Mind to Market

Friday, July 27, 2007

Innovation vs Risk Aversion

An interesting Square Off in InformationWeek pits Mike Cuddy, CIO of Toromont Industries against Stephen Prentice, research analyst at Gartner. Gartner has been chiding IT operations recently, accusing them of managing technology rather than providing services to their organizations. To this end, IT departments have become highly risk averse; shunning innovative technologies that may provide valuable services to their constituents in favor of technologies that are easier and simpler to manage.

Cuddy takes exception to this position. He sees the job of CIO as twofold: keeping existing systems functioning and developing new systems to address current and future demands. The priority falls on the first task; if the CIO can't keep existing systems up and running no one is going to back new projects. Due in part to resource constraints this ends up taking up most of the IT department's time leaving little left over for developing the types of systems that the company may need in the near future. So if the CIO seems resistant to innovative technologies, it's simply a matter of priorities, not of preference.

Prentice sees the lack of innovation as a cultural rather than situational. IT departments have become risk averse because they lack imagination and are simply adopting tried and true solutions. There is no doubt that there has been a high failure rate in delivering IT solutions leading to this state. Executive management has been addressing this situation by circumventing the IT department and enabling business unit managers to conduct their own IT projects.

If indeed the IT departments have become obstacles to innovation, what's the harm in enabling the business unit managers to implement their own solutions? In the bad old days, IT had to be centralized because of its expense and complexity; only specialized experts could be expected to get these systems implemented. But with the growth of outsourcing and software delivery systems such as SaaS, and the increased familiarity non-specialized business managers have with IT systems, implementation is no longer a black art.

IT departments may be seeing flat or decreased budgets as a result of projects migrating to business units which is cause for concern; they are losing influence and control within their companies. There has been and will continue to be a struggle between IT and the business units for control of these projects. But the goal is to deliver the needed business services to the end user and if that is better done by enabling the business unit manager to implement an innovative solution then the IT department must adapt and work to make this possible.

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