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Champy: Get proactive about innovation

By James Champy 14 Jun 2005 | SearchCIO.com Digg This!     StumbleUpon     Del.icio.us

That means ways of finding new products, services and businesses to fuel growth. As a CIO, you can find opportunities and become an active innovator, but you must sharpen your skills, or you will be viewed as strictly a service provider.

Begin by recognizing that corporate innovation is not limited to producing new or enhanced products and services. When thinking about innovation, you also need to think about the business model, processes within the organization, or the way customers experience your company.

Business model innovation

Michael Dell did not invent the laptop computer, but he did invent a new business model for the industry: Build computers to order and fill orders by operating a highly automated and digitized supply chain. IT is the great enabler of these changes. Dell saw the inefficiencies in the computer industry and found a new way of producing profits.

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IT managers are well positioned to challenge conventional ways of doing business. Ask yourself these questions: Can redundancies be eliminated to reduce costs? Are there ways to consolidate operations and reduce inventory to redeploy capital to growth opportunities? Can your business processes and those of your customers be linked to reduce errors and increase the speed at which orders are filled and problems solved? And can you be so radical in these approaches to achieve what Dell achieved -- a new way of operating and dramatically lowering the costs of doing business?

Process innovation

This is becoming increasingly important. In many industries, how this is executed is the basis of competition. For example, a seat on one airplane is not much different from the seat in the same row, same aisle, on another. But how an airline operates and the uniqueness of its processes can be a powerful differentiator. Airlines like JetBlue are doing just that -- operating with innovative processes.

On the other hand, a company that has bad processes -- from how people are hired to how orders are placed, how bills are paid, how products are made and how the phone is answered -- will not be able to execute well. Eventually, breakdowns occur, with customers, employees and shareholders.

IT managers have always been best positioned to look across the processes of a company and see opportunities for improvement and innovation. They see the business from a workflow perspective. But too often, IT managers see process change from only a technology perspective (the systems that enable the process change).

Product innovation

IT provides the opportunity to create new and innovative products. Before the onset of the Internet, no one would have anticipated the popularity of services like Vehix.com for information on purchasing automobiles, MapQuest for driving directions or Travelocity for getting the best travel deal. There is probably an adjacent IT-enabled business that could add to the value of what your company now produces. It's time to start looking, if you haven't already.

Experience innovation

One of the most overlooked opportunities for innovation is in how your customers experience doing business with your company. Today, a lot of that experience is based on what happens when a customer touches your technology -- from the way a question is answered on a customer help desk call to information and services available on your Web site. I am a user of several of Fidelity Investment's financial services products. My experience in dealing electronically with Fidelity is also a pleasure, mostly because it maintains information about me and my past transactions in accessible ways.

I don't have to worry about keeping paper records. But when I do need a live discussion, it's easy to get access to a real expert. It's all in the elegance of design, and never before has a customer's experience been based so much on information technology. Innovation has moved to the center court for the IT manager.

It's challenging stuff, but CIOs have to take a more active role in identifying and creating corporate innovation, and they must be accountable for enabling growth and creating a competitive organization.

James Champy is chairman of Perot Systems Corp.'s consulting practice and head of strategy for the company. He is also the author of the best-selling books Reengineering the Corporation, Reengineering Management, The Arc of Ambition and X-Engineering the Corporation.

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