Globally, businesses are facing radical changes within the current economic and market structures. In order to remain competitive, they will have to innovate around their products as well as services, but in a cost-effective manner. PwC?s 16th Annual Global CEO Survey suggests that CEOs are looking for new ways to stimulate demand and foster customer loyalty. They also aim to keep their R&D costs down and make the innovation process more efficient.
Today, the chief information officer (CIO) of an organisation can play an important role in driving innovation across the business. This is a stark contrast to the traditional role of a CIO, where in the past, he or she was mainly responsible for supporting business operations and ensure cost reduction. Today, a CIO has to focus on enterprise growth and profitability. He or she has to be a strategist as well as a visionary with a forward-looking approach.
The CIO?s role must evolve from being the chief information officer to that of a chief innovation officer. An effective technology strategy cannot be created in silo. Hence, it is vital for the CIO to collaborate with members of the C-suite, sharing the same level of understanding of corporate strategy, opportunities and risks, while at the same time, chalking out a technology roadmap. According to PwC?s 5th Annual Digital IQ Survey, companies looking at nurturing strong collaborations between the CIO and other C-suite members are four times likely to be top performers as compared to those with less collaborative teams.
While IT can be a key driver for innovation, it can be a barrier as well. The biggest challenge being the complexity posed by large and complex IT landscapes. In such a scenario, enterprises neither have the budget nor the time to focus on innovation. Instead, they are caught up in the infinite loop of day-to-day activities such as IT integration, configuration, upgrades, maintenance, etc. The other obstacle to innovation is the organisational culture. This comes from a conservative mindset of being comfortable with the status quo rather than embracing new technologies, which may require change from the business-as-
usual operations.
We believe that technology plays a crucial role in amplifying the performance of any business. A company that continuously adopts technology, masters it and drives business integration is likely to have a sustainable advantage over its peers in the market. Specifically, we see a convergence of four key technologies to drive innovation namely, social networking, mobile computing, analytics and cloud computing (also termed as SMAC).
Though each of these technologies has their unique impact, at the same time, they also complement each other in order to drive business transformation. Social media defines ?who we work with? and enables to collaboration and communication with employees as well as customers. Mobile devices create a platform ?where we work? providing anytime, anywhere access to applications stored within the cloud and other data sources. Analytics identifies ?what we work on? and helps us make actionable sense of data. Cloud enables ?how we do the work? and contains information and applications that people use. Together, these technologies foster innovation through new ways of product development, customer service and interaction, partnerships, thereby creating value.
Advancements in internet technologies have resulted in the emergence of sophisticated forms of collaboration at virtually zero cost. Customers and employee expectations have also shifted radically. They are willing to share their personal experiences without any reservations, provide inputs in order to improvise upon products, services, as well as solve problems. In turn, they expect businesses to be transparent and responsive. These present an opportunity for enterprises to cost-effectively crowdsource creative ideas and co-create solutions based on these ideas. Proper listening strategies can accelerate innovation by tapping into the thought process of a much larger stakeholder group.
Proliferation of mobile devices (not necessarily only mobile phones and tablets, but a myriad of other devices that have built-in smart features to sense and respond like sensors, biometric devices, etc) provides enterprises with a new platform to engage and interact with their customers as well as employees. These devices are not mere tools for accessing applications, but are drivers of innovation as they can create an ecosystem that can transform the customer and employee experience. Enterprises can leverage these devices in order to differentiate and create a competitive advantage in a rapidly shifting market.
Today, data resides outside the traditional sources and within multiple public spaces. Data collected from various such sources is generally unstructured and is referred to as big data. Such data sets are growing exponentially, and are way too large, too raw, or too unstructured for analysis using traditional relational data analysis. Once simplified through analytics into actionable strategies, this sea of unstructured information can provide enterprises insights into the pulse of consumer demand and trends. Analytics combined with a comprehensive social media strategy will become a critical competitive requirement for companies in order to innovate, improve customer service and reduce costs.
Leading organisations are now realising that cloud computing is far more than just a mere sophisticated IT solution. It is in fact, a better business solution. Cloud computing has the potential to simplify IT, thus making time and resources available for innovation, reduce costs by leveraging scalable on-demand resources, streamline internal operations and improve business agility by reducing time-to-market.
While it is pertinent that emerging technologies will drive innovation, however, even the best of technologies cannot deliver success without a structured approach, and a well-defined strategy. Enterprises will have to develop a comprehensive strategy around the manner in which they wish to organise around innovation and ways to achieve the best possible results from innovation. This needs to be followed by the identification of technologies that are best-suited to their specific requirements. Most importantly, enterprises need to integrate innovation into the fabric of their corporate culture.
With inputs from Ritesh Pal, cloud strategist, Advisory, PwC India
The writer (Pawan Kumar S) is executive-director, technology consulting, PwC India
