Smart Enterprise Magazine

Volume 6, Number 3, 2012

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Smart Business there are systematic ways to improve the strategic image of IT (for example, by using insights from The Real Business of IT: How CIOs Create and Communicate Value). Even as you start your IT transformation, you can start inno- vating. The best place to begin is where it's most welcomed and acceptable — with business processes. You can have a big impact very quickly — and after a few "wins," people will begin to see you differently. I've seen it work. Process Innovation in Action For example, a group of IT innovators in a Brazilian bank — now part of global giant Santander — innovated to reduce queue lengths in bank lobbies. They didn't wait to be asked; they just asked branch managers what problems they had, and then found a few who were willing to experiment. The IT group rolled through queues with a low-tech, jury-rigged kiosk-on-a-cart and cut the queues in half. Once they had clearly demonstrated that this idea worked, the bank took it forward to implementation. Then, after a few more business process innovations, the bank asked the IT team to take a much larger role across the enterprise. Business process is the sweet spot for IT innovation because it's where IT has the most impact and the best relationships. IT deliv- ers value by making business processes work better, and you often know as much — or more — about processes as many business execs. You know where the weak spots are, where redundancies exist and where process steps could be much more efficient. Lower Risks, Higher Rewards Just as important, business process innovation has lower risk and clearer rewards than innovation that is more ambitious. In process innovation, you can conduct real experiments — assess- ing control groups and test groups, varying specific mechanisms, understanding performance before and after — in ways that are much more difficult in other areas. That means business process innovation can be cheaper and can generate a much clearer go- forward business case than other types of innovation. Here are more examples of how it can work: n A hospital CIO conducts two to three experiments per year. He identifies them through discussions with friendly business execs. Then he staffs the efforts with his best employees as a reward for great performance. Costs are low because employees do the projects in their spare time, and the hit rate is high because they do projects only where a business executive already sees the need. n The head of IT operations for a multibillion-dollar car retailer built a small innovation team that meets for an extended lunch on Tuesdays. Innovators work in their spare time on whatever projects interest them. For example, the team started by implementing text messaging in the disaster recovery process. Then, branching out to several other processes, they built and successfully tested "The IT team can earn respect as strategic innovators — but it has to be done incrementally." an innovative way to sell more cars through texts. n The CIO of an electric utility company tasked a small team with identifying processes with high costs or many defects and then finding technology- enabled ways to improve them. When they found a potential target process, they approached the process owner to see if there was interest. The team was so successful that after a few years, the CIO gave them P&L goals — not only covering their costs, but visibly improving the firm's financials. The point is that getting started doesn't always require a busi- ness mandate, and it doesn't require much money. It just requires the will to innovate and the ability to engage others in your cause. Try the following action plan: Look for people who want to innovate. Give them a task, or give them a new technology and have them find a purpose for it. They'll often work for free just to have the opportunity to do something more exciting than their day jobs. Find business execs who are open to experimentation. They may have difficulties they want fixed, or just a love of new technol- ogy. Then find ways to improve their business processes. This was a very effective mechanism for all of the innovators we studied. Conduct experiments "on the cheap" that convince people there is a better way to do things. Business processes are ideal for well-designed experiments. Use project requests as an opportunity to deliver what the business wants in a better way. If you can deliver what the orga- nization wants done more cheaply, more efficiently and in a way that's better for IT, then everybody wins. Identify where IT is being bypassed, such as in consumer technologies. This can help you diagnose where you need to improve relationships and engagement. These people or groups may also become "superusers," who help you find innovative uses for new technologies. When it comes to innovation, don't wait to be asked, but don't aim too high at first, either. Business processes are the sweet spot for IT innovation. Start innovating in these areas and new oppor- tunities will open for you and your IT team. n George Westerman is a researcher at MIT's Center for Digital Business and the co-author of two books on business and IT. A version of this article originally appeared on Smart Enter- prise Exchange. 2012 • SMART ENTERPRISE 13

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