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How to Fund IT Innovation

Struggling to find the time and money for innovation projects? Take advantage of your IT governance process to get business buy-in for infrastructure investments, training and inventive applications of technology.

By N. Dean Meyer

March 31, 2008 — CIO — CIOs know that their organizations must keep up with rapidly evolving technologies as well as lead the enterprise in the discovery of strategic uses of IT. But with the daily pressures of business, many find there's just not enough time and money for innovation.

What happens to innovation projects? Clients need more than IT has resources to deliver. So staff diverts time away from training and product research to fulfill clients' demands. There just aren't enough hours in the day to do both.

Meanwhile, IT staff rarely find the time to work with clients to discover innovative, strategic uses of information technology. The last thing staff want is more work, when they don't have time to satisfy current business requirements. Unfortunately, current requirements are rarely all that innovative. They tend to be projects that "keep the business running" or "improve efficiencies." They're not breakthrough opportunities that utilize IT to enable business strategies. Again, short-term needs displace innovation.

Like time, money is tight. IT departments must invest in infrastructure to position themselves for the future. For the few really important, large infrastructure investments, CIOs may acquire funding, but often only after a significant investment of their personal time and "credibility chips" to sell these critical projects. For smaller infrastructure investments, however, IT may turn to clients for funding. But clients would rather pay for projects that deliver near-term business results than spend their money positioning the IT organization for the future.

Furthermore, we all know that when budgets are tight, training is the first thing to go. I call it "eating your seed corn." For lack of up-to-date skills, many IT organizations are forced to depend on external consultants and contractors to bring in needed new skills and technologies, while staff careers languish and the organization drifts slowly toward obsolescence.

Clearly, it's not a lack of interest from IT that impedes innovation projects. Time and money are the two constraints on innovation for most IT organizations. The answer to the problem of executing innovation can be found in the ways that an IT organization defines innovation and then funds it using its resource governance processes.

Three Types of Innovation

Innovation takes three distinct forms, and the funding channels differ for each. Distinguishing these three types of innovation is the first step toward designing resource governance processes that ensure a sustainable—and innovative—IT organization.

On the operations side of the IT organization, the word "innovation" connotes infrastructure enhancements. These range from simple additions to capacity to entirely new technologies and services.

 

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