Two thirds of chief information officers (CIOs) believe that IT is crucial for driving business innovation, but only one in four believes their department is being used properly, according to research.

The study by consultancy Capgemini says it is important to build strong links between IT departments and upper management. The firm has identified a set of traits common among the top companies for business innovation, based upon interviews with 400 CIOs around the world.

The best innovators have a strong understanding of IT at leadership level. It is also common for CIOs at these businesses to report directly to the chief executive, rather than the chief financial officer.

More than half (60 per cent) of CIOs believe they can assist with business innovation alongside the provision of fundamental IT services. But covering both areas requires a concentrated effort, said Eric Monnoyer, global leader of business and information strategy at Capgemini.

“For CIOs, managing the balance between cost containment and continuity whilst driving competitive advantage is a constant challenge," he said.

"As the drive for innovation, it continues to dominate the business agenda and this is a real opportunity for the CIO to deliver business transformation through the IT function.”