Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Friday, October 28, 2011

How to Become a Chief Innovation Officer

I had a real treat this week: I was invited to give a presentation to 25 CIOs at Infor's European CIO Advisory Council meeting, in Maranello, Italy. If you are not familiar with Maranello, it's famous as the town of the headquarters of Ferrari, which is an Infor customer. More on Ferrari at the end of this post.

Infor's Integration Strategy

The event was kicked off by Infor's CEO, Charles Phillips, who came into the top job last December, from his previous position as Oracle's co-President. It was a good opportunity for me to see how Charles deals up close with Infor customers, some of whom were meeting him here for the first time. Charles demonstrated a detailed knowledge of Infor's product portfolio and an ability to outline complex product strategy in business terms.

To that point, Charles gave the best explanation I've heard to date on Infor's integration strategy. Infor's Intelligent and Open Network (ION) is a lightweight middleware product that provides integration between various Infor products, between those products and third-party applications, and between those products and customer/partner developed systems. It is "lightweight" in that it is not optimized for specific transactions or point-to-point integration. Rather each application publishes a complete XML document for each transaction (e.g. a sales order), to which other ION-aware applications can subscribe asynchronously. ION stores all XML documents in a business vault, for reporting purposes and, I assume, to satisfy any regulatory compliance needs for audit trails.

According to Charles, ION is not appropriate for every application (e.g. an equities trading platform requiring subsecond response time would not be a fit), but it meets the need in a simple way for enterprise business applications, such as ERP, CRM and supply chain management. Infor is now in the process of ION-enabling each of its products for approximately 93 business transactions.

The best part is that ION ships as just three CDs, which, according to Infor, can be installed in about 10 minutes.

Infor's Challenge

So are all Infor customers ready to move forward with ION? Not quite. From group discussions and hallway conversations, it is clear that Infor's challenge is to get customers to current releases of their Infor products, where they can take advantages of Infor's new capabilities.

To be fair, this problem is not unique to Infor but common to all enterprise software vendors with large and long-standing installed bases. Many customers purchased their ERP systems years ago, and for good and not-so-good reasons they may have made hundreds or thousands of code modifications. Although they may have seemed justified at the time, these modifications now make it nearly impossible for customers to upgrade. In successful case studies mentioned by Infor executives, the only thing that seems to work is to take a clean-sheet-of-paper approach: put the latest software version in front of users in a conference room pilot and ask, "What's missing?" If you start with the assumption that each previous modification is still needed, the whole project collapses under its own weight.

How to Become a Chief Innovation Officer

This background turned out to be a good set-up for my presentation. I shared that the job of the CIO is becoming more difficult. CIO budget increases in most companies are severely limited, while at the same time CIOs are being asked to do more: support business change (which is increasing) as well as new technology innovations, such as mobile applications, business intelligence, new customer-facing systems, and social business.

The risk for CIOs under these pressures is that they may become, essentially, irrelevant. According to our research at Computer Economics, 75% of CIO budgets go toward ongoing support, leaving only 25% for innovation. With limited time and money, the CIO is forced to defer many business requests for new initiatives, and when users can't get what they need from the CIO, they begin to develop their own systems and IT capabilities. Eventually, the business stops asking the CIO for new stuff, and the CIO slowly becomes just a "Chief Infrastructure Officer," maintaining existing systems.

In such an environment, how can the CIO grow into a "Chief Innovation Officer?" I outlined the key steps.
  1. Optimize the Infrastructure. The first step is to lower on-going support costs to free up money for innovation. Understand your current cost structure and where there are opportunities to upgrade and consolidate the infrastructure and applications portfolio. Adopt key IT management best practices for incident management, problem management, and change management, which further lower costs and improve service levels. Cloud computing can also play a role here as a way of quickly rolling out new systems that build upon the organization's core transactional processing systems.
  2. Become a Chief Integration Officer and Chief Intelligence Officer. Once the infrastructure has been optimized, the CIO now has the credibility and ability to expand his or her role to become a Chief Integration Officer (focused on end-to-end business processes and customer/supplier integration) as well as a Chief Intelligence Officer (focused on turning internal and external data into useful information and deploying it to the organization through a variety of channels).
  3. Become a Chief Innovation Officer. The CIO is now not only reacting to and supporting the business strategy but also leading the business into new IT-enabled products and services.
I finished with a warning. Becoming a Chief Innovation Officer is not a one-time promotion. Today's innovation becomes tomorrow's infrastructure. Just as personal computers and email were once seen as innovations in IT, today they are just part of the infrastructure. Any CIO today who is focused on PC maintenance or email administration risks becoming irrelevant. So also, tomorrow, mobile applications, tablet computing, and business intelligence will become commonplace as elements of tomorrow's infrastructure. The CIO's challenge is to continually learn and grow.

The Need for Speed

Our two days together were not all work and no play. As part of the event festivities, Infor arranged a tour of the Ferrari Museum and a Ferrari test drive around Maranello for all the attendees. I put together a little video of my Ferrari driving experience, which you can view below.

Disclosure: Infor paid for my participation in this event.

Related Posts

New details on Infor's Lawson acquisition

by Frank Scavo, 10/28/2011 04:01:00 AM | permalink | e-mail this!

 Reader Comments:

Post a Comment

Links to this post:


Powered by Blogger

(c) 2002-2016, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo, at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

My IT research firm, Computer Economics provides metrics for IT management, such as IT spending and staffing benchmarks, ROI/TCO studies, outsourcing statistics, and more.

Go to latest postings

Search the Spectator!
Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed RSS News Feed

Computer Economics
ERP Support Staffing Ratios
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report

Get these headlines on your site, free!


2014 Best Independent ERP Blog - Winner

2013 Best ERP Writer - Winner

Alltop. We're kind of a big deal.
Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs

Key References
Strativa: Business strategy consulting, strategic planning
Strativa: IT strategy consulting
Strativa: Business process improvement, process mapping, consultants
Strativa: IT due diligence
Strativa: ERP software selection consulting and vendor evaluation
Strativa: CRM software selection consulting and vendor evaluation
Strativa: Project management consulting, change management
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Enterprise IT News: diginomica

Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
September 2015
October 2015
November 2015
February 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
Latest postings