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The Innovation Management (IM) capability helps exploit IT in new and pioneering ways to satisfy business objectives.

• Increase innovation throughput from the IT function by fostering a pioneering culture informed by approaches, methods, and tools for innovative thinking and problem solving.
• Incentivize collaboration with other business units to identify novel uses of IT to support business operations, products, and services.
• Improve accountability for innovation management by measuring business value and other meaningful metrics.
• Promote informed risk taking — for example, by:
  • Harvesting key learnings from unsuccessful innovation initiatives using non- accusatory approaches.
  • Supporting innovative performance of teams and individual employees.
  • Providing more control over how employees approach solving business challenges.

The Innovation Management (IM) capability helps improve the throughput of and yield from novel uses of IT and technology-driven innovation to solve business challenges.

Innovation has long been recognized as a driver of sustainable competitive advantage in business¹. The topic of innovation is increasingly high on the agenda of senior business leaders and, now more than ever, they are looking to the CIO and senior IT managers to support and drive business innovation. The IT function is perhaps uniquely positioned for this challenge because of its connected view of the organization, and its requirement to continually employ strategic technological advancement to keep the organization secure and competitive.

The IT function is, however, regularly accused of holding back business innovation because it does not always share the same cultural, managerial, and practical perspectives as the rest of the organization². By developing an effective Innovation Management (IM) capability, an organization can implement appropriate innovation practices that fit with its specific context, allowing the IT function to facilitate technology-driven business innovation.

The Innovation Management (IM) capability is the ability to identify, fund, and measure technology-driven business innovation, which can be:

• Applied within the IT function.
• Applied to the organization's operations.
• Applied to the organization's products and services.

Representative POMs are described for IM at each level of maturity.

2Basic

• Practice

  Focus innovation efforts on cost reductions and/or process efficiency improvements or gains.

  Outcome

  Cost reduction from innovation efforts can be readily visible and can make a strategic contribution to the business.

  Metric

  Financial savings through cost reductions and/or efficiency gains.

• Practice

  Create and encourage development of multi-disciplinary teams within the IT function.

  Outcome

  Increased collaboration on innovation efforts is fostered across the IT function.

  Metric

  Number and percentage of teams with appropriate levels of multi-disciplinary representation.

• Practice

  Provide mentoring and training on technology-driven innovation.

  Outcomes

  • Initial training helps primarily with understanding what technology-driven innovation is.
  • More in-depth development helps build deeper skills and expertise in technology-driven innovation practices.

  Metric

  Percentage of the work force trained in technology-driven innovation.

• Practice

  Promote the use of collaborative tools and platforms to support technology-driven innovation.

  Outcome

  The collective power of employees can be harnessed by providing more inclusive and comprehensive collaboration and innovation platforms.

  Metrics

  • Levels of user activity on various tools and platforms.
  • Number of technology-driven innovation ideas supported.

• Practice

  Communicate the impact of technology-driven innovation activities within the IT function.

  Outcome

  There is growing recognition for innovative efforts.

  Metric

  Number of technology-driven innovation case studies captured for communication.

3Intermediate

• Practice

  Broaden technology-driven innovation efforts to include enhancing business operations.

  Outcome

  The IT function is seen to drive operational excellence and deliver value.

  Metrics

  • Number of innovative solutions that improve operational excellence.
  • Cumulative business value of technology-driven innovation solutions.

• Practice

  Encourage and support development of cross-functional teams between the IT function and some other business units.

  Outcome

  Collaborative capability is extended within and between the IT function and key business units, increasing potential to share knowledge and identify opportunities to develop innovative business solutions.

  Metric

  Percentage of teams with appropriate levels of cross-functional representation.

• Practice

  Offer career development opportunities, such as technical leadership career tracks, job rotations, or special assignments to other parts of the organization.

  Outcome

  Cross-fertilization of ideas and practices allows employees to develop the technical expertise and/or business acumen to identify and deliver technology-driven business innovation.

  Metrics

  • Percentage of total employees on technical leadership career paths.
  • Number of job rotations available.

• Practice

  Catalogue innovation tools for use across the IT function, and share them with the rest of the organization.

  Outcome

  Employees have access to proven innovation tools and practices.

  Metrics

  • Utilization rate of innovation tools.
  • User rating assigned to each tool.

• Practice

  Validate that innovation metrics communicate the business impact of technology-driven innovation.

  Outcome

  Sharing results increases understanding regarding the impact of technology- driven innovation across the organization.

  Metrics

  • Return on investment of innovation spending.
  • Cumulative total of business costs eliminated by technology-driven innovation.

4Advanced

• Practice

  Broaden innovation efforts to enable the development of new products, services, or business processes.

  Outcome

  The credibility of the IT function to creatively solve business problems is increased.

  Metrics

  • Number of new products or services developed through technology-driven innovation.
  • New revenue from technology-driven innovation as a percentage of total revenue.

• Practice

  Support and leverage cross-functional and inter-disciplinary teams across the organization for technology-driven innovation projects.

  Outcome

  A collaborative culture is reinforced and the perception of ‘siloed’ innovation efforts across the organization is less prevalent.

  Metric

  The number of distinct functions or disciplines adequately represented in the cross-functional/inter-disciplinary teams.

• Practice

  Formalize innovation champion/evangelist positions across the organization.

  Outcome

  A culture of technology-driven innovation is shared at the organizational level.

  Metric

  Number of job descriptions containing defined roles and responsibilities for innovation.

• Practice

  Integrate and widely use tools and best-known methods for technology- driven innovation across the organization.

  Outcome

  The integration of tools and practices is comprehensive across the organization, so that employees have access to appropriate and relevant supports for enabling technology-driven innovation.

  Metrics

  • Rate of utilization of innovation tools.
  • Effectiveness ratings for each tool/practice.

• Practice

  Ensure technology-driven innovation proposals that have co-funding from multiple business units receive due consideration.

  Outcome

  The business value of technology-driven innovation proposals receives strong upfront validation and endorsement if they are sponsored by multiple business units.

  Metric

  Percentage of technology-driven innovation projects that are co-funded by other business units.

• Practice

  Communicate the impact of technology-driven innovation activities across the organization.

  Outcome

  Credibility of technology-driven innovation activities is enhanced and generates higher levels of support for engaging in future activities.

  Metric

  Frequency, breadth, and diversity of communications across the organization.

5Optimized

• Practice

  Broaden the focus of technology-driven innovation to include organizational transformation opportunities.

  Outcome

  The potential to create strategic advantage over industry peers using technology-driven innovation is heightened.

  Metrics

  • Number of new products or services enabled through technology-driven innovation.
  • The financial value derived from technology-enabled innovation.

• Practice

  Implement organization-wide guidelines to systematically encourage external alliances for technology-driven innovation — for example, with suppliers, customers, academia, external labs, and so on.

  Outcome

  The IT function is seen as a broker of technology-driven innovation between external parties and internal beneficiaries.

  Metrics

  • Number of innovations adopted that originated externally.
  • Return on investment from external innovations adopted.

• Practice

  Continue to reinforce desirable innovative behaviours across the wider organization by, for example, providing appropriate incentives, eradicating disincentives, implementing mentoring and coaching programmes, and so on.

  Outcome

  Organizational culture around technology-driven innovation is fully embedded and embraced by all employees.

  Metric

  Number of technology-driven innovation ideas submitted per number of employees, per quarter.

• Practice

  Reinforce a culture of continual improvement regarding application of proven practices and tools that can support technology-driven innovation.

  Outcome

  Constantly seeking and testing novel methods ensures the most effective approaches are adopted.

  Metrics

  • Frequency of reviews on technology-driven innovation practices.
  • Number of updates to technology-driven innovation practices.

• Practice

  Systematically prioritize win–win opportunities for co-funding IT innovation projects with other business units.

  Outcome

  The business relevance of IT innovation projects receives strong upfront validation and endorsement by business units.

  Metric

  Percentage of IT innovation projects co-funded by other business units.

This capability was introduced in Revision 16 as a new critical capability.

It was deprecated in Revision 18.10, being updated by Innovation Management (18.10).

The following CCs cover topics that are related to IM in some way:

BARBenefits Assessment and Realization

Assessing and realizing benefits.

BARBenefits Assessment and Realization

Benefits assessment of technology driven innovation projects.

FFFunding and Financing

Allocation of funding for technology-driven innovation.

KAMKnowledge Asset Management

Details on the availability of knowledge that can enhance problem solving and understanding when conducting technology driven innovation.

PAMPeople Asset Management

Managing IT employees' skillsets.

PPPPortfolio Planning and Prioritization

Practices for Prioritizing technology driven innovation activities.

RDEResearch, Development and Engineering

Testing new technologies.

RDEResearch, Development and Engineering

Validation of the potential of new technologies to support innovative business solutions.

REMRelationship Management

Promotion of greater collaboration, understanding of business issues, and development of networks across the organization and beyond to support technology-driven innovation.

SPStrategic Planning

The IT vision and strategy from which to derive the vision for technology-driven innovation.