologies that will work better in that region? Mobile phones are the computing device of choice in sub-Saharan Africa. The landline infrastructure is weak or nonexistent. Planning an expansion into this area may call for repurposing of your internal IT applications to a mobile platform. The expansion into a new geographic area can be used as a test bed or pilot for increasing the mobility of the whole workforce. The logistics of recruiting local staff in the new location may generate a review of IT management and recruitment across the entire company. It may be prudent that investing in remote management and one central IT function rather than duplicate functions in many locations will bring benefits to the whole of IT, not just the new location. The innovative CIO will be looking for these opportunities in any major business innovation.

Networking Is a Future Opportunity

As we have mentioned in other parts of this chapter, social networking and collaboration are having an impact on innovation. In this section, we will explore two meanings of network. The first meaning is one more familiar to technologists: the physical network that runs the business. The second meaning is that of the social network of friends, colleagues, and other personal contacts. Improving networks in both senses can yield dividends.

Physical Networks: Faster, Further, Cheaper

The most obvious effect of network improvements is in the increasing numbers of remote and distributed workers. This change is delivering benefits such as reduced travel time and more motivated employees. Increasing broadband performance is also allowing Voice over IP and video conferencing. Soon there will be enough network capacity for high-quality telepresence and virtual reality interaction. These areas may enable better communications between the company, suppliers, partners, and customers. This is not to suggest that face-to-face communications have no place. People still buy from people for high-value items, but there are increasing numbers of alternatives for commodity items.

Future innovation will depend on how technology fits together—how it communicates and relates to other technologies and users. Cloud computing is offering a partial solution to this problem. Part of the value of cloud computing is that connecting to a service requires no knowledge of the underlying technology supplying that service. Cloud computing in itself is not likely to cause many problems to end users. After all, anyone who uses Gmail or Hotmail is already an experienced cloud user.

The challenge being faced is in the physical network. At the enterprise level, companies can afford to have networking experts who will resolve issues quickly. The increased consumerization of IT, moving the IT capability out to the users, has generated a group who have little understanding or interest in solving the networking problems that may exist. Anyone who has had a problem on their home broadband will empathize with the complexity and large number of points of failure on this physical network.

The proliferation of technology in the last 20 years has generated complex networks both at home and in the office. Many complexity challenges have been solved, but some remain before the full potential of the network can be realized. Internet users are vulnerable to the impact of additional complexity and traffic. There is a potential for further congestion from the explosive capacity of Internet Protocol version 6 (IPv6). If your home broadband is already at capacity with streaming videos and other Internet traffic, the additional load of noncomputing devices using the network could expose undiscovered network vulnerabilities that cannot be hidden behind cloud computing.

“Internet of Things”: Getting Your Fridgeand TV Chatting

Retail and logistics companies are leading the implementation of Internet of Things (IoT) applications today. We have already discussed the innovation opportunities generated by IoT in  Chapter 6 “Opportunities to Innovate Today”. Some of the experiments in healthcare and transport applications of this technology are also described in  Chapter 6. Logistics and retail companies are leading the field in implementations at the moment. Although there are concrete plans in the IoT space now, IoT is also something to consider for the future.

Many analysts and commentators talk about instrumenting the world and see a greater potential for IoT in the future. There is recognition that the application of IoT technology will be a long time arriving in some business domains. Analysts have suggested that 75% of companies in the energy, automotive, utility and aerospace world will adopt IoT in the 5 to 8 year timeframe. Opportunities for innovation in IoT are both current and in the future.

One big issue drives this dual potential of IoT; there is currently no “killer app” for IoT. This issue is acknowledged widely in the IoT field and is a constant discussion point at conferences and in analyst reports. The lack of a compelling business reason for the whole of IoT is not preventing the experiments and trials. There is a feeling in the IoT world that we should just instrument things and eventually the nuggets of gold will emerge. Our instincts tell us that there is something valuable about IoT but at the moment we are not sure what that is. IoT is an area that should be kept on a watch list for future innovation as well as being considered in your current innovation plans.

Let your imagination run a little wild thinking about what you could do in your business if everything in your business world could be instrumented and capable of communicating. Consider waste disposal as a problem: if all your household or business waste was instrumented it would be possible for you or your company to take better decisions about where and how your waste can be handled. There will be the inevitable protests about “town hall snoops” checking you are disposing of your garbage properly, but these may be silenced with decent security and privacy measures. The potential advantage is the focus on the disposal chain, aiming to deliver similar efficiencies to the supply chain. An efficient disposal chain could, potentially, generate major cost savings on taxes and disposal fees. This example illustrates both the potential of IoT and some barriers to its adoption. It is already possible to instrument a lot of the disposal chain with RFID tags on goods and garbage handling. There are no compelling financial reasons to do so currently, other than avoiding fines for putting the wrong garbage in a recycling bin. Efficiencies in disposal would need a re-think of attitudes to garbage and a government plan to create an incentive for greater efficiency.

We feel that the potential of the Internet of Things will be greater in the future once there is an understanding of the wider benefits of being able to link to most parts of the physical world to the Internet. When the killer app comes it would be remiss of you to have missed it.

Smartphones Are the Computing Platformof Choice

In the developing world, smartphones are the computing platform of choice, for many of the millennials and even older generations are becoming more phone-centric. In many parts of the emerging economies, the mobile phone has the same appeal. Broadband capacity is increasing and in particular mobile broadband is increasing in capacity. This will have an impact on both the scope of the mobile network and its capabilities. As the spread of mobile broadband increases and the cost decreases, more individuals will use the smartphone. This will push the mobile capability further and further out to the edge of the network. It will bring a whole new customer base into contact for goods and services for the first time. Mobile phones are already being used in ways we never would have thought of even four years ago. In parts of Africa, users can send an SMS with the drug batch number to a pharmacy phone number and get a return SMS telling them if the drug is counterfeit or safe to use. Will the mobile phone enable more intimate conversations with customers? Are your internal applications ready for the request for mobile enablement? It may be a good time to start looking at the potential for your company and the customer requirements to decide to invest in a mobility strategy.

One area to consider beyond mobile is the potential for augmented reality via the increased capacity mobile network. We will discuss this later in the chapter.

Expanding the network and improving the network is one of the topics that really appeal to the technologist. IPv6, wireless, pervasive computing—all are comfort words and resonate with the technologists. Don’t get caught in the trap of explaining how these things work; look for the business potential.

Networking for Pleasure and Profit

As we mentioned earlier, another meaning of networking is the interaction between individuals and groups of people. Sales and marketing executives regard networking as a critical skill, leading to ideas, opportunities and friendships. The innovative CIO needs to embrace this style of networking as much if not more than the physical networking. The CIO can enable increased networking of the company, customers, and suppliers by the use of social networking tools. The IT department should accept the challenge of managing social networking for the company to ensure that the users are successful and protected.

More organizations (including your own), customers, and suppliers’ organi-zations, are networked and becoming increasingly porous. Porous is used here to describe how suppliers and customers may use your organizational tools. If you have a help desk service that customers can enter trouble tickets in to, that is a porous application. This is a growing trend, with some organizations giving suppliers access to stock levels so that the suppliers become responsible for maintaining stock rather than the retailer. All of this is part of a more networked world of business. This is frequently used as a way of cutting costs.

Social networks are being used increasingly as a communication medium. Companies are increasingly putting instructional or advertising videos on YouTube. Contact and newsworthy information is posted on Facebook and LinkedIn and executives, and thought leaders often use Twitter to disseminate information and links to relevant information. All of these are ways of increasing the level of networking that can add value to your organization. It does not matter if LinkedIn is where you reach out to customers or if Facebook is where your marketing material is located, social networking is here to stay. The old-style data center was a tightly controlled world of tried and tested applications that had been in place for a long time. Most IT managers and some CIOs still prefer it that way and have locked the company systems away from social networking. I was at a large bank recently and was told by staff that they cannot even look at their own company pages on Facebook from within the office network. This style of IT management has a negative effect on the perception of IT. Social networking should be encouraged with only small amounts of company data secured: financial information, planning and customer information, and of course, anything that is covered under the various regulations and privacy laws.

One area that social networking is enabling is collaborative working. E-mails are good communication media, but they are still stuck in the memo school of business. Social networking is allowing more interaction. A post on a social network can attract ideas and discussion that has the potential to gather more views and opinions. This can help make ideas better, help the company avoid bad decisions, and help in creating an innovative atmosphere that is open rather than closed.

Open Innovation: Enlarging Your Network

“Open innovation” is a term that was originally coined by Dr. Henry Chesbrough at Haas Business School in UC Berkeley.6 It has been well-promoted and is an initiative that is gaining some traction. The basic premise is to use a group of people to make an innovation better by collaborating. Companies should use external and internal resources to create innovations, develop products, and go to market. This model changes the emphasis from commodities that are sold to services that are supplied. In this world, IP is truly in the service delivery rather than the product being implemented. This may be counterintuitive to many existing IT organizations, but a case can be made that an open source/open innovation approach can work if the internal resources are not available to maintain a nonstrategic product line. This would require significant buy-in from the management team and in particular the finance department, but it may apply in some future cases and can be considered in future product retirement plans.

Business Expansion Using FutureIT Innovations

Opportunities to innovate in the future are likely to be focused on technologies that may be emerging today or the synergies in technology that will come from future developments. Business expansion is the most important function of the IT innovator. Leading the field with an innovation will gain visibility and drive growth. While it may not be long before other organizations catch up to you, they will always be in second place. And as long as focus and execution are in step, you will always be able to keep one step ahead—if you are first. You don’t always need to be the best.

Expansion through New Ways of Working

One of the important trends we noted in the discussion on network expansion is the growth of the network both in capacity and reach. It was only in the very early years of the 21st century that broadband technologies became commonplace in the office, then the home. Initially the Internet was accessed through dial-up modems, and then early broadband cable modems started the move to inexpensive connectivity in the developing world. Broadband capabilities in the developed world are becoming more prevalent with a small number of rural communities still to be connected. In the developed world, this has led to process and facilities innovations such as remote or home working. The spread of wireless hotspots, tablet computing, and mobile applications have meant the workforce can participate from many locations. While there are implications for social and economic developments, the tethering of employees to a location is no longer necessary. Organizations can recruit the people best able to carry out work rather than the people who can get to an office. The innovative CIO has to become more aware of the requirements for this style of working and the configuration, management, and security problems of remote working. Adapting to this new way of working will be mandatory in the future, but since it is driven by IT capabilities you have to be integral to the decision process but not seen as a negative influence. Using emerging technology such as ambient telepresence and enhanced reality will also generate new ways of communicating and delivering information.

Mobility Generates Further Expansion

While the developed world is well served by wired broadband and an increase in the number of WiFi hotspots, the developing world is relying more on mobile broadband. Predictions have been made that mobile broadband is the next growth area in networking. What are the implications for your organization? Will mobile broadband, phone tethering, and tablet computing deliver the same location independence? What advantages will that bring to your organization? How can you, as an IT leader, ensure that your company is ready to take advantage of this trend before the competitors? You should consider how a growth in mobile broadband will enable you to tap into new locations for markets and the staff to service those markets. Once the mobile broadband revolution has arrived, markets in Africa, South America, and other more remote locations will become open to your organization with a faster, cheaper start-up cost. Most importantly, employees and customers in those areas will have the same quality of service that they would have in the developed world. This may be worth considering as you plan for expansion into new locations in new geographic regions.

Increasing Your Global Reach

The global drive to expansion of the physical network capacity can also generate new markets. For example, in the health care world some communications and diagnostic tools require a network to be able to function.

The reach of other technologies can help expand your business. It will not be long before you can connect to a 3D printer, print some components on the other side of the world, and have lower-cost labor assemble the components into a finished product.

The amount of data that you have can drive better analysis of customers outside your own region. Most marketing organizations are aware of the different meaning associated with the color red in different cultures. Using red as a color for an emergency device would work in the West. In China, it may be assumed that this device is a lucky device. These broad cultural differences are well-documented. It would be a crass sales or marketing employee who ignored them when considering an expansion into a new geographic area. As data is gathered, more subtle differences will emerge, and this will enable the personalized marketing that will ensure that each customer is treated as an individual and that individuals have offerings especially for them.

New Lines of Business from Old Data

“Big data” is a phrase that is becoming a little overhyped, but describes an interesting condition. Now most organizations are focused on getting more value from their data. These organizations are being swamped by data coming from existing enterprise IT systems. Supermarkets are looking at highly personalized shopping experiences based on complex analytics. They hope to be able to upsell items based on an intimate knowledge of the customer’s individual buying pattern. A quick analysis of my buying patterns at a supermarket would indicate that I buy different wine and cheese at different times. I tend to buy lighter flavored varieties of both in the summer, heavier flavors in the winter. Marketing targeted on my seasonal preferences can result in an increased sale even with such scant analysis. Retail analysts have already delved far deeper than this into the behaviors and buying patterns of their customers. Until the current aggregation of enormous amounts of data, finer-grained data analysis has been difficult. In some strategic conversations, we have been told that the amount of data stored in an organization is a problem and costing too much. This attitude is starting to change with the realization that this data can be a gold mine of new information. New techniques and technology are starting to make new knowledge available from this amount of data.

Expanding Your Business and Market with Innovative IT

Innovative IT can deliver new lines of business to an organization. One of the more recent examples, as we mentioned in  Chapter 4, is Amazon moving into the provision of cloud services. Amazon executives have recognized that the computing power they use for supporting the business could be used to provide a different service to their customers. Amazon has reused their existing resources to expand into a new line of business. They have entered a new market that is not related to their main line of business. Organizations can exploit some of their expertise and resources to deliver these opportunities. You should take a fresh look at your company’s resources to look for new opportunities.

Identifying adjacent markets can also develop new lines of business. An adjacent line of business would be expanding into the sale of magazines if you already sold books.

Innovation Delivers Growth Through Mergers and Acquisition

As an organization develops, there are several opportunities that present different options for growth. Most startups have an innovative idea that develops into a growing organization and other innovations fuel that growth. Organic innovation of this type can generate large corporations, although frequently there is a mix of merger and acquisition (M&A) activity in parallel. Some companies start small and fuel their growth by acquiring customers, products, and market share by acquisition and have little or no organic growth beyond the start-up phase. In both these styles of growth, there will be some merger and acquisition activity. There are some common acquisition pitfalls in this approach. In regard to mergers or partnerships, the problems are slightly different.

In an acquisition, one company acquires another with a view to using their resources to grow. The acquired company may be left as a totally separate business unit, or even a separate “wholly owned” company. This separation removes some pitfalls but also may remove some of the economies of scale in property, administration, and all-supporting activities. Many acquired companies are merged into the owner’s company at least at the administrative level to drive economies in both companies. It is assumed that the acquisition would be due to some synergy between the organizations and if they are left as separate entities then there is no advantage to ownership. In IT terms, one of the most common economies of scale is the merging of internal systems. There should be no need for two accounting, human resources, or enterprise resource planning (ERP) systems as a start. This would also simplify the company regulatory compliance requirements by bringing all the systems into one central organization.

In a merger, there is a less clear “who owns what” demarcation. There may be an attempt to discuss the use of separate internal systems and management. Most importantly, the IT systems that are more flexible and standards-driven in a merger are likely to be the ones that win out. This is because the flexible systems can absorb other IT processes easier than more rigid or difficult-to-modify systems.

In a partnership, both organizations have to have some synergy and the partnership may be to enable expansion into new markets or locations or to have a cross-selling opportunity. In this case, the security and privacy of both organizations have to allow some porosity of the companies’ internal systems.

IT innovation can reduce the impact of merger and acquisition. The innovative CIO will be preparing for M&A by looking for ways to overcome some of the pitfalls.

Pitfalls of M&A

In any M&A activity, the business decision-makers tend to ignore most of the IT implications of that activity. Two banks planning to merge would not specifically discuss the internal IT systems to ensure compatibility or ease of integration; they would be concerned with other areas of the business. The integration of IT would be important but not a gating factor for the deal. Merging two separate corporate IT systems can be a long and difficult exercise, particularly if the IT systems have not been designed with flexibility in mind.

Greater consideration should be given to customer needs if the customer-facing applications are to change. Merging several applications is an opportunity to make innovative changes to the user interface and processes that these applications support.

In a partnership, there is a different requirement. A partner probably would not want to use the same customer-focused user interface to order goods. A partner would expect more information than a customer would normally expect. A partner may require supply chain information, shipping information, or marketing collateral. All of this information would need to be available to enable the partner to maximize their potential. Corporate IT systems are often locked down to such an extent that this information is difficult to achieve. If you also consider there may be incompatible IT systems, then a straight daily data dump may not be possible. This is also an issue if you and your partner have different processes to link goods and services with customers. What if your partner runs a “just-in-time” supply chain and your supply chain is based on batch behavior? IT should not be a limiting factor for mergers, acquisitions, and partnerships, but an enabler and better still an innovative factor in future success.

Innovation of Products and Services

The innovative CIO needs to develop a strategy that will allow an easy integration and exploitation of joint intellectual property (IP). Often a merger or acquisition is planned to fill a shortfall in an offering by acquiring new technology or capabilities.

One clear advantage of a merger or acquisition is the possibility of increasing your intellectual property portfolio. While there are obvious advantages to this strategy, it also enables additional innovations based on the acquired IP. In some cases, this can open up adjacent markets, as we have already mentioned, and grow the business by developing new products.

A strategy based on delivering IT as a service will increase the capability of the IT department and has the potential to create new innovative uses by aggregating the best services from both organizations in a single service. A single interface can then be developed to be the common interface to the underlying systems without requiring massive rewrites and redevelopment of those systems.

One area that can yield value is the increased understanding from access to the joint data set. Analysis of both data sets in a merger or acquisition can deliver more customer insight identifying cross-selling or up-selling potential. Developing and improving the current capabilities for handling the increasingly large amounts of data within the current organizational structure is a good way to ensure that data sets from M&A activities can deliver value quickly.

Innovation of Business Processes

We have mentioned in several chapters that the concept of IT innovating IT is not likely to win executive backing. Mergers and acquisitions are one of the few activities where IT innovating IT may be justified, as long as the discussion is on the why and business benefits level, not the how-we-plan-to-use-all-this-cool-new-technology. Modification of internal systems by taking a service-oriented approach will enable flexibility and the ability to integrate existing systems quickly. Moving from proprietary, in-house, and legacy systems to a more generally accepted standard-based system will ensure that when the decision is taken to merge two organizations, the IT department is in an open and flexible architecture.

As an M&A process is underway, there will be a change to business processes requiring an underlying change to the IT applications that support them. Delivering an 18-month plan for completing all the work may mean that you are never going to complete any task, since there may be another merger or acquisition in the next 6 months. You may want a Rolls-Royce solution to “fix this for once and all,” but you may not get this luxury. Plan for fast and near-enough right. Plan to be flexible and service-oriented, but plan to be aggressive in support of the massive business process changes that M&A will bring.

Delivering a flexible, easily integrated system to the business will create confidence in the executives that any merger, acquisition, or partnership can be viewed in purely business terms with IT enabling and smoothing out technology problems. In this way, the business remains focused on the business, and the CIO will be regarded as a trusted advisor rather than an obstacle.

Crystal Ball on Standby: The Future Is Nearer Than You Think

In this chapter, we have talked about the opportunities for future innovation. We have suggested how the future can be predicted based on a solid knowledge base and some of the areas that will influence your thinking on innovating for the future. In this section, we will talk more about the technologies that can have an influence and where they may be of value. We have mentioned a number of technologies in earlier chapters. Here we will discuss a few emerging technologies that are on the radar but are not considered a near-term option. These can be grouped into three broad areas:
  • Collaboration and communication

  • New user interfaces

  • Smarter devices and environments

We will discuss these areas in the context of innovation for the future.

Collaboration and Communication

Social networking is an important feature that has allowed more collaboration between distributed groups of people but still tends to be a send/respond model of communication, although we have mentioned real-time collaboration earlier in this chapter. One of the things lacking in conference calls, or even video conferences, is the type of serendipitous encounter that is frequently talked about as a “water cooler” event. This is based on chance meetings away from the desk at a common area like a refreshment station. These chance meetings can spark ideas, remind participants of things to discuss, or even just remind you that next time you have a challenge with something there is someone you can talk to. A frequent cry from distributed groups is for a meeting in a single location because the informal interaction is so valuable. This is the one major loss in the drive for a more distributed team.

“Ambient telepresence” is a term that refers to mobility of a telepresence terminal. The technology ranges from simple laptop, microphone, speakers, and camera to a remote control robot containing all of these things in a single, vaguely human, casing. The portability of the device is important. This is not about opening a video conference window on your own laptop; it is about allowing a device to become a personal avatar for a team member. It is a one-to-one relationship. Microsoft Research has published research in this area, referring to it as “Embedded Social Proxies.7 ” The concept is simple. If a device can represent one person, the device can be taken with the team to meetings, used for one-on-one sessions, and even taken to lunch. Microsoft Research uses a cart that is moved manually but there are other self-drive alternatives. The self-drive alternatives allow a person who is logged in as the user to drive these more expensive integrated units from place to place. Otherwise the device has to be carried or wheeled by a friendly person in that location.

There are many undiscovered challenges with this technology. For example, there is little proof that a wireless connection is fast enough to build a relationship with an avatar as a team member. Another intriguing question is how you “drive” yourself in the avatar robot down two flights of stairs and through a security pass–coded door. The challenges are real, but the technology shows promise, particularly in solving the team-building aspects of a remote or distributed team. As an innovative CIO investigating this technology, you may find a supporter in the CFO. In any international organization, the travel budget is always a major operating expense, so ways of improving productivity and teamwork that don’t involve flights will find a ready audience in the finance department.

Mobile broadband is spreading, and fourth generation bandwidth is starting to emerge. This will have an effect on ambient telepresence but will also enable the use of augmented reality. Virtual reality is where a whole virtual representation is used to simulate some segment of reality. Overlaying additional data, information, enhanced skills, and effects on top of reality is augmented reality. Virtual reality has many existing applications in terms of simulation and virtual design. Augmented reality is emerging as a means of enhancing the views of reality. A good example would be a view of some real vegetables in a supermarket, and an overlay identifying the vegetables, recommending cooking methods and recipes that use the vegetables. Supermarkets and the retail industry are already investigating this technology. There are applications in most areas of business including customer relationship management, product support, and manufacturing. Although augmented reality is in its infancy, there have been some experiments that should be watched—for example, Google’s Project Glass. Some of the planned capabilities that have been reported for this project are also in the user interface domain.

New User Interfaces

However much the display mechanisms are changing thanks to the huge uptake of tablets and touch screen technology, content production is still stuck in the screen, keyboard, pointing-device era of interface. There have been some commercial products that use voice interaction, such as Apple’s SIRI and various dictation applications. All are having mixed success, but they will continue to develop aided by the increasing miniaturization, improved battery technology, and a need to create content for a content- hungry world. Some of your users and customers who are still having problems interfacing with IT may be ready to experiment with voice control and content creation. One consideration is the increasing number of millennials who are suffering from repetitive stress injuries from heavy use of text messages and social networking. There may be a need for an alternative to mobile device data interaction that does not require repetitive movement of fingers and thumbs. This may be an opportunity for innovation in mobile workforce interaction with IT devices and nontraditional devices.

A challenge going forward is the use of voice activation and dictation in a crowded area; privacy and nuisance issues may require subvocal voice activation, although this is a long way off. While this is a technology worth keeping under scrutiny, there are also social and psychological barriers that will become more evident as people interact more with devices. This interaction with devices is more obvious in the “Internet of Things” where devices get smarter and interact more with each other and with people.

Smarter Devices and Environments

The “Internet of Things” has already been referred to in this chapter. One of the research areas that are getting some investment is in the use of integrated command-and-control systems in Smart Cities. Smart Cities are cities that have a high degree of integration between the population, the services, and the people who supply services. Many visions start with citywide broadband, terminals for specific tasks, and transport systems that take a holistic view of the movement of people and goods across the city. As noncomputing devices get connected to the Internet, the possibility for more complex interaction increases. We are already seeing this with location-based services on mobile phones becoming more common. Sensors in clothing, books, streetlights, doors, vehicles, and drinks delivery systems can monitor and interact. This is developed to the extent that people are already creating believable scenarios. For example, a person is walking down the street, a garment is monitoring the person and recognizes a slight dehydration, and the garment then communicates with a street sign that recommends the person step into the next store where there is a water fountain. While much of this has a science fiction feel, a lot of the technology is available. Wearable sensors for monitoring an individual are being used more frequently in health care. Reactive street furniture is being experimented with in integrated command-and-control systems, and location-aware software is already on your mobile phone. The debate on the ethics of this direction is not for this book, but the innovative CIO should review all of these potentially disruptive uses for devices. Devices that are on the Internet and capable of both delivering data and interacting with each other are becoming more common. Is there an innovative business application for this technology in your organization?

Footnotes

  1. 1.

     Dan Tynan, “The 50 Greatest Gadgets of the Past 50 Years,” PC World, December 24, 2005, www.pcworld.com/article/123950/the_50_greatest_gadgets_of_the_past_50_years.html , accessed on October 2012.

  2. 2.

     Randy James, “Jim Collins: How Mighty Companies fall,” Time Magazine, June 10, 2009, www.time.com/time/business/article/0,8599,1903713,00.html , accessed on May 2012.

  3. 3.

     CA Technologies, “The Future Role of the CIO,” October 2011, www.ca.com/us/collateral/white-papers/na/The-Future-Role-of-the-CIO-Becoming-the-Boss.aspx , accessed on May 2012.

  4. 4.

     Scott Berkun, The Myths of Innovation, O’Reilly Media, 2010.

  5. 5.

     Steven Johnson, Where Good Ideas Come From, Riverhead Press, 2011.

  6. 6.

     Henry Chesbrough, “Program in Open Innovation,” University of California Berkeley, 2003, http://openinnovation.berkeley.edu/index.html , accessed on May 2012.

  7. 7.

     Rob Knies, “Remote Meetings – Thinking Inside the Box,” June 2009, Microsoft Research, research.microsoft.com/en-us/news/features/esp-061009.aspx, accessed on October 2012.

Copyright information

© Andi Mann 2013

Authors and Affiliations

  • Andi Mann
    • 1
  • George Watt
    • 1
  • Peter Matthews
    • 1
  1. 1.COUSA

Personalised recommendations