Vulcan: The father of innovation

The chaos of the eruption of Eyjafjallajökull, although unprecedented and at massive cost to business, exposed fissures of ingenuity. Put simply there were those that did and those that didn't

 
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Who could have anticipated that the eruption of Eyjafjallajökull, a relatively minor volcano, would close down aerospace and cast a cloud of volcanic dust over much of Europe?

The airline industry suffered terrible losses and more broadly, will we ever really know the true cost to business with critical meetings canceled, holidays postponed, freight grounded and people displaced for weeks. But among the many tales of woe were others of opportunity; a London private hire firm took dozens of long-distance bookings to destinations including Salzburg, Madrid and Rome, video-conferencing apparently went up 11 percent and Eurostar went some way to salvaging its reputation after snow halted its services over Christmas.

But of course it isn’t only cataclysmic natural events that force change to the status quo.

It’s no secret that business is being challenged like never before. In the face of economic meltdown the need to quickly cut cost, inevitably out of out IT, can lead to stifled innovation, setting R&D back months. Additionally there’s an interesting new dichotomy that is demanding the attention from the CEO. Business is increasingly being driven by sophisticated global networks of customers expecting keenly priced new services delivered fast if not faster than before. Staying competitive, staying customer connected; at the same time as responding to the financial demands of the business. No mean feat.

In order to do this we’re seeing customers embrace creativity and innovation in ways they just would not have entertained two years ago. Radical CEOs know that while financial stability is essential it would be the death knell for the business if it stopped moving forward or listening to customers.

Innovation is delivering serious cash returns. Research has shown that one in four companies is investing in strategic IT projects that drive new business. Additionally, research from the London School of Economics and global consultancy McKinsey showed that firms which combine strong, sustained IT investment with good management achieved superior bottom line performance in terms of productivity, profitability and sales growth.

So what does innovation look like? Moving from one “cloud” to another, let’s take the trend towards Cloud computing as one example. Much maligned as simply the next stage in the internet’s evolution, the ‘cloud’ provides the means through which everything — from computing power to computing infrastructure, applications, business processes, personal collaboration — can be delivered to you, or your customers, as a service wherever and whenever it is needed. New services are developed and rolled out faster and more efficiently, data centre management costs are cut, your IT people are free to do more for the business. Innovation continues, customers are connected, internal costs are cut. What’s not to like?

We are seeing heavy investment here. Indeed, almost $100m in highly strategic “cloud foundation” deals with virtualisation and computing management capabilities. Innovation transcends business size and business type. Here’s another innovation example in Virgin Media, having made the leap to IT automation and bought its data centre management costs under control, all the while meeting the reliability and time-to-market requirements of its digital TV, broadband, phone and mobile businesses.

Italian entertainment company Dada is able to stay ahead by delivering an extensive catalogue of high quality content to customers through cutting-edge, yet reliable online applications. Another example of how automation can help an organisation reap the dual rewards of cost savings and operational efficiency.

Yet, there are still those organisations that have not embraced change so successfully or openly. The reasons for this are complex, although no less complex than the business challenges presented by the current economy, which, if not properly addressed, could lead to serious failures. A cultural reluctance for change, fear of reprisals from the board,  misunderstanding of cost versus return and concerns relating to security and best practice in new technologies such as cloud are just a few of the reasons holding firms back.

I believe that innovation can only occur via two ways. The first is that the software industry has a duty to communicate the ‘full story’ around innovation. Yes, innovation such as “Cloud” presents enormous, incredible potential. However, as an industry it’s easy to get carried away talking about the limitless opportunities. Without careful planning and management the benefits can be outweighed by potential risk. Open, honest and consultative dialogue exposing the risks and the benefits will give businesses the tools and confidence to run new projects securely.

The second is “Board buy-in”. As an industry we need to do more than lay out our stall. It’s going to become increasingly important to let the customer tell the story. That’s what’s really compelling. ‘Bits and bites’ won’t sell investment in fledgling and sometimes costly new technologies to the board. Examples of businesses solving mission critical problems – and seeing a cash return – are vital.

Events such as the eruption of Eyjafjallajökull are unpredictable, disruptive and beyond technological control. Like the proverbial pebble tossed in the pool of water, these events alter everything – seen and unseen – and create a new reality. In the same way, the recent economic meltdown has again forced the door of innovation and creativity, unleashing the very human desire to create something better, something new.