Most Organizations Neglect IT Innovation Best Practices, Survey Finds

October, 2018

With the rapid pace of technology change and the increased competition from faster rivals, you would think that businesses would be champing at the bit to leverage their IT groups for innovation. But too many organizations do not give their IT groups the tools that they need to come up with innovations that could allow the business to compete better, faster, and cheaper. This is a key takeaway from the Computer Economics IT management best practices study, which includes the use of four innovation best practices that we added this year.

Figure 2 from our full study, IT Management Best Practices 2018/2019, shows the top five least mature best practices, as reported by survey respondents. Two of these five best practices—innovation/ideation portal and IT R&D budget—fall into our innovation category and rank among the least mature.

BestPrac fig 2WEB - Most Organizations Neglect IT Innovation Best Practices, Survey Finds

Innovation/ideation portal is second on the list, with only 5% of respondents practicing formally and consistently. An innovation/ideation portal is a company-wide system allowing workers to submit ideas or suggestions and vote on ideas of others so that the most popular can be prioritized. Some compare them to old-school suggestion boxes, but they go far beyond dropping ideas in a box for review by a small group of managers. These portals often use gamification techniques (e.g., contests, leaderboards, recognition, and rewards) to motivate workers to submit ideas and to vote on or evaluate those submitted by others. Essentially, these portals serve as a platform for crowdsourcing new ideas and allow the “wisdom of the crowd” to surface those that are most promising.

The practice of using an IT research and development (R&D) budget is also not mature, with only 6% of respondents practicing formally and consistently. It refers to monies that an IT organization sets aside for researching, developing, and conducting pilot projects for new technologies that may or may not ultimately be adopted by the organization. Without a pot of money available for R&D, the IT organization will not be able to test out new technologies to see which are worth pursuing.

Respondents as a whole report higher levels of maturity for two other innovation practices, but they are still far below necessary levels. IT leaders participate in business strategy formally and consistently in only 26% of organizations, and IT executives take the lead for digital transformation in only 21% of organizations.

“It’s surprising that so many business executives do not give IT leaders any budget for research and development,” said Tom Dunlap, director of research for Computer Economics, an Irvine, Calif.-based research firm. “And, I don’t understand how any business can claim to be innovative without formally encouraging the ideas of its entire workforce. Moreover, when business executives are formulating business strategy, in most organizations IT leaders are not even in the room.”

In the full study, we examine the growth and maturity of 35 IT management practices. Some of these are well-established disciplines and are widely accepted. Others are gaining traction among leading-edge organizations. Still other practices are being widely promoted by tool vendors and consultants but only rarely adopted, and it remains uncertain whether they will endure. Our goal in this study is to provide IT executives with real-world data on how widely each practice is implemented, a basis for comparing their organizations with their peers, and a means of identifying emerging best practices.

This study is now in its 14th year. Each year, we ask IT organizations in our annual survey to what extent they have adopted a selected list of IT management best practices. Survey participants have five response choices:

  • No Activity: We are not practicing this discipline in any way.
  • Implementing: We are in process of implementing this best practice.
  • Practicing Informally: We do not have formal policies or procedures for this discipline, but we do practice it in an informal or ad-hoc manner.
  • Practicing Formally but Inconsistently: We have formal policies and procedures for this discipline, but we do not follow them consistently or to the extent that we should.
  • Practicing Formally and Consistently: We have formal policies and procedures for this discipline and we follow them consistently.

The best practices in the study are as follows:

  • IT governance practices: IT strategic planning, executive IT steering committee, IT project portfolio management, project management office, IT change control board, and organizational change management.
  • IT financial management practices: IT personnel time tracking, service-based cost accounting, chargeback of IT costs, showback of IT costs, IT service catalog, and benchmarking IT spending.
  • IT operational management practices: IT policies and procedures, enterprise architecture, IT Infrastructure Library (ITIL), IT asset management system, bring your own device, user-satisfaction surveying, and IT performance metrics.
  • IT security and risk management practices: security policies, data classification and retention, IT security compliance audits, security incident management, disaster recovery planning, disaster recovery testing, and business continuity planning.
  • Application development practices: system development life cycle, agile development, software change management process, DevOps, and post-implementation audits.
  • Innovation practice: IT participation in business strategy, IT leadership for digital transformation, IT R&D budget, innovation/ideation portal.  

This study is designed to increase the awareness of IT leaders concerning what are the best practices in IT management, provide benchmarks against which an IT organization can compare its own adoption and practice level, and justify investments to improve an organization’s IT management practices.

This Research Byte is a brief overview of our report on this subject, IT Management Best Practices 2018-2019. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).