Innovations disrupt established markets

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Innovations that would have been unimaginable even a few years ago are changing the competitive landscape, disrupting well-established marketplaces, and opening up new possibilities in the eyes of consumers.

So said Andi Mann, VP for strategic solutions at CA Technologies, in a keynote address at the CA IT Management Symposium Africa 2012 yesterday, at the Sandton Convention Centre.

“We are living in an age of innovation - innovation driven by technology,” Mann pointed out.

As an example, he explained that cloud computing can deliver amazing amounts of computing power at a fraction of the cost of what it would have been a few years ago.

“The proliferation of mobile devices means you can interact with your customers in new ways and around the clock. Social media is providing an opportunity to listen to your customers as they interact with your services, while also crowd-sourcing ideas,” he added.

Further, Mann said big data and advanced analytics are enabling more customised services and marketing approaches.

“And with everything from refrigerators to railroad tracks being IP-enabled, we are finding new ways to revolutionise the way we manage our personal lives and our business lives every day. These capabilities are being unleashed at breakthrough speeds that constantly raise expectations from business executives, which transforms IT from moving out of only maintaining technology and keeping the systems up and running. Today, IT is all about delivering innovation to the business.”

The ability of tech to transform

Mann believes the opportunity to leverage the power of technology to transform a business, market and the way organisations interact with customers and services is being increasingly recognised.

In fact, he explained, a recent survey by IDC found that 67% of CIOs believe their role is evolving into chief innovation officer.

For IT to make this transformation and truly help drive business innovation and growth, Mann said, innovation needs to become a pervasive mindset.

“You can even see the evidence in where companies are focusing their IT spending as well. At a time when budgets are tight and the rising complexity of IT means existing systems are more expensive than ever to maintain, the amount of money being spent on new projects to drive innovation is growing.

“IDC expects new project budgets to grow from 23% to 28% of the total budget over the next three years.”

Easier said than done

However, according to Mann, making this transformative leap is easier said than done.

“We all want to lead our markets; we all want to become more strategic, we all want to create that next great application, product or service - the next iPad, the next Angry Birds, the next Facebook.”

He believes there are three fundamental challenges getting in the way of IT's ability to drive business innovation.

The first challenge, he noted, was that innovation is being delivered to market too slowly.

“Customers talk about how skills and resources are misaligned and siloed and this inhibits innovation. Traditional service delivery hampers the ability to improve time to value. The way that ideas work through the organisation - how you choose what to develop - isn't conducive to improving cycle time,” he pointed out.

Secondly, he said, IT infrastructures are too expensive to sustain and maintain, adding that most IT executives say IT complexity continues to increase, and yet productivity is shrinking, systems are fragile and companies are spending more and more time trying to maintain them.

“Somewhere between 70% and 80% of IT budgets are going towards ongoing maintenance rather than new project work, and that makes it difficult to make this transformation.”

Finally, Mann stated that security risks are increasing exponentially. “IT is in a position where it feels it needs to lock down systems and maintain control and compliance.”

On the other hand, he added, business users are looking for openness and they want to bring new devices and use new online applications. These security risks are creating new challenges and inhibiting innovation, he noted.

Driving business innovation

To overcome these barriers, Mann said, CA Technologies believes there are three essential strategies that are necessary to drive business innovation - 'accelerate', 'transform' and 'secure'.

“The first strategy is to accelerate your pace of innovation. You need to be able to leverage new technologies, such as mobile and cloud, so you can meet the demand for new services. You need to know that you're making the right investment decisions, and you need to be able to shrink your development cycle times so you can bring innovative services to market much more quickly.”

To create sustainable growth, competitive differentiation and market relevance, Mann explained, businesses have to transform their infrastructures to free up capacity for innovation by improving efficiency, managing complexity and reducing costs.

“We have to start thinking about moving from an infrastructure-component-focused organisation to one focused on end-to-end service management and user experience; from manual to automated, slow to fast, fragile to agile.”

He also stressed that once enterprises accelerate and transform business services, the question of security, managing identities and managing access becomes more important than ever.

“This brings us to our third, and arguably the most critical, strategy - to secure your online business. Secure by reducing risk, protecting against improper access and fraud, and simplifying compliance.”

He also called on organisations to ensure that critical data and identities are protected in order to secure online business and extend customer reach even in the face of an explosion in end-point devices and new ways of accessing information via public clouds.

“The combination of these three strategies is an approach we call business service innovation,” he concluded.

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