Innovation: Inventing enterprise IT’s future
Tackling one of IT’s biggest challenges, HP Software’s head of innovation discusses what innovation should look like, and how to instill it.
One of the recurring discussion topics in the CIO space is the pressure on IT leaders to innovate despite shrinking/stagnant budgets and the huge burden of just maintaining existing infrastructure. We talk about “flipping the ratio” of innovation to maintenance, customarily estimated at 20/80 or 30/70, but there’s not as much discussion of what innovation actually looks like, and how you foster and maintain it.
Ahi Gvirtsman is head of innovation at HP Software. We asked him to share some thoughts about innovation in enterprise IT, and he didn’t hesitate. “IT departments must keep an open mind and innovate around their procedures and structures,” he says. “They should not play the reactive game, where they have to deal with what the LOBs throw at them, but rather take the initiative and offer solutions to their LOBs that can keep up and maybe even provide the organization with a competitive advantage by adopting cutting-edge technologies in secure and compliant ways.”
With that, we launched into the discussion …
Q: What does “innovation” mean in an IT/business context?
AG: I’m glad that you’re asking me this question, because innovation is a term that is being constantly misused. There’s a vast literature about innovation; here’s a definition that draws from various sources:
Innovation is first and foremost about finding new ways of generating revenues. It can be through coming up with new technologies, but also through new business models, new value of existing assets, new customer experience—anything that can create differentiation that is not easy to replicate and gets customers to pay a premium for. It can also bring indirect benefits in the form of accumulated knowledge, brand impact, organizational identity, and the forming of an innovative ecosystem. Notice that innovation does not equal invention, which is a common misconception.
When you run a function such as IT that serves the business, I think that your focus should be on your internal customers. How can you empower them to generate more revenues, to move faster, to be more agile? I think that IT should be an integral part of any innovation procedures that exist at the business level, but as a partner and not as the policeman. The question should not be “Can we do this?” but rather “What has to happen for us to be able to do this?” Asking the right questions has a lot to do with the results that you get.
[We asked Ahi to recommend his favorite books on innovation, and he offered three: “Payback: Reaping the Rewards of Innovation” (Andrew, Sirkin, and Butman, Harvard Business Review Press); “Unleashing Innovation: How Whirlpool Transformed an Industry” (Tennant Snyder & Duarte, Jossey-Bass); and “Dealing with Darwin” (Moore, Penguin).]
Q: Mobile’s a particularly hot trend/challenge right now. Should you approach mobile from the perspective of “what the tech can do,” or “what my users want to do”?
AG: Objection! Leading the witness … When considering possible solutions, I believe that one must look at the topic of workforce and customer mobility as a whole, as opposed to focusing on mobile devices and technologies. We must understand the holistic experience from the eyes of the user. It’s not just about the device. It’s about where and when activities will be performed. Are there related activities that should be performed in sequence? How urgent are certain activities compared to others? What happens when the user switches from a mobile device to a desktop? What happens to the overall experience when the user switches from one activity to another?
These are all important aspects of mobility that should be considered if we’re to avoid growing pains of past technologies.
Q: You’ve blogged about the way that some technological innovations make life more difficult on IT (cloud as a challenge to Ops teams). How should IT deal with the disruptive or disturbing aspects of innovative technologies?
AG: The short answer is that they should constantly innovate their way. Running an innovation program within a structured organization that is used to working in a certain optimized way is a challenging task.
My message is that we simply do not have a choice. We either innovate or we become irrelevant. For IT departments, I believe it is that they must innovate or find their responsibilities reduced to a bare minimum and the rest delegated to the business units. This isn’t necessarily the right thing, since a centralistic approach has its advantages in large organizations. The key is to allow this central entity to move with agility and thus keep up with the business.
If your IT is not innovative, then nine times out of 10 the gap between the level of service you get from IT and that of the cloud-offered service is so huge that the employee will simply disregard the risk. People spend most of their waking hours at work, and the tools IT offers them are like extensions of their bodies. Would you not want to be able to significantly run faster or jump higher if you had the chance? Would IT regulations affect your actions in such a case? Wouldn’t you look for another place of work altogether if you were truly not given a choice? And as an employer, what kind of people do you wish to employ? Those who look for ways to jump higher and run faster, or those who move slowly because IT told them to?
Q: Thinking about innovation is inherently experimental. Yet there’s always a high pressure to deliver—to not waste budget on spinning your wheels, to show high ROI. Is this a tension organizations must resolve?
AG: Definitely. “Payback: Reaping the Rewards of Innovation” discusses topics related to this question. Innovation has to be regarded as an investment, and the way it is measured is different than traditional avenues of investment. Innovation projects must be evaluated differently than other types of projects, and organizations must learn to manage innovation in parallel to the mainline business using the right procedures and KPIs. Most innovative projects will be killed very quickly if evaluated using the same parameters as regular projects.
I can give two simple examples. Organizations that run businesses generating hundreds of millions in revenue do not have the patience to allow a new business to gradually and patiently succeed. If after two years it generates $20 million, then even if the potential is $1 billion, the patience is not there. In such a situation, with a struggling economy and legacy customers shouting for enhancements in your $200 million product, where will you put scarce resources? That’s where many organizations fail.
Another example is the incentive system. Think about your sales force. Today it is probably rewarded mainly for selling an existing and well-established portfolio of products. What level of attention will it give to a new product or service that has to be learned anew and has a lot of uncertainty involved? What about five such new products a year—each essentially a sort of experiment? Probably low to none. These things must be considered when attempting to generate innovation in a systematic way.
For more from this interview, read an outtake on the Discover Performance blog. And if you’re looking to increase opportunities for innovation in your enterprise, Gvirtsman suggests starting with the mobile capabilities of HP Anywhere.
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