Innovation nation

July 2013

Business man writing on whiteboardInsanity is doing the same thing over and over and expecting a different result says Zahid Jiwa, VP UK&I, OutSystems.

From the laptop to the laws of gravity, British ingenuity has shaped our world and we have a strong history of championing new ideas, innovations and inventions.

Britain’s capacity to excel in research and development has continued to be at the heart of our economic growth and today we are still one of the world’s leading innovators.

As we slowly start to climb out of recession, growth prospects remain at the mercy of continued budget constraints combined with a growing IT skills shortage. Thinking about our legacy as a powerhouse of discovery and invention, it is clear to me that the only way that we can get out of today's economic malaise is by continuing to invest in sustainable innovation. However, where IT is concerned, I think that’s easier said than done.

But before we talk in more detail about innovation, I think I need to stress that innovation doesn’t need to be ‘big bang’ or about radical change or an amazing new invention. Innovation is simply a new way of doing something. Whether a new feature, a new service or a new process, innovation is often about incremental progress, which enables the business to work more effectively and efficiently.

According to CIO Magazine, business process improvements and increasing IT capacity to drive innovation is top of the list of most frequently cited IT management priorities. However, according to IT Wire.com, over 25 per cent of all CIOs also list innovation and technological change as one of the biggest challenges facing them in 2013.

So why does IT struggle to innovate? Or to put it another way, why does the business perceive that IT can’t innovate?

I believe there are two mitigating factors. The first is that according to Gartner, at least 80 per cent of the IT budget is still spent on keeping the lights on (KTLO). So if the total spend on enterprise-wide IT is likely to be $2.68 trillion (as cited in a recent New York Times article), and 80 per cent of this spend is allocated to what is essentially maintenance, you get the picture in terms of how much KTLO costs.

The second factor impacting IT’s ability to innovate is around the accumulation of new service or change requests made by business units, which puts a massive strain on IT resource. This creates an inevitable IT backlog that becomes a crippling problem and can result in a failure to deliver.

IT departments are then often seen to be incompetent, slow, and by default unable to support innovation. The real failure here, however, is actually a lack of budget and resource, not incompetence or an inability to innovate.

To further compound the problem, current techniques and tools used for delivering enterprise systems are expensive as well as hard to use and maintain. When the business needs a new application, IT typically responds in one of four ways. It buys and customises a packaged application, it builds a customer solution using in-house developers or system integrators, it rents a cloud based solution that don’t need IT’s involvement, or it simply does nothing.

When IT chooses to do nothing it causes its relevance to decrease even further and results in the creation of shadow IT - applications built, installed or rented outside of IT’s control. All approaches are replete with cost, control and scalability issues technology debt grows and backlogs get bigger and IT departments get further marginalised unable to help the company innovate. 

Yet despite the futility of these approaches, time and again, organisations continue to walk down the same path and expect to arrive somewhere different. This has to change; IT has the ability to innovate in so many ways, if only given the chance.

If we redefine the problem, the root cause of these IT troubles is all to do with the cost of changing software. Delivering new applications is time consuming and expensive. Additionally the cost of change is not limited to the delivery of the final version, as soon as the application goes live it immediately goes into maintenance mode.

According to Gartner, when looking at the lifetime cost of building or buying a new application, on average 42 per cent of the initial cost of the application is spent year on year maintaining that application, therefore application maintenance is the real problem. In order to solve this problem IT departments need to take control of the cost of change. 

This requires a complete transformation whereby IT redefines its approach to every application in its portfolio and strategically thinks about how to respond to business requests. This transformation won’t happen overnight but gradually it can take the IT department from being a scapegoat and an irrelevance to a centre of excellence and innovation.

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  • 1
    fRAN wrote on 17th Jul 2013

    Thank you - would be useful to follow this up by identifying the push strategies, to get the wheels out of the rut. We all konw what needs to be done, but getting high level sponsors to buy in seems to be the sticky mud in around the wheels

    (on a lighter note - in respect of MY desktop it would be great if doing the same thing every day DID achieve the same result - Microsoft take note!)

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  • 2
    Colboll wrote on 18th Jul 2013

    Mmm the insanity quote , plagiarises Einstein !!

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  • 3
    Cliff Redvers wrote on 29th Jul 2013

    @fRAN - this is a big discussion but for me revolves around an IT Managers appetite for change: do they want to Lead or be Led, Innovate or Follow, Explore or Browse, Build or Buy etc. Maybe you can help your organisation and rewrite a Microsoft or Salesforce type application that is driving you mad, for a lot less than you think!

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