CIOs & CTOs aspire to IT & product innovation; CEOs less so
By Staff -- Manufacturing Business Technology, 11/1/2005 7:00:00 AM
In a survey of 9,300 worldwide business and technology leaders, New York-based McKinsey & Co. found nearly 80 percent of CIOs and CTOs cite technology innovation as high on the list of things that can make their companies more profitable. But while 53 percent of CIOs and CTOs said it was the most important factor, only 45 percent of CEOs thought so.
The August report focused on identifying key trends anticipated to impact growth through 2010. Although ranking of importance did vary, there was broad consensus that "the increasing pace of technological innovation, the growing affluence of emerging economies, and low-cost offshore manufacturing" were deemed the most likely factors affecting growth.
The discrepancy between C-level views on IT innovation as a profit driver "appears to reflect frustration among nontechnical executives concerning the IT organization's perceived inability to deliver tangible value to business," the authors state. "Since business executives tend not to see the overall results and impact of IT spending, CIOs must make [IT's] business value more visible—and the costs much more controllable—so that IT isn't seen as a black box."
With regard to product innovation, tech execs rate it the most critical factor in growth than did their business counterparts—33 percent to 25 percent respectively. Business execs rank new product development as more important than tech execs—22 percent to 19 percent. A likely explanation, the authors reason, is "the traditional IT organization is seen as not moving fast enough to keep up with an iterative new product innovation cycle."
Another discrepancy dealt with automating business processes. Tech execs say it's the best route to improve operational efficiency more often than did business execs—43 percent versus 29 percent, respectively.
"Business leaders clearly have unpleasant memories of large IT-led automation projects [such as ERP] that were long on costs but short on results," the report states. "CIOs must take a more integrated view of the sources of business value, addressing not just labor-saving automation, but also the optimization of capital through practices such as outsourcing or offshoring."
Operationalizing Product Innovation
01/06/2008
