How to Identify Innovation Opportunities In-House and Externally

Innovation drives almost every IT organization. Yet finding an innovative technology that can improve productivity, performance, revenue, and achieve other desirable goals is a highly challenging task. 

Spotting a promising innovation opportunity should begin by harmonizing enterprise reality with organizational goals, advises J-M Erlendson, transformation engineering lead at enterprise software developer Software AG, in an email interview. "Evaluating IT processes end-to-end allows you to visualize and identify both areas of concern, for improvement, and areas of potential, for innovation." 

Combining process mining, task mining, simulation, and business architecture will help you identify changes' ripple effects and bring the right stakeholders into your optimization initiatives at the right time, Erlendson says. "By examining processes with a technological lens and a human one, paired with AI insights, businesses can gain unparalleled visibility into unseen opportunities to improve operational efficiency, reduce risk, and increase organizational velocity." 

Use formal and informal channels to mine for IT innovation at all levels of your organization, advises Jay Upchurch, executive vice president and CIO at analytics technology developer SAS, via email. "Creating a community of practice for your organization's core platforms allows employees to share how they apply existing technology," he notes. Monthly business and technologist meetings can help IT leaders learn about current business needs. "It's also important to stay aligned with analysts and external practice groups to monitor market trends like generative AI." 

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James Ewing, a director at technology research and advisory firm ISG, suggests creating an internal innovation hub. "This doesn’t need to be a big, expensive tech lab," he says in an email interview. Ewing explains that an innovation hub can be as simple as sharing whiteboard scenarios with colleagues who understand how a given technology could address a business challenge. "The important thing is that nothing is off the table." 

Critical Evaluation 

Before a good idea can become reality it must, like any other business initiative, go through a multi-step process that includes validation, approval, and funding. "The opportunity will need to demonstrate cost savings, increased profits, reduced cycle time, lower risk, and recent measurable improvements in customer satisfaction or employee experience," Ewing says. Enterprise boards prioritize investments based on basic business metrics, he adds. "My advice is, speak the board's language, not the technology language." 

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Considering the fast pace of innovation and high cost of project failure, it’s more important than ever to take a pragmatic approach to opportunity evaluation, Erlendson says. "This comes from two primary sources: value to the business, and the ability to affect significant change." He notes that value to the business is a strategic alignment, often considering customer impact and business needs, brought together in a connected view of initiatives and KPIs. Ability to affect comes from business and IT analysis, aided by AI tools and business domain expertise, identifying areas of concern or opportunity and the value of change. "Combined, these represent 'what-if' scenarios that can be communicated and scored by stakeholders to determine the best path forward." 

Whenever possible, evaluate an innovation with a proof-of-value trial with a small target audience before any larger deployments take place, Upchurch recommends. "This helps IT assess the impact of change, the return on investment, and how to best guide and govern the new technology." When an emerging technology such as generative AI is involved, there's value in deploying it on a small scale first, he observes. "Assembling the right cross-section of participants is also key to long-term success." 

Related:How Today’s CIOs Drive Value

A Team Effort 

Large investments typically require a business justification that will be jointly reviewed by the CIO, CFO, and other pertinent C-level partners, so be sure that the final decision arrived at fits with your strategic business plan, Upchurch advises. 

CIOs and other IT leaders should also investigate any possible changes to IT workflows, since there may be ripple effects across the organization, Erlendson says. "From there, the day-to-day departments closest to any process changes should have the largest say in implementation, since they'll be most responsible for turning innovation potential into actual efficiency." He adds that it's also important to have a connected process and architecture repository, tagged by ownership and accountability, in order to effectively identify and reach stakeholders at the right time and with the right message. 

Once a proposed innovation has been accepted and approved through governance, it needs to be properly translated into functional and technical requirements for implementation, Erlendson says. "Engaging change management teams early will help prepare the business to properly execute on the new way of working." He also believes that it's important to maintain continuous visibility into process execution, celebrating successes and identifying areas for continuous improvement. 

A Parting Thought 

"If you're not innovating, know your competitors are, or are at least trying to," Ewing advises.