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How IT Can Spur Digital Innovation

Digital initiatives are where the action is. These 3 companies show how IT can get involved before there's a breakdown or breach.

interface design and customer experience. La Quinta outsources the application development, but Shaiva's IT group brings the discipline and methodology to the effort. Developers did the coding in three-day sprint sessions, each with marketing pros in the room to answer questions.

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At each of five key project stages, the stakeholders stop to have what Shaiva calls 30-minute "tollgate" meetings, in which the business unit and IT teams go over where they're at and where they're headed. Anyone can throw up a red light -- if costs are running higher than expected, for example, or if the technology isn't cutting it. Teams have up to 48 hours to fix what led to the red light. About 5% of projects get killed at one of these tollgates, which come at what Shaiva describes as the strategy, architecture, design, build, and pre-production stages. Most projects that get killed are stopped at the strategy stage, and on occasion at the architecture stage. "We don't want cowboy development," Shaiva says. "... It's our own flavor of Agile scrum."

For example, for a recent website redesign, La Qunta implemented two-week design and development sprints that included three days of joint design, configuration, and coding sessions, where marketing teams were in the room as part of the process. It used a similar Agile process for the design of Instant Hold.

The IT-marketing relationship is among the weakest at companies, our survey finds. Just 37% of IT pros say they're highly integrated with their marketing colleagues, a percentage that's lower than with all six other functions we asked about. The non-IT pros in our survey think even less of this relationship: Just 27% say IT and marketing are highly integrated at their companies. "Keeping each other in the loop isn't collaborating," warns Shaiva.

A CEO's view of digital innovation

Insurance Auto Auctions holds live auctions at over 165 sites across North America, but buyers come from 110 countries worldwide thanks to live-streaming via web and mobile apps that offer real-time bidding and translations into six languages. PC and tablet apps let buyers monitor and bid on as many as eight live auctions at the same time, while a smartphone app lets them bid on one at a time.

Even live auction attendees are glued to their devices, viewing some of the more than 15 million vehicle photos IAA posts a year. "They're at the physical auction raising their one hand, and in the other hand they have their mobile phone and they're bidding on vehicles in another auction somewhere else," says CEO John Kett. "That's honestly something we didn't think about. We thought of them almost as discrete, but really they're using them at the same time."

IAA is living one lesson of digital business: People don't want to unplug; they expect you to make their in-person experience even better via a mobile device. IAA is adapting techniques from B2C e-commerce, such as a new project to improve vehicle image quality and let buyers zoom in to look at a car's damage more closely.

When I spoke with Kett and IAA CTO John Krupnik, they didn't talk about "aligning" IT efforts with business priorities. With tech so central to operations, Kett described sitting down with Krupnik, and the company's operations, finance, and marketing leaders to map business priorities. "John's not alone," says Kett, about his CTO balancing priorities. "... We're very much tuned into what constraints or roadblocks [IT] might have, and we help him manage through that, because ultimately we own it."

Krupnik makes sure his technologists have just as tight a connection to business priorities and challenges.

IAA's key customers, besides car buyers, are insurance companies. When insurers take in totaled vehicles, they turn to IAA to get the title and sell them as quickly as possible. When a disaster such as a hurricane or flood hits somewhere in the US, there's a surge of totaled cars in that area that need processing, overwhelming local teams. So Krupnik will send his IT team out to the field to process cars, at a time when IAA's technology is under the most intense pressure to perform.

"Normally, they don't get to see their technology directly in the hands of that user," Krupnik says. "And the stories that they share, it's amazing. There's a level of personal satisfaction with that, too, where they can really connect the dots of how they started with that requirement." IAA has an innovation team, but it's not a part of the IT organization; there aren't even IT pros on it. Kett intentionally staffed that group with people from disciplines other than tech, and from other companies and industries, to get a fresh perspective on how IAA should be using emerging technology.

Our survey suggests that few companies look to IT as the main innovation engine. When we asked which of seven factors will increase IT's importance in innovation, more than 60% of non-IT and IT did cite two factors: relying more on data analytics for business decisions, and interacting more with customers through digital channels. However, just 8% of non-IT leaders say "more innovative ideas" is the No. 1 area of improvement they need from IT.

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Instead, the top three responses (covering more than three-fourths of survey respondents) on ways to improve IT are to work more closely with business units, deliver projects faster, and improve IT quality. Just 11% cite lowering IT costs.

Translation: Work with us to get stuff done, and we can figure out a way to pay for it. "If there's ROI, the money can be found," La Quinta CIO Shaiva says. "It's the ability to execute" a project in partnership with the business that matters.

Read the rest of the story in the new issue of
InformationWeek Tech Digest.