A Call for Innovation

Innovation: We need more, but it must be the right kind, claims Eric Lundquist.

Innovation. In defending Microsofts monopoly, Bill Gates said it was the goal of the companys product strategies. More recently, Hewlett-Packard boss Carly Fiorina championed innovation, rather than trade barriers, as the best counterweight to outsourcing.

If innovation, like eating right and exercising more, is so good for us, how come we arent doing enough of it? And why are the bad guys doing so much of it? For examples of innovations darker side, look no further than the latest virus making its rounds, the hacker figuring a way to steal a chunk of Windows code and unwary customers finding their systems used to launch denial-of-service attacks.

To better understand the status of innovation in IT, I posed questions, via e-mail and in person, to our Corporate Partner Advisory Board, consultants and one vendor CEO. I asked where innovation arises, what might be holding it back and what might be done to boost it.

John Halamka, CIO of Harvard Medical School, in Boston, said aligning the development of projects with strategic objectives in his organization helps make funding innovative projects part of the IT budget. Currently, he spends 75 percent of that budget on maintenance and 25 percent on new projects. Hed like to raise that new-project percentage by driving down the costs of maintenance. Hed also like to stop spending so much on security fixes.

"Ive lost approximately $500,000 in productivity over the last year due to security patches, virus containment and downtime caused by security holes in vendor products," Halamka wrote in an e-mail message. He found the biggest boost to innovation to be the adoption of standards, which enables companies to spread development costs across departments.

Futurist Thornton May noted that recent research showed that "C"-level executives were no longer trusting the troika of vendors, consultants and research companies for information about new innovation. Those executives are tired of being overpromised and underdelivered. Currently, May contends, "the most trusted source of innovation ideas is other C-level executives."

When I asked Wipro Technologies Vice Chairman Vivek Paul where the next wave of outsourcing innovation will come from, he answered satellite imaging and global positioning. One example is the ability to perform such tasks as flood plain insurance risk assessment by remotely examining high-resolution images rather than sending an assessor to perform the task.

The innovation of outsourcing itself could be the most controversial development in the technology industry of the decade. Figuring out how to work with and stay ahead of the outsourcing wave will require an enormous amount of—you guessed it—innovation.

Talk of new innovation is not nearly as convincing as a $50 million investment, however. Corporate Partner Nelson Ramos, a vice president and regional CIO at Sutter Health, in Modesto, Calif., said that was the amount Sutter recently invested in medical diagnosis technologies. "Were starting to see a revitalization of IT innovation in health care," said Ramos. While theres still plenty of pressure to use technology to keep costs down, Ramos said, "technology is now being looked at more frequently as a strategic component in process re-engineering and quality improvement."

When I asked one vendor CEO these questions on innovation, he asked not to be identified, as it caused him to consider how his technology staff is structured. He offered that the currently distinct organizations of host/mainframe operations, PC operations, network operations and telecommunications operations dont make sense any longer and should be rethought. With integration the byword in computer infrastructure, maybe a new technology staffing plan is needed to match the systems being developed, he said.

Innovation is a worthy goal, but it must be developed and directed the same as any key part of corporate strategy. It is all well and good for the Microsofts and HPs to champion innovation, but they—and indeed all vendors—must examine how their products will help their customers achieve their innovation goals.

Editor in Chief Eric Lundquists e-mail address is eric_lundquist@ziffdavis.com.