Innovation is not about avoiding being Blockbuster — it is about looking at where you have an unfair advantage and building a strategy around it. That is why the Chief Innovation Officer (CIO) is such an integral part of a company. A great CIO impacts not only the current CEO’s legacy, but the overall impact of the company.
Formerly, the CIO stood for Chief Information Officer. This person led the charge to ensure that information systems were flowing to meet business goals. Over recent decades, the CIO acronym has evolved to reflect Chief Innovation Officer — and with this new title, a much more hefty task: to set the agenda for the future and digital strategy.
In a world that is rapidly changing, the CIO has a massive landscape to pull from. Current trends in digital transformation include IoT, DevOps, and Big Data. IoT is reforming remote monitoring, preventative maintenance, and asset tracking. A recent study estimates IoT to have an economic impact of more than $11 trillion by 2025. DevOps is allowing the evolution of products at a faster rate than ever. And, Big Data is providing opportunities for companies to have market clarity, product distinction, and, when paired with machine learning, more insightful information to make business decisions.
It’s an exciting time for CIOs as eyes are upon them. As corporations fight to keep their place at the table, it is imperative that heads of innovation are evaluating their companies innovation efforts, assessing legacy systems, and utilizing external innovation resources.
Corporate Innovation Essentials
1. Innovation Audit
Only that which is measured can be improved. That’s why it is critical that the CIO has a very clear understanding of their organization’s innovation systems. Part of this clear understanding is defining what success looks like. What are your metrics? The Harvard Business Review created these Return on Innovation Investment (ROII) metrics so that leaders could assess a company’s innovation capacity.
- Innovation magnitude: financial contribution divided by successful ideas
- Innovation success rate: successful ideas divided by total ideas explored
- Investment efficiency: ideas explored divided by total capital and operational investment
Another helpful tool for an innovation audit is RocketSpace’s Corporate Innovation Assessment. This assessment will give you a temperature check on how your company ranks on the innovation maturity scale, a deeper look into where your organization excels, and identify opportunity areas as well as action steps to accelerate your efforts.
2. Legacy Systems: To Update or Not Update
Digital transformation is not for the light-hearted. Many top tier corporations with thousands of employees face dreadful hurdles in relation to their legacy systems. Modernization of these systems can cost a fortune. Gartner recently estimated that companies will have to spend 3x what they will spend on digital business investments to modernize legacy systems. So, CIOs must evaluate what the core issue is and if it’s in relation to technology or architecture. And, replacement isn’t the only option.
- Encapsulate: to leverage and extend an application’s features and value, encapsulate data and functions in the application and make them available as services via an application programming interface (API).
- Rehost: redeploy an application component to another physical, virtual or cloud infrastructure without recompiling, altering the application code, or modifying features and functions.
- Replatform: migrate an application component to a new run-time platform, but don’t change the code structure or the features and functions it provides.
- Refactor: restructure and optimize existing code without changing its external behavior to remove technical debt and to improve the component’s features and structure.
- Re-architect: materially alter the application code so you can shift it to a new application architecture and fully exploit new and better capabilities of the application platform.
- Rebuild: rebuild or rewrite the application component from scratch while preserving its scope and specifications.
- Replace: eliminate the former application component altogether and replace it, taking new requirements and needs into account.
3. Utilize External Innovation Efforts
In order for corporations to remain competitive, external innovation must become part of the overall business strategy. External innovation allows companies to increase the breadth of idea generation with increased exposure to forward-thinking startups and partnerships. Take note from Procter and Gamble. In 2000, the company outsourced 10% of R&D. Today, 50% of innovation and technology come from external efforts. Here’s how you can begin to grow your innovation initiatives.
RocketSpace’s External Innovation Recommendations:
- Innovation Hub: strategically place your organization in a city and/or co-working space that allows you to access technology trends and ideas.
- Corporate Accelerator: join a corporate accelerator program to collaborate in industry specific pilots with emerging technologies.
- Innovation Partner: work with an innovation consultant to implement innovation methodology and structure into your company to increase innovation ROI.
The CIO stands at the front of the innovation ship and is responsible for the meeting of strategy, structure, and technology at the epicenter of the business. Innovation audits, legacy system reformation, and external innovation partners are just the beginning.
RocketSpace's corporate innovation programs are specially designed to help you conquer your corporate innovation challenges. Through our diverse curriculum, businesses have direct access to new and emerging technology to transform their organization and industry.