In a recent survey of IT professionals by the Corporate IT Forum, delivering innovation was revealed as the leading operational target – indeed, nearly a quarter of respondents said it was their top strategic goal. In tough economic times, organisations are looking to achieve a competitive advantage by finding new ways to simplify...
processes, increase productivity and cut costs.
But while innovation is an important goal, delivering it is another matter – particularly when day-to-day tasks have to take priority.
And it seems they do: the Corporate IT Forum found in its November 2012 Reality Checker survey, that while 50% of companies say they seek out innovation, 9 out of ten dedicate less than 5% of their working week to it.
So how do organisations try to foster the sort of ideas that can revolutionise business processes?
Some create a separate team and funding specifically for innovation, others supply both through the normal project process. And over the last couple of years, it is this latter approach that appears to be becoming the norm, with dedicated teams becoming less popular.
And, perhaps as a result, the impetus for change is now coming from a different source too.
Whereas a year or two ago, corporate IT felt itself to be the main driver for corporate innovation, now it is the business that appears to be in the driving seat.
Indeed, a recent survey for the Economist, sponsored by Oracle, found that IT departments tended to be under-utilised, with more than half saying IT's primary responsibility was simply to implement innovations rather than generate them.
For more on business innovation with enterprise software
Despite this, though, more than half of those surveyed by the Corporate IT Forum said that IT was a heavy contributor to innovation.
As Adrian Simpson, chief innovation officer at SAP points out, "It's sometimes quite hard for business users to understand what can be done. It's the IT people who have a better grip."
He adds: "The business doesn't know what it doesn't know."
Increasingly, organisations are looking to their customers and suppliers to help come up with ideas that can improve business processes. This makes obvious sense, as a company's partners are often in a position to make comparisons with rival organisations and see where one approach works better than another.
These days, most large organisations prefer to deliver business innovation through comparatively small, incremental projects rather than through a disruptive major overhaul – indeed, three-quarters of organisations say that this is their preferred approach, according to the forum.
"The advantage is in doing things quickly and repeatedly - it's not about large, long-running projects any more," says Adrian Simpson. "Things like 'how do you enable short, sharp processes like lead requests and purchasing approvals?'"
Most organisations say they struggle to find enough time, flexibility and resources for real innovation – in part because it can be difficult to objectively demonstrate its value.
However the Corporate IT Forum Reality Checker survey found that only 16% of organisations currently measure the impact innovation has within their organisation. One-third say they plan to start doing so - hopefully making it a little easier in future to justify the resources required.
Case study: DMG Media turns to mobile to prove Metro’s worth
The Metro free newspaper has the third-highest circulation of any in the country - but proving that is difficult when customers pick a copy up free.
"Others have point of sale (POS) information, providing good information for marketing and circulation, but Metro had none of that," says Sam Duncan-Brown, head of innovation at the newspaper’s publisher DMG Media.
"We had to work out if we could prove to our advertising customers that Metro was being picked up and read where we said it was."
The lack of staff at POS also made it extremely difficult to make sure that newspaper racks were neither over- nor under-stocked. DMG Media dealt with this through a laborious paper-based process that involved the drivers recording delivery times, number of copies delivered and the number left over.
"None of the van drivers was filling in those bits of paper until they were pretty much back in their hut, drinking their cup of tea," says Duncan-Brown.
The solution - which netted the company second place in the Corporate IT Forum’s ‘Innovation in Mobile’ Real IT award last year - was a total overhaul of the process, giving drivers a ruggedised mobile device with a low-cost data SIM, with the drivers' manifest published on the cloud.
"They can see exactly how many copies to deliver and where. They need to verify that they've done it, so we ask them to scan a QR code on the rack," says Duncan-Brown.
"It checks the driver in, and we also ask them to take a picture of before and after, so we can verify the number of copies that were left and prove that all the copies have been put in."
One effect of the project is that the company no longer needs to provide a manual monitoring service to confirm its circulation figures with the Audit Bureau of Circulation (ABC).
"That cost us £80,000-£90,000 per year - a bunch of people going out and watching the copies being taken - and that just does not need to happen any more, because ABC have access," says Duncan-Brown.
The next stage in the transformation is the possibility of creating smart racks that track the number of copies removed. While the pilot works well, says Duncan-Brown, this comes at a high cost, meaning the company plans to install it only at high-footfall stations.
While DMG does have a dedicated innovation team, Duncan-Brown believes that the best results come when an innovative attitude is spread throughout an organisation.
"When you set up an innovation team, the expectation is that they will deliver radical solutions; but, in reality, a radical idea comes along once every five years," he says.
"The rest of the time, you're doing incremental work; and you increase the likelihood of generating those sorts of ideas if you spread it through the whole organisation."
Case study: Account NI uses Oracle BPM software to cut invoice creation time
Belfast-based Account NI, which handles finance processing for Northern Ireland Civil Service Departments, was taking three days to create invoices until it implemented Oracle Business Process Management Suite 11g.
It has now cut that time to just minutes, through a complete overhaul that's not just automated existing business processes but simplified them too.
The improvement comes as part of an ongoing project which first went live in March 2011, starting with sales, invoicing and recording/receipting.
"Initially, we wanted to dip our toes. We wanted to make sure we didn't jump in at the deep end and do something that fails," says Phil Mulhall of BT, which implemented the system.
"So we started with just a couple of BPM processes to give us confidence."
Because these were high-volume repetitive tasks, though, the improvements really added up, says Elizabeth Scott, head of bill to cash at Account NI.
"There have been big savings. When Department of Justice reforms were rolled out, we didn't need any additional staff," she says. "Work that used to take a week can now be turned around in an hour."
Account NI is now looking at extending the system to the process of making foreign payments, a much more complex process.
"We see it as a process of incremental changes," says Mulhall. "They can seem small at the time, but when you look back over the past 12 months, we see we have made radical changes to the way we do business processes here."
Case study: Reynolds Catering uses Infor’s M3 to cut food waste
Until its introduction of Infor M3 last year, says Richard Calder, IT and business systems manager of Reynolds Catering, the company's legacy ERP and supply chain systems were straining at the seams.
"In common with a number of companies, we'd grown very rapidly in the three or four years before we put in M3, and had grown to a £100 million company," he says. "The legacy system was designed just for fresh produce, and we were doing a lot more than that."
M3, says Calder, enabled the company to cut product waste through better management of chilled products and improve its order entry systems.
But the improvements haven't ended there. Keen to continue taking advantage of the new system's capabilities, Reynolds set up a business improvement team consisting of software developers, BI specialists, business/system analysts and project managers. This team is charged specifically with using M3 to find new ways to sharpen up business processes, and its work is reviewed regularly at board level to make sure it's aligned with overall business strategy.
"We'd seen various companies within our sphere put in ERP systems with varying degrees of success, and then take a huge sigh of relief that they've done it and leave the whole thing alone from then on," he says. "We were keen to build on what we'd done."
Since the introduction of M3 a little over a year ago, the company's made an impressive 82 new improvements to business processes. Some of these have been minor - developing an application to scan cases automatically, freeing two members of staff for other duties. Others have had a big effect on the business as a whole.
"We take an increasing number of orders electronically, but with orders taken on the phone, one of the problems was that people were making mistakes that were often very expensive to rectify," says Calder. "We introduced a simple order confirmation process using email, and errors dropped by over half. It was relatively simple and straightforward, but significant."
The team is now looking at customer lead management, aiming to mine sales information more effectively and make sure customer leads don't fall through the cracks.
The company's also piloting an electronic proof of delivery (PoD) system designed to give the call centre more information about the status of deliveries: "definitely the next biggest area of focus," says Alex Furner, who heads up software development in the company's business process improvement team.