N THE CONTINUING QUEST FOR BUSINESS GROWTH, many CEOs are turning to their CIOs and IT organizations because technology is essential to two compelling sources of growth: innovation and integration. Innovation, of course, is doing new things that customers ultimately appreciate and value – not only developing new generations of products,services, channels, and customer experience but also conceiving new business processes and models. Integration is making the multiple units, functions, and sites of large organizations work together to increase capacity, improve performance, lower cost structure, and discover opportunities for improvement that don’t appear until you look across functions.
Key growth imperatives succeed best whenspecialized teams share skills, experience, and insight across the silos. by James I. Cash, Jr., Michael J. Earl, and Robert Morison hbr.org | November 2008 | Harvard Business Review 91 Brett Ryder 92 Harvard Business Review | November 2008 | hbr.org
Teaming Up to Crack Innovation and Enterprise Integration Together, innovation and integration allow an enterprise to engage more customers andbring more goods and services to market. Successful innovation often depends on the ability to coordinate efforts across organizational boundaries because innovations reach sufficient scale and impact only when integrated into the larger operations of the corporation. Neither pursuit is optional, in good economic times or bad, because stagnation on either front can doom a business, and success inboth is the best guarantee of thriving.
Companies rely on IT as a catalyst, enabler, and component of the new products, services, channels, processes, and business models, as well as the way to encourage innovators to collaborate.
And with its extensive experience working at the heart of major business-change initiatives of all kinds – implementing common infrastructures, shared databases, andcross functional and enterprise systems – IT is often the corporation’s de facto center of expertise in business integration.
Our research confirms this. We had noticed several years ago that some CIOs were being asked to wear more than one executive hat. So, in 2006, with the aid of Nicholas Vitalari of nGenera, Keri Pearlson of KP Partners, and Espen Andersen of the Norwegian School of Managementand other colleagues, we began investigating the roles of the contemporary IT organization in 24 major, often global, U.S. and European corporations. We talked with many of these CIOs directly, examining the additional roles they and their IT organizations were being asked to play, and discussed the business strategies and drivers behind these roles. We found that 12 of the 24 were charged withimproving horizontal integration of the business, and a third were focused on their corporations’ innovation and growth initiatives. A few were focused on both innovation and integration.
CEOs today are asking their CIOs and IT organizations to play bigger roles in the growth agenda by providing the tools for collaborative innovation; by participating in innovation initiatives of all kinds; bybuilding an integrated platform of business processes, information, systems, and technology; and by sharing their experience and expertise in how to improve the “horizontal discipline” of the corporation. So even as much of the traditional work of IT has been automated, commoditized, and readily outsourced, today’s innovation and integration challenges are drawing IT deeper than ever into the centralnervous system of the corporation.
But the work involves sometimes daunting challenges because business innovation and integration have something else in common – both are still “unnatural acts” in most large corporations.
Businesses are better at stifling innovation than at capitalizing on it, better at optimizing local operations than at integrating them for the good of the enterprise and its...