THE ROAD TO
INNOVATION IS PAVED WITH
INFORMATION TECHNOLOGY
HOW BUSINESS LEADERS ARE CHANGING
THE RULES OF CORPORATE SUCCESS
IN ASSOCIATION WITH:
CONTENTS
Introduction and Methodology ......................................................................................................... 2
Executive Summary and Key Findings..........................................................................................4
Agility and Nimbleness Are the Most Desirable Values a Firm Can Hold ......................8
The Roots of Competitive Advantage ..........................................................................................12
CEOs Have a Rosier View of IT Strategy Than Tech Chiefs .................................................17
Top Priorities: Mobility and Full Access at Any Time.............................................................23
Chiefs Have Divergent Views on the Role of CIO .................................................................. 26
Digging Deeper: Case Studies........................................................................................................ 29
1 We’re All in This Together: Chief Technology Officer..............................................30
2 View From the Top: CEO .......................................................................................................31
3 Driving Disruption: Vice President of Innovation .......................................................32
4 Best of Both Worlds: Chief Technology and Innovation Officer .........................33
5 Follow the Money: Chief Financial Officer.................................................................... 34
6 Across the Enterprise: Chief Innovation Officer..........................................................35
Conclusion............................................................................................................................................... 36
INTRODUCTION AND
METHODOLOGY
“Innovation” has become the term du jour these days, but it’s just as
likely to evoke uncertainty as to evoke a sense of business progress.
Many business leaders are still struggling to define what innovation
really means, what it can potentially do for their organizations, and
who is most capable of delivering and leading it. There is one thing that
nobody disagrees on, however: the road to successful innovation is
paved with information technology. From data analytics—which opens
up insights on customers and markets—to collaborative technologies—
which open up participation to employees and partners across the
enterprise—to social platforms—which open up communication
with customers—technology is providing insights that would
never have seen the light of day until recently.
2 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
T
o explore how business leaders see innovation advancing their organizations, and
the role technology plays in these efforts,
Forbes Insights, in association with NetApp,
launched a survey of top executives from a
range of industries. The goal of this research is to illuminate leaders’ perceptions on innovation, who should
lead and the role of technology. Forbes Insights also conducted in-depth interviews with half a dozen executives
to provide context for the findings.
The global survey of more than 300 top-level
executive decision makers fi nds widespread agreement
that IT is playing a key role in reshaping and redefi ning innovation. It’s not just IT executives who hold
this point of view, it’s business leaders from across the
spectrum. Along with CIOs and CTOs, many traditionally “non-technical” business leaders—such as
CEOs and CFOs—are also getting deeply involved
in technology decisions. Ironically, IT executives may
even be a bit more cautious than their C-level counterparts in seeing IT as an innovation driver—they are
more supportive of an enterprise-wide approach to
business development.
The survey was fielded in September-October
2013, and received a total of 312 responses from senior
executives. Fifty-three percent of respondents were
C-level, while 47% were senior executives at the director level or above. For C-level respondents, 18% were
CEOs, 23% were CFOs, 22% were CIOs and 23% were
CTOs (14% were another type of C-level executive).
Respondents hailed from fi nance (18%), general management (17%), IT (59%) and operations (6%) roles,
spread across multiple industries including manufacturing (22%), healthcare, fi nancial services, media, energy
and telecommunications (10% each). By region, 11% of
respondents came from the U.S. and from Germany,
10% each from Australia, Canada, China, Japan, the
UK and Latin America, while 7% came from South
Africa and 5% from India. Fully 70% of respondents
worked at companies with more than 1,000 employees.
A majority of the executives in the survey, 88%,
indicate they have some influence over IT decisions
within their organizations. About one-fourth, 26%, say
they have the fi nal say. Seventy-six percent of CEOs
believe the technology decision buck stops with them,
versus 39% of CFOs, 41% of CIOs and 24% of CTOs.
K E Y TA K E AWAY
Many business leaders are still struggling to define what innovation really means,
what it can potentially do for their organizations, and who is most
capable of delivering and leading it.
COPYRIGHT © 2014 FORBES INSIGHTS | 3
EXECUTIVE SUMMARY
AND KEY FINDINGS
The world has changed dramatically over the past five years, and the
rules of business have changed. Businesses are operating in an unforgiving, hyper-competitive global economy. New startups with disruptive
business ideas are being launched every day, across all six inhabited
continents. Thanks to the pervasiveness of information technology, the
barriers to entry into global markets are low. It’s no longer enough to be
an established company with a well-known brand. Every organization,
regardless of size or industry, needs to be innovating, every day and in
every way.
4 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
T
he survey fi nds information technology is
playing a central role in delivering innovation to organizations. Decision makers
from across the spectrum—from the CEO
on down—are embracing IT and its capacity for innovation.
While technology has changed the rules, it also is
providing unprecedented opportunities to advance into
existing markets, or even build entirely new markets.
With technology, companies can work interactively
with employees, partners and customers to design and
release new products or services. The possibilities of
innovation are limited only to the extent of business
leaders’ imaginations.
Business leaders across the board—both within and
outside of traditional information technology functions—agree that IT is a potent tool that needs to be
developed and leveraged to move their organizations
forward into this new reality.
The key to deploying IT as an innovation driver is
the ability to transform to a flexible and nimble infrastructure. In the process, it is opening up innovation
across the enterprise. “All good ideas don’t come from
a research organization or the product management
departments,” says Abhi Ingle, vice president of ecosystem and innovation for AT&T. “They come from
the understanding of people in the front lines of your
business who are interacting with customers, suppliers
and partners. Innovation is done everywhere, not just
in the sanctified halls of a research institution.”
The convergence of technology and new ways of
thinking is creating an electrifying atmosphere for creativity and disruption. “This is the most exciting time
I’ve seen in technology in my 25-plus year career,” says
Roger Pilc, executive vice president and chief innovation officer for Pitney Bowes Inc. “I’ve never seen
a more dramatic impact on business outcomes from
technology as I see today. The combination of mobility, social media and Big Data is helping organizations
transform how they interact with and market to their
customers, and how their customers consume their
products. The potential for opportunity is the strongest
I’ve seen in decades.”
K E Y TA K E AWAY
The convergence of technology and new ways of thinking is creating
an electrifying atmosphere for creativity and disruption.
COPYRIGHT © 2014 FORBES INSIGHTS | 5
KEY FINDINGS
The following are key findings that have emerged from the latest Forbes
Insights survey of top-level executives in large organizations:
Today, executives credit their organizations with delivering agility and nimbleness.
In the years to come, they aspire to capitalize more on analytics for decision making.
Eight out of 10 consider agility and nimbleness as their top-ranked quality at this time, and also consider this to be
their organizations’ most important quality over the next three years. However, they realize that data analytics—
the primary advantage delivered through information technology—is the most essential capability needed going
forward. Currently, better decision making through data is ranked eighth among key values their organizations are
delivering. Over the next three years, they will prioritize this to be the second most sought-after quality.
Being first-to-market and strong customer relationships are seen as the key to competitive advantage.
Technology and digital innovation play supporting roles.
Strategic advantage is all about being first-to-market, satisfying customers and establishing a strong brand.
Executives say these are their top priorities for innovation. Big Data analytics, leveraging digital technologies,
technological innovation and mobile computing are important, but rank further down the list.
Chief financial officers are spurring technology-driven innovation and making the biggest
push for investment in new solutions and approaches.
Technology is now providing unprecedented visibility into business metrics, as well as enhancing financial reporting and insights. This has fueled the CFOs’ vision. CEOs, on the other hand, are less likely to see technology as a
leading strategy, as they continue to focus on broad enterprise approaches. For CEOs, their organizations’ ability
to adapt and change is a top priority, along with improving customer relationships. Interestingly, CIOs are more
focused on delivering business values—such as superior customer service and competitive differentiation—than
their business leader counterparts.
Executives agree that technology is a key component for their organizations’ plans for
growth in the long term.
The majority of executives see their enterprises in the middle of the IT adoption curve. While executives agree
that technology has not played a starring role in the past, a majority, 63%, see information technology as a key
part of their organizations’ long-term plans. However, only 21% see their organizations as being on the “leading
edge” of technology.
6 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
Executives are divided as to what is the best technology investment for business growth.
Customer relationship management ranks as the top type of technology investment that will help deliver business growth, cited by more than one-third of executives. Close to one-third also cite data security and protection.
However, it’s notable that no option gets a majority of the votes.
Making business processes available anywhere, at any time, is the top tech action.
The biggest priority companies are acting on is providing anywhere/anytime access to business processes
(55% say they are taking “significant steps”), followed by increasing customer interaction and enabling more
flexible work environments, while few are as actively concerned with collaboration and the BYOD (bring your
own device) trend.
Executives are divided on the role of chief information officers in the innovation process.
However, everyone agrees that IT leaders need to play a key role in overall corporate innovation.
Aligning IT with the business is seen as the main focus area for CIOs at this time, as indicated by 48% of executives. Driving business innovation is the second-ranked area of focus, cited by 43%. In another 37% of organizations, the CIO also gets directly involved with business strategy. However, CIOs need to continue focusing
on increasing their visibility in the corner office suite. CEOs appear to have their CIOs more pigeonholed into
the typical “CIO role,” of maintaining the IT department—just four in 10 CEOs see the role of the CIO as driving
business innovation.
COPYRIGHT © 2014 FORBES INSIGHTS | 7
AGILITY AND NIMBLENESS
ARE THE MOST DESIRABLE
VALUES A FIRM CAN HOLD
Today, executives credit their organizations with delivering agility and
nimbleness. In the years to come, they aspire to capitalize more on
analytics for better decision making.
8 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
E
xecutives were asked to rank the most
outstanding qualities that currently characterize their organizations, and which
they would like to see emphasized within
the next three years. Overall, more than
80% of executives consider agility and nimbleness as
the top-ranked quality their organizations deliver. Such
swift understanding of market needs and the ability
to adapt to them quickly will continue to be the most
important quality on their radar over the next three
years. Strong leadership follows as the second-ranked
priority, followed by operational effectiveness and competent talent (Fig. A1). (It should be noted that majorities
of executives in all categories sought these values.)
Figure A1. Top Values in Organizations Today, and in Three Years
(In all cases, a majority of executives cited these as sought-after values.)
TOP VALUES
TODAY
IN 3 YEARS
Agility/nimbleness
1
1
Strong leadership
2
5
Operational effectiveness/efficiency
3
7
Competent, expert employees
4
9
Steady stream of IT-enabled business innovations
5
4
Customizable products, solutions or services
6
15
Notably innovative products, solutions or services
7
16
Better decision making through business/customer intelligence
8
2
Efficient, streamlined approach to doing business
9
13
Process optimization
10
11
Competitive differentiation
11
10
Presence in emerging markets
12
18
Collaborative processes
13
6
Exclusivity of product or service
14
19
Best-in-class product or service
15
3
Cost-effective products, solutions or services
16
12
Scalable products, solutions or services
17
8
Global presence
18
14
Superior customer service
19
17
COPYRIGHT © 2014 FORBES INSIGHTS | 9
Notably, executives are moving toward a significant
shift in priorities. Two among the top three qualities in
three years are currently ranked relatively low. Better
decision making through data is currently ranked
eighth. Going forward, executives would like it to be
in their top two.
Likewise, currently, executives are not as concerned
with their companies’ ability to support delivery of
“best-in-class” products or services—it ranks 15th on
the list, but they would like it to be in their top three
in the future.
Across the leading titles covered in the survey, different priorities and perceptions emerge. While just
about everyone in the C-suite agrees that agility and
nimbleness is the most important quality their organizations need over the coming years, chief fi nancial
officers are the greatest proponents of Big Data analytics as the driving force for their organizations (Fig. A2).
10 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
Thus, Big Data—better decision making through
business/customer intelligence—and offering solutions
for developing the best products/services should be top
priorities, as they’re clearly very much on the minds
of senior executives and the C-suite. Strong leadership
and innovation will remain in the top five as important
values to execute these new initiatives.
Every business has its own concept of what innovation should deliver. But progress often follows a
well-defi ned “maturity curve,” as pointed out by Ed
Goldman, chief technology officer and general manager of strategy architecture and innovation for Intel’s
IT Group. “The fi rst discussions about innovation with
business units will always be around their incremental issues. As you mature the relationship, and start to
deliver against those things, the conversation turns to
business strategies.”
Figure A2. Wish List—What Business Leaders Want (in 3 Years)
1
2
3
CEOs
CFOs
CIOs
CTOs
Agility/
nimbleness
Agility/
nimbleness
Agility/
nimbleness
Best-in-class
product or service
79%
79%
84%
82%
Strong
leadership
Better decision making
through business/
customer intelligence
Steady stream of
IT-enabled
innovations
Agility/
nimbleness
76%
74%
78%
71%
Competent
employees
Collaborative
processes
Superior customer
service
Competent
employees
72%
71%
76%
68%
KEY CONCLUSION
In an era of heightened global competition, organizations need to be able to
quickly identify and respond to trends and needs within their markets, respond to
challenges and act on new opportunities. IT and analytics provide the tools and the
means to do so, but their effective application requires leadership. Top executives
acknowledge that technology solutions will soon be enabling innovation on a
greater scale than seen before, and will form the foundation of efforts to achieve
greater agility and nimbleness.
COPYRIGHT © 2014 FORBES INSIGHTS | 11
THE ROOTS OF
COMPETITIVE ADVANTAGE
Being first-to-market and strong customer relationships are seen as the
keys to competitive advantage. Technology and digital innovation play
supporting roles.
12 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
B
eing first-to-market is by far seen as the
most important factor in an organization’s
competitive advantage, as ranked by 60%
of executives. Customer relationships and
strength of brand and reputation round out
the top three elements of competitive advantage (Fig. B1).
Close to half of the executives surveyed state that
leveraging Big Data is an “extremely important” strategy, making this the fi fth-ranked item on the list. Big
Data is increasingly being adopted as a tool for analyzing and understanding customer preferences and
behavior. Despite all the current buzz around mobile
technology, executives seem relatively less concerned
with converting mobile to a competitive advantage.
With most executives acknowledging the key role
technology is playing in innovation initiatives, why
is it still being downplayed as a competitive advantage? Business leaders understand that technology
development is not a competitive differentiator in
itself—rather, it is the collection of tools and methodologies that support innovative activities that enable
faster time to market, more developed customer relationships and stronger brands. As shown throughout
this survey, executives recognize that more has to be
done to boost technology assets, and that technology
plays a supporting role in advancing today’s and tomorrow’s enterprises.
Figure B1. Important Strategies for Competitive
Advantage (Percentage indicating strategy is
“extremely important”)
Being first-to-market
59%
Customer relationships
51%
Strength of brand and reputation
49%
Efficient supply chain management
48%
Leveraging Big Data
(customer and market intelligence)
45%
Ability to adapt and change
42%
Leveraging digital technologies
42%
More efficient information management
41%
Technological innovation
41%
Marketing and advertising
38%
State-of-the-art IT resources
38%
Successful collaborative partnerships
37%
Leveraging mobile technologies
34%
COPYRIGHT © 2014 FORBES INSIGHTS | 13
What does the C-suite focus on? CFOs are driving
technology-based innovation and making the biggest
push for investment in new technologies and data analytics, pointing to the increasing role of technology in
fi nancial reporting. CIOs are more focused on delivering business values—such as superior customer service
and competitive differentiation—than their business
leader counterparts (Fig. B2).
“Compliance really encompasses so much of what
we do in each of our businesses, but we can only be
effective if we have greater and more-effective IT
tools,” says Paul Reilly, executive vice president of
fi nance and operations and chief fi nancial officer of
Arrow Electronics, Inc. “In this slow-growth economic backdrop that we’re all operating in, so much
is centered around centralization and standardization
of functions. But most important is the automation of
processes. It’s great that you centralize and standardize, but if you don’t automate, you’re not going to get
the right level of efficiency. Automation comes from IT
tools and capabilities.”
Figure B2. Wish List—What Business Leaders Want (in 3 Years)
1
2
3
CEOs
CFOs
CIOs
CTOs
Ability to adapt
and change
Being
first-to-market
Customer
relationships
Being
first-to-market
55%
53%
54%
79%
Customer
relationships
Technological
innovation
Strength of brand
and reputation
Leveraging digital
technologies
55%
47%
54%
63%
Strength of brand
and reputation
Leveraging digital
technologies
Leveraging Big Data
(customer and
market intelligence)
Leveraging Big Data
(customer and
market intelligence)
52%
47%
49%
61%
14 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
When looking across the six key industry groups
covered in the survey, distinctions emerge in terms of
innovation strategies. For example, while fi nancial services and technology industry executives place their
highest priority on being fi rst-to-market with product
innovations, those in charge of media operations are
most inclined to focus on the strength of their brand
and their company’s reputation as a competitive differentiator. For telecommunication executives, the top
priority is being able to leverage mobile technologies—
in line with their core product offerings.
Business investment decisions are driven by cost
and savings projections on development/use of technology. Innovation is strongly associated with agility
and productivity, but business leaders still look at the
bottom line fi rst (Fig. B3).
Executives recognize that costs are only part of the
equation. “The costs of innovation are easily measured,
but the benefits are not so easy to quantify,” says Reilly.
“You do need to build a business case to support innovation, but sometimes you have to take risks when you
can’t quantify the benefits. Sometimes that’s just part of
innovation if you want to go forward.”
Interestingly, CEOs are not as concerned about
costs as they are about how new investments will fit in
with existing enterprise systems and processes.
Their C-level associates, however, including CIOs
and CTOs, will put costs and potential savings fi rst.
CFOs are naturally most preoccupied with savings projections from use of the product/service, and CTOs are
most concerned with cost and savings projections for
implementation and usage. Interestingly, CIOs and IT
industry executives are by far the least concerned with
flexibility for length of agreement (Fig. B4).
Figure B3. What Influences Business
Investment Decisions
Cost projections of implementation/use
55%
Savings projections from use of product/service
49%
Level of efficiency expected from vendor
31%
Level of support from vendor
31%
Ease of integration with other
IT systems/processes
30%
Cost of vendor vs. that of competitor
18%
Flexibility for length of agreement
17%
Vendor’s ability to supply
up-to-the-minute upgrades
15%
COPYRIGHT © 2014 FORBES INSIGHTS | 15
Figure B4. What Influences Business Investment Decisions—by Title
1
2
3
CEOs
CFOs
CIOs
CTOs
Ease of integration
with other IT
systems/processes
Savings projections
from use of
product/service
Cost projections of
implementation/use
Cost projections of
implementation/use
45%
58%
49%
76%
Cost projections of
implementation/use
Cost projections of
implementation/use
Savings projections
from use of
product/service
Savings projections
from use of
product/service
41%
45%
43%
63%
Level of support
from vendor
Ease of integration
with other IT
systems/processes
Ease of integration
with other IT
systems/processes
Level of efficiency
expected
from vendor
34%
37%
38%
34%
KEY CONCLUSION
While this survey report focuses on the role of technology in innovation, it’s important
to keep the ultimate strategic goals in focus—leading the market, actively engaging
with customers and building a brand. Business leaders understand that technology
development is not a competitive differentiator in itself—spending money for the
latest and greatest solutions will not automatically generate innovation. Innovation,
assisted by technology, springs from leadership and engagement.
16 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
CEOS HAVE A ROSIER
VIEW OF IT STRATEGY
THAN TECH CHIEFS
Executives agree that technology is a key component for their organizations’ plans for growth in the long term. The majority of executives
see themselves in the middle of the IT adoption curve. While there are
a number of initiatives under way, such as customer relationship management, executives are divided as to what is the best technology
investment for business growth.
COPYRIGHT © 2014 FORBES INSIGHTS | 17
M
ost enterprises consider themselves
to be “moderate” to “conservative” adopters of IT. Top executives
clearly recognize the power of IT to
transform and advance their businesses, but there are a myriad of reasons that many
do not see their organizations as leading the technology wave. There are often skills constraints, as well as
entrenched legacy systems that need to be modernized
and integrated into new platforms. The majority still
see technology—at least as it is deployed within their
enterprises at this time—to be a force within the walls
of their enterprises, delivering efficiencies that will
boost the productivity of their workforce and the effectiveness of their processes (Fig. C1).
The employment of information technology as an
external force for the business—opening up or even
creating new markets, acting as a disruptive force—is
still in the early stages. Yet executives expect to rely on
information technology to enable their organizations
to compete on analytics, which will drive new insights
into customer trends and acquisition. About one in five
enterprises consider their organizations to be leadingedge adopters of information technology.
Even the most tech-savvy enterprises are learning
to structure innovation as they would a startup, with
lots of collaboration along the way. Intel’s Goldman,
for example, says his company concentrates on measuring “yields” from innovation proposals coming
in from employees and partners. “In the proof-oftechnology phase, a lot of it is seeing whether or
not the technologies that are happening can actually
be assembled to solve the problem you’re thinking
about,” he explains. “We’re looking for about a 50%
yield. Then we involve our customers and other people into that process, to make sure that we bring them
in, to make sure it is indeed solving it, and do a proof
of concept with them.” As the innovation moves
through this process, the yields increase as well, he
says. Interestingly, non-tech C-level executives give
their organizations savvier tech ratings than tech
executives do (Fig. C2).
Figure C1. How Executives Perceive Their Organizations’ Use of IT
21%
58%
21%
Leading-edge IT adopter.
We compete at the cutting
edge of innovation, using IT as a
driver for corporate innovation.
We have management
commitment and funding.
Mainstream IT adopter.
We use IT to improve
productivity, product quality
and customer service, but we
generally do not use it to
compete on price or innovation.
Conservative IT adopter.
We compete on the thin edge
of cost margin or economies of
scale. Management regards
IT primarily as a tool for
reducing costs.
18 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
Figure C2. How Executives Perceive Their Organizations’ Use of IT—by Title
14%
14%
13%
21%
CEOs
CFOs
72%
66%
Leading edge
Mainstream
16%
30%
27%
26%
CIOs
43%
CTOs
58%
Conservative
The survey explored the role of technology in
innovation, and perceptions about its role. While executives agree that technology has not played a starring
role in the past, a majority, 63%, see information technology as a key part of their organizations’ long-term
plans (Fig. C3).
“It doesn’t have to be technology that drives
that innovation, but increasingly it is,” says David
Kieselstein, CEO of Penton. “The power of mobile, of
apps, of SaaS platforms, of the web, of data capture and
analysis, is driving almost all of the new product development that we’re doing within the company now,
which is very far from where this company was even
a few years ago. We actually launched eight new products just in the last three to four months of last year,
leveraging technologies. We also augment the chief
data officer’s management suite with a world-class
engineering team.”
Figure C3. Importance of Technology to Business Planning
(Percentage “strongly agreeing” that technology is...)
...a key component of my organization’s plans for growth in the long term (beyond 18 months)
..a key component of my organization’s plans for growth in the short term (coming 12-18 months)
...a key contributor to my organization’s past ability to succeed and grow
63%
47%
28%
COPYRIGHT © 2014 FORBES INSIGHTS | 19
Figure C4. Best Technology Investments
for Business Growth
Customer Relationship Management (CRM)
34%
Data security and protection
32%
Analytics tools (leveraging Big Data,
capturing metrics, etc.)
30%
Customer service and support
30%
Cloud computing capabilities
27%
App-development capabilities
25%
IT storage
22%
Digital marketing and
customer communications
17%
Enterprise applications
14%
Digital technologies for
internal collaboration
13%
Executives were asked about the types of technologies that are delivering the best results for their
organizations. Customer relationship management
(CRM) systems rank as the top type of technology
investment that will help deliver business growth, cited
by more than one-third of executives. The ability to
better engage with customers, and understand their
requirements across a life cycle, means greater opportunities to reach new markets (Fig. C4).
20 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
In tech circles, security solutions are often seen as
necessary components to prevent damage from data
breaches. Typically, these solutions are not seen as
adding to business growth or productivity. However,
executives take a different view on these types of solutions, ranking them second on the list of technology
delivering value—close to one-third cite data security and protection as their best investment for business
growth. This shows an understanding that data security solutions deliver potential savings far beyond the
initial investments. The costs of data breaches include
staff time to audit and trace breaches, potential fi nes
from government agencies, costs incurred for notifying
affected parties, and potential loss of business due to
lack of confidence from customers or potential customers in the security of their information.
Big Data analytics tools are also a top choice
among executives as savvy investments for business
growth. Executives see it as a corporate capability that
will help them glean insights from a range of information coming into their organizations, including
machine-generated data from sensors and applications,
user-generated data from social media, on-site collaborative environments and productivity applications, as
well as “traditional” structured transactional data.
While cloud computing and analytics are key initiatives for sizable segments of organizations, there
is also growing interest in related areas. “Today, we
have quite a few efforts around the Internet of Things
going on,” says Intel’s Goldman. “We also are using
analytics to make user experiences more dynamic in
the future. We try to stay in the lead with technology to figure out whether there a business case for
it.” However, Goldman adds, even though Intel is a
leader in technology adoption, the company recognizes
that technology is one of several tools in the innovation process. “Technology is an ingredient of the set of
activities,” he says.
For most of the executives—inside and outside of IT—
customer relationship management is consistently viewed
as the technology area that delivers the greatest value to
business. CTOs, on the other hand, take a different view,
suggesting that analytics tools are the best way organizations can spend their technology dollars (Fig. C5).
Investment priorities differ across the major industry segments. For example, CRM does not rank high
among IT or media industry executives, who tend to
see Big Data analytics tools as their most urgent investment area. Media executives also see IT storage as a key
investment area, and believe outsourcing IT is a key
innovation strategy that often opens up new opportunities. Outsourcing is part of “achieving the right
balance with technology,” says Penton’s Kieselstein.
“People will swing from left to right, from feeling like
they need to have entirely captive staffs to outsourcing
everything. I think the answer’s usually somewhere in
the middle. We typically go with a 70%-30% blend,
with 70% of our IT capability coming from within.
There are always going to be needs for external support, and you should be open to that. You’ll have
short-term bursts of volume, you’ll sometimes have
very specific technical needs, and certainly it’s very
expensive to always be running at 100% capacity.”
Because innovation is an informal process with
unpredictable results, traditional cost-benefit analysis
often can be counterproductive. “We don’t do costbenefit analysis up front,” says Rickey Burks, senior
vice president and chief technology and innovation
officer at USAA. “We will go far enough to put something in, and put analytics in it, and do a look back
to see what value we’re getting. So we’re allowed
to go far enough to really explore a particular idea.
Figure C5. Best Technology Investments for Business Growth—Preferences by Title
1
2
3
CEOs
CFOs
CIOs
CTOs
Customer Relationship
Management (CRM)
Customer Relationship
Management (CRM)
Customer Relationship
Management (CRM)
Analytics tools
(leveraging Big Data,
capturing metrics, etc.)
41%
50%
41%
34%
Data security
and protection
Customer service
and support
Analytics tools
(leveraging Big Data,
capturing metrics, etc.)
Data security
and protection
38%
37%
30%
34%
Customer service
and support
Data security
and protection
Data security
and protection
App-development
capabilities
34%
26%
27%
29%
COPYRIGHT © 2014 FORBES INSIGHTS | 21
We don’t have a basis to say what the value’s going
to be. That’s going to empower folks to be creative.
You can’t do everything that way, but a number of
our ideas, we actually move them into production, we
gather the data of what we’re seeing coming back. And
then we stop and work with our business partners to
see if this is something we want to scale.”
Projected 2014 IT spending tracks similarly to the
IT adoption curve. Close to a third of executives expect
their IT purchasing to increase next year, while 23%
expect it to decrease (Fig. C6). The telecommunications sector will see the most robust spending increases
during 2013, with more than two-fi fths of executives
within this industry foreseeing spending boosts.
Figure C6. Planned Increases in 2014 IT Spending
Decrease by 10% or more
1%
Decrease by 5% to 9%
1%
Decreased by less than 5%
21%
Stay about the same
47%
Increase by less than 5%
15%
Increase 5% to 9%
Increase by 10% or more
10%
5%
KEY CONCLUSION
Executives have different opinions on the role of IT in business growth. But they all
agree IT is an essential part of this growth. Most see their organizations as lagging
or mediocre in their ability to leverage technology to achieve innovation—and are
willing to make the necessary investments to change that.
22 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
TOP PRIORITIES:
MOBILITY AND FULL
ACCESS AT ANY TIME
Customer collaboration and easy, anywhere/anytime access to business
processes are the top technology expansions recommended by executives. Encouraging—and not fighting—the “BYOD” (bring your own
device) trend also ranks high on the list of suggested actions.
COPYRIGHT © 2014 FORBES INSIGHTS | 23
T
he biggest priority companies are acting
on is providing anywhere/anytime access
to business processes—more than half say
they are taking “significant steps” to open
up their processes, and technology helps
provide needed visibility and manageability. This is followed by increasing customer interaction and enabling
more flexible work environments. At the same time,
relatively few are as actively concerned with collaboration and use of any device (Fig. D1).
Executives within the IT and media sectors are
concentrated on creating flexible work environments, while fi nancial services executives are focused
on increasing customer interaction. The remainder of
the industry categories are focusing on open access to
technology.
Effective business innovation through technology
requires that organizations do a good job looking after
the basic IT requirements, says Goldman. “You have to
run the systems in order to be able to do projects and
activities to advance the business. If you run your systems well, you move to the next level, which allows
you to partner and innovate with the business. And if
you fail on any of the lower levels, the conversation
goes right back there. Innovation is part of an advanced
relationship with your business lines.”
So how do executives educate themselves about
innovation, to identify their priorities? Overall, information about innovation tends to come from traditional
sources. Today’s innovation may encompass transformation to the digital enterprise, but ironically, business
leaders still turn to traditional venues for more information and enlightenment on the topic. Senior executives
turn in the largest numbers to business print publications
to stay up to date with new ideas or ways to innovate. A
majority report these sources as the way they stay on top
of trends, followed by executive conferences or events,
and general interest publications (Fig. D2).
24 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
Figure D1. Strategies for Expanding
Technological Capabilities (Percentage
reporting they are taking “significant” steps)
Provide anywhere/anytime access
to business processes
55%
Increase customer interaction
47%
Enable greater collaboration with customers
44%
Enable more flexible work environments
43%
Expand visual collaboration via video
33%
Promote greater collaboration internally
33%
Enable greater collaboration
with suppliers/partners
30%
Allow use of “any device”
29%
Figure D2. How Executives Keep Up-to-Date
With New Ideas or Ways for Their Companies to Innovate
Business print publications
77%
Executive conferences or events
67%
General interest online publications
61%
Technology print publications
54%
General interest print publications
51%
Technology vendors
51%
Reports from analyst firms
48%
Trade shows
47%
Industry- or topic-specific blogs
47%
Peers or colleagues
Social networks
46%
40%
KEY CONCLUSION
The mobility wave is sweeping through enterprises, and with it, greater access to
technology resources for employees at all levels. This opens up the door to even
greater and more widespread innovation as the workforce gets involved. At the
same time, executives have a wide range of resources available to help them elevate
their roles as catalysts of this new innovation.
COPYRIGHT © 2014 FORBES INSIGHTS | 25
CHIEFS HAVE
DIVERGENT VIEWS ON
THE ROLE OF CIO
CFOs are leading the charge for more technology-driven innovation.
Executives are divided on the role of CIOs in the innovation process.
However, everyone agrees that IT leaders need to play a key role in
overall corporate innovation.
26 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
T
he survey revealed the attitudes of various
business leaders toward the role of technology in innovation, as well as how they
perceive the CIO’s role changing. For the
CIO’s job these days, it’s all about business.
Aligning IT with the business is the main focus area for
CIOs, as indicated by almost half of executives.
While there are some differences in perceptions
about the CIO’s role in the evolving enterprise, some
organizations are embracing the partnership role they
need to play. For example, at Pitney Bowes Inc., the
CIO is an equal partner at the management table, says
Roger Pilc, the fi rm’s chief innovation officer. “Our
CIO [chief information officer] is an incredibly important partner to my own organization, in terms of
providing the technologies and the capability that will
help us innovate and create new products for our customers more quickly. The same thing is absolutely true
for operations, and services and support, as well as for
the marketing and sales parts of our organization.”
Accordingly, driving business innovation is now
the second-ranked area of focus for CIOs. In addition, the CIO often also gets directly involved with
business strategy. The leading IT-centric area of
focus—improving IT performance—pops up only in
sixth place among the focus areas (Fig. E1).
Executives across the various categories have differing perceptions as to what key roles CIOs will be
playing in innovation. CEOs appear to have their
CIOs more pigeonholed into the typical, IT-centric
“CIO role”: namely, aligning IT with the business and
improving IT performance. Overall across the C-suite,
however, the CIO is the one seen as the innovation
leader (Fig. E2).
Some executives believe strongly in the CIO’s role
as a business partner and advisor to the organization.
“IT is a true business partner of our organization,”
says Paul J. Reilly, executive vice president of fi nance
and operations and chief fi nancial officer of Arrow
Electronics, Inc. “IT has transitioned to be an integral part of most organizations. For us, there is a new
level of sophistication for our IT function. And that’s
something that our CIO brings as a partner, providing thought leadership around social media, clients and
converting data to information.”
Figure E1. What CIOs Should Be Focusing On
Aligning IT with business
48%
Driving business innovation
43%
Refining business strategies
37%
Identifying opportunities for differentiation
29%
Forging IT/business partnerships
29%
Improving IT performance
28%
Ensuring cost control for IT purchases
21%
Leading technology change efforts
20%
Ensuring cost control for the organization
12%
COPYRIGHT © 2014 FORBES INSIGHTS | 27
Figure E2. What CIOs Should Be Focusing On—Opinions From the C-Suite
1
2
3
CEOs
CFOs
CIOs
CTOs
Aligning IT
with business
Identifying opportunities
for differentiation
Refining business
strategies
Driving business
innovation
62%
37%
49%
71%
Improving IT
performance
Refining business
strategies
Aligning IT
with business
Aligning IT
with business
45%
37%
46%
55%
Identifying opportunities
for differentiation
Driving business
innovation
Driving business
innovation
Forging IT/business
partnerships
34%
34%
41%
32%
KEY CONCLUSION
The CIO’s role is rapidly changing—from caretaker of technology assets to partner
in business growth. As organizations increasingly turn to information technology to
successfully carry out their digital journeys, top executives across the board recognize
that technology paves the way forward for their organizations, and that CIOs need to
take a leadership role.
28 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
DIGGING DEEPER:
CASE STUDIES
The six case studies that follow provide context, texture and examples
that illuminate the findings of this study.
1 . I N T E L C O R P O R AT I O N
2. PENTON
3 . AT &T
4. USAA
5. ARROW ELECTRONICS
6. PITNEY BOWES
COPYRIGHT © 2014 FORBES INSIGHTS | 29
1
I N T E L CO R P O R AT I O N
WE’RE ALL IN THIS TOGETHER:
CHIEF TECHNOLOGY OFFICER
Intel Corporation is one of the world’s leading designers and manufacturers of integrated
digital technology platforms, used in a range of applications, such as personal computers,
data centers, tablets, smartphones, automobiles, automated factory systems and medical
devices. Revenues were $53 billion in the most recent year.
Innovation is not something that comes out of a structured process, but out of more-spontaneous events.
“There’s no simple, single process of ‘follow these eight
steps and innovation will occur,’” says Ed Goldman, chief
technology officer and general manager of strategy architecture and innovation at Intel IT.
Intel seeks to identify and nurture innovation opportunities through an internal venture capital firm. “Think of it
in terms of a pipeline, and trying to get yields at different points in the pipeline. Within that innovation path,
we break it up into four phases—basic research, proof of
technology, proof of concept, transition to production.”
Goldman works with an internal group within Intel called
IT Labs. While innovation happens across the company,
Goldman’s group “is more focused on what technologies
are coming, and how might they lend themselves to solving some of our big problems, and trying to evolve the
process such that we can go solve all the issues that will
create a larger business value for Intel.”
Goldman’s IT Labs works with other teams that focus on
product innovation. The role of IT Labs is to introduce a
technology perspective to new ideas. “We partner with
them, so we have interaction across both of those environments,” he says. “Our goal is, how do we make Intel
better, faster, cheaper, in delivering what we do for our
products and services, from an Intel IT perspective.”
K E Y TA K E AWAY
Innovation is not something that comes out of a structured process,
but out of more-spontaneous events.
30 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
2
PENTON
VIEW FROM THE TOP: CEO
Penton is a professional information services company that engages and informs millions
of professionals every day, helping them decide how to grow and solve their most critical
business challenges. The company runs 65 trade shows and conferences, 145 digital properties, 20 paid data products and 86 print products in five core, scaled sectors.
Many chief executive officers are incorporating a new label in their job descriptions—technology leader. While this
doesn’t necessarily mean CEOs will be learning to write
code or run quality assurance tests anytime soon, the top
executive needs to have a grasp of the power of technology. “You can’t afford as a CEO to pretend to know what’s
going on vis-a-vis technology anymore,” says David Kieselstein, CEO of Penton. “You really need to have a least a
15,000-foot view and understanding of what’s going on.
You can’t truly be expert, but you need to understand the
business dependencies created by leveraging technology,
how to shape technology for user needs, how to create
built-for-purpose opportunities, versus kitchen sink. If
you’re not at least reasonably well versed in that, you’re
going to miss opportunities, you’re going to miss competitors eating your lunch, and ultimately the business is
going to suffer.”
The product portfolio keeps rapidly evolving, in large part
due to Penton’s increasing immersion in technology-driven innovation. “In the last two years, almost 40% of the
team is new, because we’re adding new roles and new skill
sets that are oriented towards knowing how to use and
leverage technology. Getting insights to our customers
and leveraging tech and data to launch new products is
so critical to us at Penton that we recently created a new
role of chief data officer,” Kieselstein says. “Whether it’s
people that are experts at engaging the social community, user interface, SEO and digital product development,
we’re bringing in a lot of new energy.” This isn’t limited
to purely technical talent either, he adds. “In sales, we’re
bringing strategic sellers into the organization who know
how to sell strategic marketing services packages—which
is not off the rack anymore. These packages are more
complicated and more strategic.
Technology is playing a key role at Penton, which has
evolved from publishing company to a leading digital and
data services provider. “We have evolved significantly,”
says Kieselstein. “Technology is driving all of the innovating we’re doing, for the most part. The complexion of the
company has changed a lot, and technology has played a
big role in that transformation.”
“When you’re thinking about accelerating your use of
technology in an organization, you really need to be
thoughtful about not just the technological skill base
you’re bringing, but also the structure—how that group is
going to interact with the rest of the organization,” adds
Kieselstein.
K E Y TA K E AWAY
Many chief executive officers are incorporating a new label in their
job descriptions—technology leader.
COPYRIGHT © 2014 FORBES INSIGHTS | 31
3
AT &T
DRIVING DISRUPTION:
VICE PRESIDENT OF INNOVATION
AT&T is a provider of global telecommunications services, including wireless communications, local exchange services and long-distance services. Revenues were $127 billion in
the most recent year.
“The work plan we adopted two to three years ago was to
radically open up the workspace, everything on wheels,
with no assigned seating or desks or offices,” says Abhi
Ingle, vice president of ecosystem and innovation at AT&T
Inc. “This is very different from our history, but it has actually now been adopted by our corporate real estate team
as the work plan for AT&T’s workspace as we head toward
the year 2020. All the new remodels are happening in this
philosophy.” Along with open, informal workspaces, the
management of the AT&T Foundry is based on the Agile and Lean methodologies that have been developed
and refined over the years within IT environments. And
AT&T’s technology leaders have taken note. “Our Big Data
and emerging business channels teams have actually
co-located in the Foundry, and are taking on completely
Foundry-based methodologies, including the workspace,
the rapid, short design, the user-centric, design-oriented
Agile sprint,” Ingle says. “We even have a word for that—
when we want to get things done fast, quick, innovate, we
say, let’s just ‘Foundry’ it.”
The AT&T Foundry is part of an effort within AT&T intended to open up the innovation process, says Ingle. “We
have a quarter-million employees. That is a strength, but
it’s also a weakness—if a product manager tried to listen
to 250,000 people who were trying to suggest ideas, he
would never succeed.” That’s why AT&T introduced The
Innovation Pipeline, or “TIP.” TIP is “a crowd-sourced program that gets employees to sign up, collaborate online
and come and pitch their ideas, and people essentially
crowd-reviewed their ideas.” Currently, up to 130,000
of AT&T’s employees participate in the program, Ingle
says. “At the end of every quarter, we essentially do an
American Idol on them. Think of American Idol meets
Shark Tank—but a much kinder, gentler Shark Tank. The
best ideas, the actual people who put them in get to pitch
them to some of the most senior people at AT&T.”
K E Y TA K E AWAY
Along with open, informal workspaces, the management of the AT&T Foundry
is based on the Agile and Lean methodologies that have been developed
and refined over the years within IT environments.
32 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
4
USAA
BEST OF BOTH WORLDS:
CHIEF TECHNOLOGY AND
INNOVATION OFFICER
USAA is a diversified financial services group of companies offering banking, investing
and insurance to people and families that serve, or served, in the United States military.
The organization serves 10 million members, with annual revenues of $20.7 billion in 2012.
At the United Services Automobile Association (USAA),
one of the largest North American insurance companies,
innovation has always been percolating throughout the
organization, but now technology is being employed to
harness this innovative energy. Such an effort requires
leadership from across the enterprise.
“The relationships you build across the organization are
probably the most critical to innovation,” says Rickey
Burks, SVP and chief technology and innovation officer.
“It’s more critical than your technical skills. It’s in the relationships of being open and living out with the business
folks, and understanding what business challenges are
there. Because that’s where the creativity begins.”
Over the past year, USAA has created a “more formal
innovation organization that helps get us focused on innovation for our business, for our members, for our employees,” he explains. In his relatively new job role, Burks
reports to the company’s chief information officer with his
“chief technology officer hat” on, as well as to the chief
administration officer with his “chief innovation officer
hat.” He observes that the dual role brings together two
teams, one of which is “thinking innovatively and about
disruption,” while a companion team is “thinking about
standards and technology, and how do we keep things
operationally healthy and moving along.”
K E Y TA K E AWAY
At the United Services Automobile Association (USAA), one of the largest North
American insurance companies, innovation has always been percolating throughout the
organization, but now technology is being employed to harness this innovative energy.
COPYRIGHT © 2014 FORBES INSIGHTS | 33
5
ARROW ELECTRONICS
FOLLOW THE MONEY:
CHIEF FINANCIAL OFFICER
Arrow Electronics is a provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions, including
materials planning, new product design services, programming and assembly services,
inventory management, reverse logistics, electronics asset disposition and a variety of
online supply chain tools. Revenues were $21 billion in the most recent year.
Technology-driven innovation is reaching an important
corner of the enterprise not typically known for innovation—finance executives. The most logical starting point
and greatest business value for financial executives is leveraging the power of data analytics to look at information in new ways.
“Finance teams are usually very good at generating data,”
says Paul Reilly, executive vice president of finance and
operations and chief financial officer of Arrow Electronics, Inc. “But we need to do better at generating information from that data.” At his own company, Reilly says he
has been using data analytics for the past two years for
corporate auditing purposes. Employment of IT tools in financial reporting is helping the company “identify, ahead
of the curve, areas of geography opportunity and transaction execution trends,” he says.
“The other thing we’re using around technology is data
analytics,” he adds. “We’re evaluating not just short-term
trends, but macro trends over the long term in the global
economy. But that evaluation is being done at a countryby-country level, as we begin to try to match what our
strengths and capabilities are to developing markets and
developing geography.”
In the process, finance is taking a new role in enterprises
by using technology tools to facilitate and promote innovation. “One of the things that finance teams are good at
is looking backwards—’here are the results of last month
or last quarter,’” Reilly explains. “Innovation is possible
when we can look forward as well. What does this information tell me about trends? Do we speed up or slow
down as an organization? Do we identify opportunities
to be more successful in the marketplace? Can we afford
to be more aggressive? It’s about telling the story of the
numbers. We can’t do much about the past, but we can
certainly learn from the past, and we certainly can use
that to understand what the future may be for us, and to
capture the future that we want.”
K E Y TA K E AWAY
Technology-driven innovation is reaching an important corner of the enterprise
not typically known for innovation—finance executives.
34 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
6
PITNEY BOWES
ACROSS THE ENTERPRISE:
CHIEF INNOVATION OFFICER
Pitney Bowes Inc. is a global provider of software, hardware and services to enable both
physical and digital communications and to integrate those physical and digital communications channels. The company offers a range of equipment, supplies, software, services
and solutions. Revenues in the most recent year were $3.9 billion.
At Pitney Bowes Inc., innovation is an enterprise-wide initiative. Roger Pilc, chief innovation officer at Pitney Bowes,
says his newly created position includes all the product development across all the business units: more than 1,000
engineers across many geographies, as well as a strategic
technology and innovation center, and enterprise growth
initiatives and technology alliances. Innovation is one of
the key pillars of Pitney Bowes’s strategy, and innovation
is the combination of business insights and technologybased invention, so he orchestrated the function to be
multifaceted. “It crosses functions, and it crosses business
units,” says Pilc. “It is a very holistic approach.”
Pilc recommends an “outside-in approach” to innovation: “Be very customer- and partner- and sales-centric
in terms of the prioritization of innovation. An innovation
is a combination of business, technology and invention.”
Pilc also advocates having the appropriate management
systems in place—the process “of identifying ideas, validating them, prioritizing them, commercializing them and
then rolling them out in great business scale.”
K E Y TA K E AWAY
Innovation is one of the key pillars of Pitney Bowes’s strategy, and innovation
is the combination of business insights and technology-based invention.
COPYRIGHT © 2014 FORBES INSIGHTS | 35
CONCLUSION
Technology, which is producing so much disruption and so much
opportunity, also serves as a key tool to facilitate innovation. And continual innovation at every level is now the crucial ingredient that allows
businesses to not merely survive but thrive.
ACKNOWLEDGMENTS
Along with data provided in the survey, Forbes Insights spoke with senior executives at six leading
corporations about their innovation strategies, along with the role of technology.
Forbes Insights and NetApp would like to thank the following individuals for their time and expertise:
Rickey Burks, Senior Vice President and Chief Technology and Innovation Officer,
United Services Automobile Association (USAA)
Ed Goldman, Chief Technology Officer and General Manager of Strategy Architecture and Innovation, Intel Corporation’s IT Group
Abhi Ingle, Vice President of Ecosystem and Innovation, AT&T Inc.
David Kieselstein, Chief Executive Officer, Penton
Roger Pilc, Executive Vice President and Chief Innovation Officer, Pitney Bowes Inc.
Paul J. Reilly, Executive Vice President of Finance and Operations and
Chief Financial Officer, Arrow Electronics, Inc.
36 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY
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