How CIOs can deliver success for the enterprises

After years of cost-cutting and efficiency campaigns, business leaders in companies of every size and across the industry spectrum are refocused on top-line growth — and they're seeing innovation as the means to achieve it. With globalisation, commoditisation and technological advances all forcing significant change on the business, these organisations are being compelled to act in order to gain competitive advantage. They know that exponential growth lies ahead for those who can lead the innovation movement and seize opportunities to differentiate themselves.

IBM's new white paper, "CEOs are expanding the innovation horizon: Important implications for CIOs," highlights valuable insights from the IBM Global CEO Study 2006. The study results have important messages for all business leaders but should be of particular interest to CIOs, who have long been counted on to support and enable corporate innovation efforts.

IBM’s Global CEO Study 2006 was conducted to understand how CEOs view innovation, to capture current insights and to learn what is on their innovation agendas. It tapped a broad cross-section of CEOs to understand how companies are enabling innovation and where they are focusing their innovative energies.

The study indicates that CEOs are expanding the innovation horizon. In fact, there is a categorical shift toward a more expansive and unconventional view of innovation, as well as a need for a greater mix of innovation types. For CIOs, this means a focus on driving:

• Business model innovation
• Collaboration, both internal and external
• Business and technology integration

While CEOs still believe that product, service and operational innovations are important; they feel that innovation must also be applied to a company's very core — to the way it does business. CEOs deemed business model innovation vital to creating new and differentiating value for their companies.

CEOs viewed internal and external collaboration as an essential prerequisite for innovation. They felt that successful collaboration among employees and internal organisations is only part of the innovation equation. CEOs are increasingly relying on external sources for their most innovative ideas, admitting that partnering outside the organisation has resulted in higher revenue growth and an impressive array of innovative solutions.

Much has been written about the gap in alignment between the information technology (IT) organisation and the rest of the business. CEOs in the study voiced the need to go beyond simple alignment and close the gap completely. They see the integration of business and technology as imperative for innovative efforts to yield their highest potential. IBM's financial analysis, conducted as part of the study, reinforced this view. It showed that organisations which were effective at integrating business and technology insight delivered significantly better financial results (in terms of revenue growth and operating margin). In general, CEOs believe that technology has a larger role to play in their business strategies, helping them capitalise on strategic opportunities.