Frank van Rees, HP South Africa’s Country Managing Director and Enterprise Business Lead
Economic conditions over the past two years have forced organisations to look for creative ways to stay competitive. Even as organisations recover from this era of unpredictability, many CEOs are asking information technology professionals to do more with less funding. However, business executives increasingly view technology professionals as key to driving innovation. In fact, a global study conducted by HP in 2009 revealed that more than seven out of 10 business executives indicated that their technology department was a fundamental enabler of their business success.
The innovation gridlock
“While business executives and IT professionals alike agree that technology can drive overall business benefits, the challenges of rigid infrastructures and aging applications have presented significant roadblocks. Both continue to eat up the bulk of IT budgets in operations, severely restricting the amount that can be spent on driving innovation to address the constant change faced by organisations today,” says Frank van Rees, HP South Africa’s Country Managing Director and Enterprise Business Lead.
The result is “innovation gridlock,” a situation where the technology organisation is blocked from driving new business innovation because the majority of funding is consumed in operating the current environment. Thus, a critical challenge for CIOs today is finding ways to break this innovation gridlock.
According to March 2010 global research commissioned by HP and conducted by Coleman Parkes Research Ltd., CIOs indicated that they spend 40 percent of their budgets on mission-critical systems, 30 percent on legacy systems and 30 percent investing in new technology.
Successful CIOs are able to break the innovation gridlock by shifting operational money to invest in innovation. In cases, these initiatives can be “self-funding,” meaning that with these projects CIOs are freeing up funds that can then be invested in innovation. To do so, CIOs should look for projects that allow transformation within current budgetary constraints and have quick paybacks like application retirement, creative financial arrangements and ways to reduce licensing requirements.
How to stay competitive
Increasing investment in innovation will give organisations the ability to adapt to constant change so they can create new opportunities or capitalise on those that present themselves, and therefore stay competitive.
To create an efficient infrastructure, CIOs should turn to technology vendors that can not only help organisations self-fund, but also create technology environments that are architected for change. Architecting new solutions for change allows IT departments to quickly and easily add new functionality as the business requires it. This ensures that today’s innovation does not become tomorrow’s legacy and reduces the on-going operational cost of the new solution as compared to its predecessor.
Van Rees points out that by utilising technology services and infrastructure consulting, many companies can create cost-efficient technology infrastructures that are reliable, readily scalable and secure. “In addition, projects that modernise the applications infrastructure can increase responsiveness to business priorities, improve productivity and reduce costs, eliminating the complexity inherent in legacy systems,” he says.
Drive new business innovation
Regardless of the route chosen to break innovation gridlock, the key is finding a strategic partner who can bring together the skills, knowledge and capabilities to help technology executives drive new business innovation.
“The rapid rate of change in the business world continues to escalate. Organisations that are unable to harness that change will continue to rack up big disadvantages from the cost of lost – lost time, lost effort and lost opportunity. Breaking innovation gridlock is tantamount to success,” concludes van Rees.