Can IT Innovate While Cutting Costs?

Constellation Research reports that, when choosing between reducing IT costs and delivering business innovation, CIOs make reducing IT costs a priority even though they would rather be focusing on innovation.

The firm’s survey off 119 CIOs found 45 percent focused on IT costs, and only 22 percent on innovation. The rest were evenly split between using business intelligence to improve the business and “integrating disparate internal and external technologies” (which sounds like a euphemism for rouge SaaS applications, or consumer devices, but Constellation defines as “external networks, customers, partners and suppliers”).

In contrast, 44 percent said business innovation is at the top of their agenda, and 34 percent want to focus on business intelligence. Only 13 percent want to be thinking about integration, and only 9 percent about IT costs.

The findings seem consistent with other surveys, and it’s clear, from listening to CIOs talk about this topic over time, that a lot of you get mixed messages. It’s your job to keep IT costs down, but if the company doesn’t innovate, it’s going to die. But don’t you have to do both?

Constellation identifies three obstacles to making innovation Job #1:

Fewer than half of CIOs still don’t sit with top decision-makers

They’re still spending 70 percent or more on legacy systems and infrastructure

Shadow IT is growing, raising IT costs.

Of the three, shadow IT is primed for turning into an advantage. Business leaders usually say they buy their own technology because IT doesn’t adopt new technologies fast enough. CIOs who are successful at innovation attribute that success, at least in part, to their embrace of technologies discovered by business users.

Can a closer partnership between line of business and IT leaders further both the cost-cutting and innovation missions?