Who leads Innovation driven Transformation - IT or Business?

Who is leading transformation both incremental and radical in your organisation? Does IT play a catch up role in these discussions or IT leading these discussions?

These are some of the questions that I've explored as part of interactions with customers, partners and colleagues across sectors and regions. As expected, the answers have varied depending on the maturity, industry and the currenthot topic/trend.

It is interesting that, over the years, the onus of innovation, as defined by coming up with an innovative idea (process, product, behaviour etc) which makes commercial sense and not just to do with new products/solutions, has shifted from the business to the technology teams.This has been brought about by the rapid evolution of technology innovations which are overturning the existing business models.

In the past, to be innovative in a particular industry knowledge of the business was paramount. This came from the business which was understood the value chain and key business drivers. Hence, IT was tasked to deliver the technology which supported the innovation. Also, IT wasn't well known for being agile and hence always ended up playing a catch up to the ever-growing list of demand from business.

Business Model Evolution & Technology

The rapid advances in technology driven by

• flexible, agile delivery models afforded by the cloud
• leaner technology landscapes with innovations like SAP HANA and
• easy-to-build consumer grade apps with MEAP(mobile enterprise application platforms)

have all contributed to IT having a critical role to play in business innovations. Software has become the glue which holds customers, partners, employees and the wider stakeholder community together .

Let's look at some of the examples of innovations which have overturned existing business models :

1. Could we have imagined Airbnb (set up in 2008) becoming the largest provider of room - taking up this mantel from the biggest hotel chain in a matter of 7 years? The critical aspect is that it has done this on the back of technology and without owning any of the rooms.
2. Could we have imagined Uber (founded in 2009) becoming the largest taxi company - again using mobile and location technology to great effect - without owning a single taxi?
3. Or Amazon, the largest online retailer (founded 1994) figuring in the top 10 of US retailers without owning a physical storefront?

SMAC (Social, Mobile, Cloud and Analytics) is playing a huge role in driving these and other innovations in business models. These and several other examples in the last few years have brought the focus on IT leading the innovation driven transformation. Organisation are looking at IT to help build a digital business which can survive and compete effectively in the new business landscape. 

The successful organisations are the ones which are able to bring IT and business together to paint a picture of future organisation/business model which taps into technology advances while staying relevant to the customers.

In my next post, we'll look at the idea to innovation gap which have to be tacked for any organisation to be an effective innovator. 

originally posted in SAP SCN