Posted by: Monideepa Tarafdar | June 1, 2010

Using Information Technology for Innovation: A Three-pronged Strategy

One major pre-occupation of many firms is how they can make their innovation process more effective and increase pay-offs from their R&D portfolio. Innovation is an information intensive process that requires problem solving and collaboration in both structured and emergent ways. An important question therefore is – How can IT be used to improve the process? We hear about sophisticated analytics and data crunching that aid problem solving, design tools that facilitate simulation and portals that enable R&D folks to post thoughts and share knowledge (see, for example,  Brynjolfsson and Schrage 2009,  McAffee 2009). However, IT is much more than the tools and enlightened use of IT requires much more that tool-procurement and infrastructure building. Undertaking a study to learn how leading innovators have used information technology (IT) to make their innovation activities more effective and efficient, Steve Gordon and I (Gordon and Tarafdar 2010) find that companies require three things in order to do so – Tools, Capabilities and Control.

Having the necessary tools means R&D folks have access to the applications that they need to carry out their innovation-related tasks. The range from idea generation tools such as MindManager and ConceptDraw, analysis software such as SAS, to collaboration and portfolio management tools such as SharePoint. Many of these tools are indispensable to various tasks in the R&D process.

However, it is not enough for the company or the R&D department to just acquire the tools. Scientists and project managers need to be aware of them and how they can be used. Many scientists we talked to, simply said, “we don’t know that such and such is there”. Another thing that may happen is that R&D and corporate IT may find themselves in a tussle as to who should buy and maintain the tools. This would seem to be no-brainer – after all , if R&D is using the tools then they should decide what applications to buy and how to use them. In reality however, complications arise. Corporate IT is often driven by the standardization zeal and may insist on buying applications which are “compatible” with existing standards and infrastructure. Or, worse, they may actually mandate the use of certain tools because they found out about them through IT industry vendors. Such tools almost never “stick”, that is, R&D folks simply do not use them. We repeatedly came across the sentiment from scientists, “You (i.e. corporate IT) cannot tell us to use something simply by mandating it. We need to decide what helps us and you need to help us find the money to buy them and technical expertise to maintain them.” So, one best practice in this situation is that R&D departments be allowed to control their own IT tools, especially those that are specialized and unique. Another is to put significant IT resources directly in the hands of the R&D department, which they can use in ways that address their needs. Yet another is for R&D and corporate IT to determine variance policies for permitting deviations from standardization when appropriate and for supporting the tools involved.

The third leg of the “IT for Innovation” stool is that of capabilities. R&D tasks require many activities that are not “one-off”, but need to be done on a sustained basis and involve many different constituents such as applications, infrastructures, work flows and co-ordination structures. We call them capabilities for doing the particular activity. One such capability for instance is the knowledge management capability. This requires not only the software and hardware for searching, cataloging, accessing and archiving knowledge, it also requires processes and routines to ensure that innovators know how to use the system, are aware of IP-related concerns, and find the application useful- so that the “knowledge management system” becomes the central repository that they refer to. All of this together forms the “knowledge management capability”, that the innovation process can benefit from. Other IT-based capabilities that are necessary for innovation include collaboration, portfolio and project management and competitive intelligence.

Tools, Control and Capabilities – R&D managers and IT managers thus need to understand this three-pronged role that IT can play in streamlining and accelerating the innovation process.

References:

Brynjolfsson , E and Schrage, M, The New, Faster Face of Innovation, Wall Street Journal Special Report, August 17, 2009

Gordon, S.R., and Tarafdar, M, Boosting Innovation with Information Systems, Sloan Management Review, Summer 2010.

McAffee, A., Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges (Harvard Business Press, 2009

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