Doing It Tough
Nicli sees innovation from a lofty vantage point. For many businesses, however, innovation, and timing an investment in technology anywhere on the innovation spectrum, is more of a rolled-up-sleeves affair.
"Innovation comes when a CIO, or anyone else, identifies a business problem or an issue. Then you see an existing or emerging technology to assist with that or rectify it," says Steve Ash, director of IT for Blockbuster in the Asia-Pacific region. "We spend a lot of time actually trying not to be propeller heads. We are a support service to a business that is not an IT business. Because we work close to the business we would have to be blind not to notice their problems, and you can often think of a technology solution to assist with or eradicate the problem."
While not averse to bleeding-edge efforts, Ash says that when it comes to "absolutely bleeding edge, unless we can identify it will work we won't do it". He does admit, though, that in the past the company was prepared to go further out on a limb when "we had more money to spend and the bucket was a lot bigger".
"The disposable spending is not there," he says. "We've never done as much with as little." It is a situation that leaves him very careful, even canny, when it comes to innovation.
"The thing about bleeding edge is that I have no problem being an early adopter, but I'm not keen on being first." Ash says Blockbuster was among the first organisations to work with Telstra installing ADSL, but he protected the company by developing a contract with Telstra where there would be financial penalties for the carrier if the system did not work.
He says that one of the good things about being an early adopter is that, "on the bleeding edge, you can negotiate the price on the technology when it's young because they need you more than you need them".
SIDEBAR: IT Customers Rule Innovation
Users must demand technologies to improve business by Mark Hall
David Moschella's book, Customer-Driven IT: How Users Are Shaping Technology Industry Growth, should send chills down the spines of executives inside the boardrooms of major IT vendors. He brilliantly argues that since the beginning of the computer industry, IT suppliers have been the main drivers behind technology innovation and, therefore, its growth and success. But that game, or "wave", as he calls it, is over. Customers are now the big players in the innovation game, and the likes of Bill Gates, Scott McNealy and Carly Fiorina are mere onlookers.
Moschella rightly labels this a "huge cultural and business change" that's fraught with danger. That's because users are too comfortable letting IT suppliers point them in the right direction with cooler, faster and more efficient technology to improve existing systems. But IT customers no longer need to improve IT for its own sake. Now the reason they need technology is to make their businesses better. And if IT users fumble the opportunity to exploit IT for that purpose, Moschella writes, "IT business will almost certainly stagnate".
And fumble they might. The author points out that users can botch opportunities to exploit technology by refusing to see its value to business. He cites the music industry's opposition to peer-to-peer systems such as Napster as the kind of backward customer thinking that can stifle IT innovation.
He also slams some customers' narrow focus on sifting every IT opportunity through the return on investment sieve. He writes that "customers have to forget formal ROI numbers and simply 'Rely On Instinct'."
Customer-driven innovation is also at risk because IT vendors need to get with the new program and shift their focus to developing products that let users innovate. One other pitfall facing this new wave of technology innovation is that the historical supplier-driven waves are boosted by entrepreneurs motivated by wealth and status. But among users in markets such as health-care and insurance, that motivation is sorely lacking and "will likely remain a serious IT industry market barrier", Moschella writes.
But not all is gloom and doom. Throughout the book, Moschella cites numerous examples that IT users can study to see how other customer innovation of IT has worked. And he also shows where it's likely to play out in the future. For example, in one two-column chart, he identifies 40 areas where customer business innovations are likely to inspire vendor product development and not the other way around.
Nevertheless, Moschella posits that IT's future is no longer centred amid engineers in Armonk or Redmond or even Silicon Valley. It rests with IT leaders in every IT data centre in the world.
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