Special Feature
Part of a ZDNet Special Feature: IT Budgeting 2015: Planning the Next Stage

The innovation dilemma: Who really calls the shots on new tech?

Spending on emerging technologies is the smallest — but most exiting — part of the enterprise IT budget. But who gets to make decisions about innovation is changing.

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It's generally accepted that the vast majority of money spent on technology in most businesses is spent on maintaining the existing infrastructure — keeping the lights on. Only a small element, perhaps as low as 20 or 10 percent, is spent on new projects — and even less goes on experimenting with emerging technology.

In tough economic times it's often that new project money that disappears first, but now that the economic outlook is improving, while the budget may be returning, it may not necessarily be flowing back into the CIO's coffers: recent research suggests that much of this innovation budget is going to executives outside of the IT organisation , for example to marketing or sales.

So what does this say about the role of the IT department and the CIO when it comes to investigating new technologies and exploring new ideas? Are they being relegated to implementers rather than originators?  

When asked "Is the CIO still the best person to make decisions about IT innovation for the business?", the ZDNet/TechRepublic CIO Jury panel responded 'yes' by 10 votes to two, which — perhaps unsurprisingly — shows they think the CIO still has a leading role in this type of decision making. But equally, few think they can go it alone any more.

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Chuck Elliott, CTO at Concord University, said: "The CIO is the best single individual to make recommendations for IT innovation, but the CEO has ultimate responsibility for success. Assuming we are talking about significant monetary investment and significant organisational/business change, CIOs will rarely, if ever, make such recommendations in a vacuum. CIOs are probably best equipped to lead collaborative efforts that lead to such recommendations but, in my opinion, it's for the CEO to decide."

Shawn Beighle, CIO at the International Republican Institute, said that the role of CIO has evolved beyond just overseeing the IT. "Where we once simply oversaw the technology used to feed and deliver information out to our organisations, from that central vantage point, we've grown to have a very deep knowledge of not only the how, but also the where and why, of that information flow."

According to Beighle, those CIOs that have adapted are still very relevant to implementing new ideas, as they see how any implementation will impact the organization as a whole. "In a very true sense, the CIO's of today are the COO's of tomorrow," he said.

Jerry Justice, IT Director at SS&G, said CIOs need to make these decisions in partnership with business unit leaders, staff and execs like the CFO. This is because following a separate path "increases costs, puts processes in isolation, increases security risks and reduces leverage".

Modern IT goes beyond tactical issues, traditional sourcing models and resources, said Justice: "It is about aligning technology to people and processes to meet business goals (no matter where the service comes from) by continually aligning, vetting and leveraging technology options as they evolve."

 John Gracyalny, VP IT at SafeAmerica Credit Union, said the CIO is the right person to make these decisions "if, and only if" they are as well versed in business as they are in technology. "The day of the pure technologist is long gone," he added.

Similarly Rocky Goforth, director of IT operations and infrastructure at Thoratec, said that while the CIO is still the best person, this doesn't happen without maintaining relationships with business leaders — otherwise they end up fighting shadow IT.

Derek Wilson, CIO at Origin Enterprises, said CIOs should not be making these decisions in isolation, adding that unless the project is entirely an internal IT decision, such as an infrastructure upgrade of an unsupported platform, the CIO should not proceed without business sponsorship. "He/she needs to bring forward innovation ideas, consult extensively with executives in the other business areas, and get them on board with IT innovation proposals so that they sponsor the business case," he said.

Kevin Leypoldt, IS director at Structural Integrity Associates, said one of the many hats the CIO must wear these days is to engage the business to understand where technology innovations can be a competitive advantage, and then to sponsor these technology innovations into production.

But, said Leypoldt, this should be a collaborative process: "It is not the CIO's job alone to identify technology innovations. There is no better champion than the business themselves to find and drive innovation. I believe that the CIO must be present to engage and challenge the business into finding and identifying technology innovations, but it cannot be the CIO alone."

Michael Spears, CIO at NCCI Holdings, agreed that CIOs cannot make decisions in a vacuum. "Providing solutions without a problem won't be tolerated long. It's also imperative that IT be as easy if not easier to work with as outside firms — otherwise you are just in the way." CIOs can be very helpful in preventing 'silos' from making poor decisions and fragmenting the business, said Spears. But he added: "Your clout will rarely come from position authority — you'll have to earn your stripes."

 This week's CIO Jury was:

  • Dan Fiehn, Group Head of IT, Markerstudy Group
  • Reji Mathew, IT director, Yankees Entertainment and Sports Network
  • Chuck Elliott, CTO, Concord University
  • Shawn Beighle, CIO, International Republican Institute
  • John Gracyalny, VP IT, SafeAmerica Credit Union
  • Michael Hanken, VP of IT, Multiquip
  • Richard Storey, head of IT, Guy's and St Thomas' NHS Foundation Trust
  • Juergen Renfer, CIO, Kommunale Unfallversicherung Bayern
  • Jerry Justice, IT Director, SS&G
  • Rocky Goforth, Director IT Operations & Infrastructure, Thoratec Corporation
  • Derek Wilson, CIO, Origin Enterprises
  • Michael Spears, CIO at NCCI Holdings

Want to be part of TechRepublic's CIO Jury and have your say on the hot issues for IT decision-makers? If you are a CIO, CTO, IT director or equivalent at a large or small company, working in the private sector or in government, and you want to join TechRepublic's CIO Jury pool, or you know an IT chief who should, then get in contact.

Either click the Contact link below or email me, steve dot ranger at techrepublic dot com, and send your name, title, company, location, and email address.

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