Think Tank: How do you change gears from frugality to innovation?

Computerworld -

Changing Gears From Frugality to Innovation

A generation of IT leaders has focused on reducing costs, outsourcing and calculating investment metrics. With an uptick in IT budgets, they're supposed to be able to move from the cost-cutting mind-set to more innovative and strategic IT work, but Marc Cecere, an analyst at Forrester Research Inc., says it's not so easy to change gears.

According to Mark Livingston, a vice president at consulting firm A.T. Kearney Inc. in Chicago, "The reality is most IT departments can't effectively explore innovative uses of technology because they are stuck in the daily operational grind."

An A.T. Kearney study found that only 20% of companies' IT spending is allocated for IT innovation—a 30% decrease from 2002. A similar study by Forrester puts the innovation number at 33%, which still means that 67% of the IT budget is tied to ongoing operations and maintenance. Moreover, regulatory compliance and security spending are cutting into the money available for innovation. A.T. Kearney is urging IT leaders to get even stingier with operational IT to free up funds for strategic initiatives.

Helen Pukszta, a senior consultant at Cutter Consortium in Arlington, Mass., has another idea. She says IT departments need a "manager of IT business innovation," who would research, analyze and propose new IT applications that would give the company a competitive advantage. That way, the IT steering committee looks at a broader set of IT investment choices than what's already in the project portfolio.

Best Bits

The most useful parts of recent business and IT management books

THE BOOK: A Whole New Mind: Moving From the Information Age to the Conceptual Age, by Daniel H. Pink (Riverhead Books, 2005).

Pink, a bestselling author who has become the darling of the blogosphere, argues in this book that the era of "left brain" dominance, with its emphasis on logical, linear, computerlike thinking, is on the way out and that we're entering the Conceptual Age, when "right brain" qualities such as inventiveness and design will predominate. What does that mean for IT people? Programmers are out (as in outsourced); innovators and artists are in. Routine work is either done through automation or in Asia.

"The outsourcing of routine software work is putting a new premium on software engineers with high-concept abilities," Pink writes. "After all, before the Indian programmers have something to fabricate, maintain, test or upgrade, that something first must be imagined or invented."

And these creations must then be explained and tailored to customers and users, Pink adds, which requires "aptitudes that can't be reduced to a set of rules on a spec sheet—ingenuity, personal rapport and gut instinct."