Research and development While research suggests firms splash out an enormous amount of cash on R&D, only a tiny fraction of patents are monetised – perhaps as little as 10 per cent. How important should innovation be to the in-house IT department and how can chief information officers (CIOs) help the business make the most of technical R&D?

Innovation is alive and kicking in IT departments. It tends to operate within boundaries defined by practicality, such as the size of the business and the progressiveness of the management team. From a small business perspective, innovation often aims to deliver best value for money.

Today’s component approach to applications delivered via web-enabled services, combined with the flexibility of applications, has produced a potent set of tools that can be embroidered together to produce a rich tapestry of functionality.

Innovation is still required to ensure the services meet business requirements in the most appropriate and efficient way.

CIOs can help the business make the most of R&D by ensuring that innovative projects are well defined and understood. Good ideas are not always immediately obvious to all. If the risks and opportunities of R&D are not fully understood it can be perceived as an academic exercise more closely aligned with staff development than any real business benefit.
Dean Burnell, ICT programme manager, The Football Foundation

Most in-house IT departments spend a relatively small amount of time investigating new technologies. They face a range of delivery pressures, such as ensuring services meet agreed levels and that projects are on time and budget.

However, smart CIOs recognise that innovation provides a key opportunity to influence business strategy and that they need to work out the best way of using their limited resources.

One approach is to have a small team who seek out emerging technologies and prototype these in real-life situations. If you are considering introducing this you should review the Skills Framework for the Information Age (SFIA), which describes the needs at various levels.

Or you could give responsibility for evaluating new technologies to the enterprise architecture team. This group will consider how to strategically align technology roadmaps with business needs.

Whichever approach, it makes sense to develop partnerships with suppliers and set up showcase environments that expose innovative solutions to business managers. Ultimately, this is likely to deliver real business benefits.
Sharm Manwani, Henley Management College

Innovation does not just happen. For it to happen, you must be seen to value it. To foster a culture of innovation you need to hire the right people, promote the value of innovation, put structures in place to foster it and reward innovative behaviour. And at Betfair, we have implemented a range of initiatives.

We schedule a proportion of all IT employees’ time to do research in a topic of their choosing. The only catch is they are asked to give a presentation on their findings at the end of a research week.

The company recently awarded a £10,000 prize to an IT team member who had conceived and delivered an innovative product in their own time. We run a ring-fenced group in the IT team, called the Advanced Technology Group, to ensure we undertake forward-looking, and even speculative, R&D.

We also provide a public showcase for some of the ideas at http://labs.betfair.com. Here, customers can see the sort of things we are looking at, try them out and give us very valuable feedback.

So far, we have achieved some major R&D successes, like the creation of our next-generation transaction processing platform. But one of the big challenges when running an IT R&D team is measuring its effectiveness. We are evolving metrics that look at the quality and impact of our R&D initiatives.
Rorie Devine, chief technology officer, Betfair

Automating the business Automation has become central to corporate IT and helps remove bottlenecks from procedures. How important is automation to the processing of information in the business and what types of automation technology might help the CIO improve efficiency?

At university, we learned about computer controlled lathes and space-age car production lines. Now, the concept of manufacturing automation has moved into processes too, but much of the large-scale process automation promised in major ERP or CRM projects has been discredited through poorly designed systems that cost a great deal, but do not really automate the process of handling customers. I think one of the tools that will grow in popularity in the near future is the wiki.

We all know Wikipedia, but I am referring to the control and update of project information. Email works well for one-to-one or one-to-many communications, but a wiki works really well for many-to-many communications, so is better suited to project management than email – especially for the manager at the top who ends up on an exponential number of mailing lists, as subordinates cover their backs.
Mark Kobayashi-Hillary, director, National Outsourcing Association

Automating the use of information in operational processes, such as order processing, is far more straightforward than achieving this goal in decision support processes such as product development.

The CIO can aid operational efficiency by ensuring business rules are transparent and easy to modify rather than hidden in obscure legacy programs.

The challenge in decision support processes is different. Here, the requirement is to access and present structured and unstructured information from a variety of sources. Historically, this information is spread across disparate systems such as databases, business intelligence models and knowledge management systems. CIOs have the opportunity to evaluate new technologies such as powerful search engines that can scan these sources for information on selected topics.
Sharm Manwani, Henley Management College

It is very important that the CIO understands his business and really understands what is meant by efficiency. I was involved in a major re-engineering of the claims process for one of the UK’s major general insurers, which brought home to me that this is not always obvious.

The claims department had carried out efficiency work, but focussed on cutting average hold time (AHT) for touches and resulted in claims taking many touches, which meant a lot of time to settlement, customer dissatisfaction and leakage.

We changed the claims department from one where efficiency was defined by AHT for each touch to one where the focus was fewer, longer touches using automation to increase quality and to reduce the overall time from claims registration to settlement. This reduced claims costs through less leakage and improved customer satisfaction.
John Proudlock, transformation director, Vertex Financial Services