The potential for IT to play a central role in business innovation is so great that, over the years, it's been suggested that the title chief information officer might be changed to chief innovation officer. The fact that, by and large, that hasn't happened says a lot about expectations for the CIO role and points to the reason many companies can't seem to leverage their IT strategies into new business methods and models.

Authors C.K. Prahalad and M.S. Krishnan address this dilemma in their book The New Age Of Innovation. They refer to it as the "line of business and CIO disconnect," because it involves a gulf between what business managers want to accomplish and what CIOs perceive their jobs to be--and how they're perceived. That the CIO is often thought of as operating in a technology silo concerned primarily with "internal efficiency," for instance, is a significant limiting factor. "It is not surprising that the CIO focus is on maintenance of existing systems and not business innovation," the authors write.

Prahalad and Krishnan recommend that the CIO position be overhauled to accommodate the imperatives of a global, networked business environment. "The tensions between flexibility, efficiency, and the need to focus on flexible business processes force a new convergence of the roles of the business managers, CIOs, and chief technology officers," they write. For companies to be competitive in a dynamic marketplace that demands continuous innovation, that convergence must represent more than just a clever reinterpretation of an acronym.

-- John Soat

Shut Up And PayPal Me
So here comes Amazon, expecting somehow to deal itself into the online payments game. Unfortunately, that trail was blazed by PayPal a long time ago. PayPal is ingrained into consumers' hands--and retailers' heads--across the world.

Why do we care that Amazon is announcing its own online payment scheme? Personally, I don't, and I suspect many, many more won't, either. Amazon would severely hurt its retail business if it required all of its purchases to be done through its payment services.

Amazon has proven that its closed-systems approach, like with Kindle, just doesn't work well. So unless the execs over there figure out how to scale and expand the payments game for consumers, the war will never even be fought because it already was won long before Amazon ever knew there was one.

-- Bill Glynn, managing director, Collective IQ

The Lust Factor
Recently, a friend said that the mantra of his company is to "build products that people lust for." While at first it sounds a bit corny, when you apply that statement to your product analysis, design, and development process, it makes a lot of sense. Innovation isn't only the invention and development of technology--sometimes innovation is honing your current processes.

We're looking into implementing a lust factor into our process here at PacketTrap. Every feature we build should have a lust factor. Also the workflow, the interface, and the overall experience. Innovation, in this case, is process innovation.

-- Steve Goodman, CEO, PacketTrap

Real Innovation Is Hard

Improving a well-understood process is easier than tackling a messy cross-company or intercompany process. It's easy to talk about global resources but hard to implement in a company where the HR and project management systems assume a single homogeneous workforce. It's easy to talk about one-to-one customer interactions but hard to implement in a company where the IT systems don't support customer-centric solutions selling.

Often we get wrapped up in optimizing processes rather than taking a bigger-picture view on getting the biggest bang for the buck. Innovation is finding the right leverage points and attacking them with the right tools.

-- Christopher Keene, CEO, WaveMaker