by Stephen Franchetti

5 steps to drive and foster innovation in IT

Jul 28, 20237 mins
Digital TransformationIT Leadership

By prioritizing technology, people, and customers, IT leaders can future-proof their businesses and move digital transformation forward.

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Credit: Getty Images

Tight budgets and labor shortages have remained an ongoing challenge for IT leaders in 2023. As a result, CIOs are looking at ways of doing more with less, while continuing to digitally transform their organizations. How can we free up funds in one area to invest or innovate in another area of the business?

This is especially critical within physical operations – the industries that drive more than 40% of the global GDP – as organizations like ABF Freight and Liberty Energy look for ways to operate more efficiently, gain end-to-end visibility, and focus on a sustainability agenda. Many of these companies that have been around for decades are eager to continue digitizing workflows and harnessing real-time data to deliver business outcomes. In fact, according to Samsara’s State of Connected Operations Report, connected operations leaders who reported the highest level of digital maturity were 6x more likely to exceed their financial goals by 25% or more.

In addition to bottom-line benefits, employees are often inspired and motivated by innovation – seeking job opportunities that encourage experimentation and embrace new ideas. With these factors in mind, here are five steps CIOs and IT leaders can take to drive innovation and future-proof their organization.

Step #1: Invest in a modern data stack and break down silos

Accelerated digital transformation and connectivity means that businesses are generating more data than ever before. To manage this data at scale, IT teams should invest in a modern data stack and build out a world-class architecture to maintain an agile edge as the company grows. To me, there are three main elements to the modern data stack – it’s cloud-based, it has broad integration opportunities, and it provides valuable insights out of the box. You want to have a cloud data platform that allows for fast set up and time to market, but it also needs to integrate with modern architecture. Modern enterprises, on average, have more than 1,000 SaaS applications in use. Your modern data stack should have connectors to all of your key systems and have the ability to deliver key insights and results quickly.

Step #2: Look up and out into the industry

It’s important to keep a pulse on the broader industry as you evaluate technology investments and identify the best opportunities for innovation within the organization. I encourage CIOs to embrace the role of a general manager and consider – what’s the product market fit and current industry landscape? What kind of market penetration are we targeting among users? Motivate your team to understand the broader landscape by allocating 5-10% of their time to work on looking up and out into the market. Meeting periodically with external partners, peers, or even VCs can help fuel an ideation funnel and maximize your return on investment in emerging solutions. Once you get an understanding of which of these technologies fit your specific use case or solve a particular pain point, then quickly move to proof-of-concept to test out the value to your business.

Step #3: Lead with user experience and don’t overlook the last mile

IT organizations live and die on the strength of the user experience associated with the services they provide and the solutions they deploy. It’s up to CIOs to take an active role in owning that experience for employees and customers. IT teams can be so focused on the many technical aspects of deploying new technology, that long-term adoption and stickiness among users can get overlooked.

Always consider and prioritize the last mile of any technology deployment to ensure you’re getting the most out of your investments. This includes everything from effective change management and communication to adoption analysis after the fact. There are some technologies that are more complex in nature and will require some degree of training. Find the right cross-functional partners within your organization to make this successful and bring them into the process early. I also recommend IT teams understand the TAM of any given deployment, so you can uncover obstacles and focus on anything that might prevent wider adoption. A closed feedback loop with end users at this stage is critical as well.

Taking this approach can help ensure the success of emerging technology deployments and as a result, inspire further innovation and experimentation for new investments down the line.

Step #4: Leverage AI and automation to scale

AI is everywhere! It feels like in the last year we have finally arrived in the era of AI. It has evolved from a sideline experiment to a core part of how most organizations run their business.

The race is on for incumbent technology providers to infuse their offerings with AI, and it seems like every week there’s a new cadre of AI apps coming to market. If you’re not already thinking about how to leverage AI as a priority, you should be. Identify use cases that you can experiment with across your business. There are many vertical AI applications that are emerging that provide great solutions for specific use cases, with a relatively low barrier to entry – whether it’s an intelligent Customer Support bot or synthesizing Legal documents into a digestible form, or creating compelling creative content for Marketing – look across your business to identify those areas that are ripe for this type of innovation. Experiment, iterate, assess, and if it works – expand. If not, move on to the next!

The AI space is moving at a breakneck pace. Of course, this means we also need to remain nimble, agile, and open-minded. IT teams will need to build in more time for experimentation, expect failures, and anticipate the consolidation of technology providers and rapid change in application players within this landscape. All of this brings opportunities for organizations to harness the power of AI, and IT leaders should lead the charge in applying it to their business.

Step #5: Invest in your team

Your organization’s greatest asset is its people! In today’s environment, it’s important to empower and upskill employees with digital tools and technologies that allow them to do their best work. At the same time, defining your team culture and core values can have a major impact on both recruitment and retention. As an IT leader, you should take the time and be intentional about defining what you stand for as a team and what your mission is. You can then use these as a lens for new candidates, in performance reviews, and when recognizing employees.

CIOs can also help draw a line of sight between the work the team is doing and the strategies of the company that enable it to win in the marketplace. If employees can see that direct alignment, they are much more engaged and likely to stay, as they have a sense that the work they are doing is really moving the company forward.

Fostering a culture of innovation in IT requires you to accept some level of risk. With these steps, I hope leaders can identify the opportunities that make the most sense for their business and leverage emerging technologies to boost productivity, improve operational efficiency, and enhance the employee experience.

by Stephen Franchetti

Stephen is a contributor for CIO.