The CIO challenge: Do you have enough money for IT innovation?

The search for impactful IT innovation, while maintaining operational efficiency is not new. However, given the extremely demanding and dynamic technological and organisational environments, CIOs must rethink how IT innovation can be achieved while maintaining and running existing systems.

In particular, as the speed of introducing new technological and service platforms, such as Internet of Things (IoT), artificial intelligence, and blockchain has recently increased, keeping up with the competition has become increasingly challenging.

To keep up with the pace of innovation, CIOs have to allocate a significant portion of their IT budget to innovative projects while ensuring that they are keeping the lights on in an efficient and effective manner.

A recent study (by the author and independent research firm Vanson Bourneand commissioned by Rimini Street,based on responses from 900 IT decision makers across the globe) shows that finding the funds and achieving innovation is still a challenge for many CIOs, even when it is obvious to them that the survival of the firm depends on it. We found that:

  • 98 per cent believe that their organisation needs to increase IT innovation spending.

  • 71 per cent are worried about how their organisation will find budget for IT innovation

  • 83 per cent acknowledged a link between spending on IT innovation and the firm’s competitive position

  • 77 per cent indicated that the biggest blocker to achieving innovation in their organisation is the over-spending on ‘keeping the lights on’

  • 74 per cent stated that current contracts with service providers do not accommodate innovation

  • 63 per cent feel that they are locked in to current relationships with service providers thus lacking the ability to explore other options to innovate through partnership

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First and foremost, companies struggle with shrinking to flat budgets to fund innovationDr Ilan Oshri, University of Auckland

With growing pressures on IT spending, overinvestment in keeping the lights on and slow pace of innovation from technology vendors, firms are at immediate risk of losing their competitive edge. They must up their game and consider radical strategies that will enable innovation now.

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