Most of the CIOs I speak with are looking at the year ahead as an opportunity to drive innovation within their organizations, usually by automating back office activities. That's a good place to start. But the most aggressive are looking beyond running the IT shop more efficiently and effectively; they're also experimenting with new technologies that can increase profitability, improve competitiveness and attract new customers. We call them ambidextrous innovators.
Here are five areas for experimentation that seem to have value potential for both the back and the front office.
1. The Cloud—The buzz will only get louder, but experienced CIOs aren't getting caught up in the hype. Incremental innovation offers the means to test and learn without the risk of a big-bang, budget-busting experiment. Try prototyping applications in a rapidly provisioned, web-based environment to define what cloud computing means for the organization. For non-mission-critical data, evaluate cloud-based storage instead of buying more. Working with the CFO, the CIO can examine new financial models to determine if the cloud really offers the savings that are so often promised.
Ambidextrous innovators are looking beyond how the cloud can alter the IT department and experimenting with ways new cloud capabilities can impact the organization more broadly. Start collaborating with other parts of the business to explore whether new cloud-based capabilities are compatible with the existing architecture, and create value rather costly complexity.
2. Location Awareness—Assets on the move, be they employees, vehicles, inventory or even customers, represent an attractive test bed for experimentation. GPS chips continue to drop in price and are becoming ubiquitous in smartphones, laptops, tablets and other devices. RFID technology continues to mature. Technology-enabled communities of interest are leveraging information about the location of customers to drive traffic and sales. The CIO can experiment with location awareness technology to uncover low-risk, high value opportunities. Those might lie in real-time tracking for a logistics firm, or in conducting deep analysis of location-based information, such as the neighborhoods of highest risk exposure, for a property/casualty insurer.
3. Mobility—According to the UN's International Telecommunications Union there are 4.6 billion mobile phone subscriptions worldwide. On one hand, what are the needs and problems you might address for your employees among that huge group? On the other, what sort of mobile experience are your customers craving? The ambidextrous innovator will look both ways for opportunities to create value.
It's not just about gaming, maps, and weather data. This holiday season mobile price comparison apps gave consumers new power when they visited retailers. Talk to your front-line salespeople and customer service leadership about how customers might benefit by using mobile apps from your company. Think beyond efficiencies and brainstorm about new services that can improve your value proposition and build more loyal customers.
4. Social Media—Ambidextrous innovators would be well served by diving into the application program interfaces (APIs) of those thousands of social media applications that have arisen since the advent of the smart phone. How could a social media application help drive customer service efficiencies? How could crowd-sourcing be leveraged to engage customers in the design of new products? Most importantly, how can the information generated through social media activities be captured, stored and analyzed to yield fresh insights that lead to real innovation?
Conversely, the CIO should consider experimenting with ways of modularizing and extending the reach of the company's own business services by opening up APIs to third-party business partners to create a very low cost of sales for reaching new customers.
5. Data visualization—Smartphones are already giving consumers the means to layer photos within a different visual context. There are dozens of free tools from reputable sources. And on December 7, 2010 the U.S. Treasury Department launched a new website redesign, including new data visualizations for information such as interest rate and Recovery Act data. Talk to your team about ways of visualizing business, technology, and information architectures so that the rest of management truly understands what you're talking about. Ask the CFO if he would like to take traditional reports and bar/pie charts to the next level by layering data in context. Demonstrate to the CMO what's possible in analyzing market potential on a block-by-block basis in a given neighborhood and presenting that information in an augmented reality on a map.
Let the Experimentation Begin
The CIO who wants to be an ambidextrous innovator — automating back office operations and creating value customers will pay for — should keep in mind four priorities. Keep the experimentation aligned with real business needs. Support an innovation engine for generating fresh ideas, for example a dedicated team, a competition, or a connection with an academic institution. Align skills from across the organization to help in the effort. Adopt a clear roadmap and the rigor to stay on course.
Which technologies are you experimenting with this year? And will you be innovating with one hand tied behind your back, or ambidextrously?
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