Business Execs: 'Innovation Gridlock' Inhibits Positive Change

Organizations need to free up technology dollars spent on operations and instead should invest in driving innovation, according to a new study released by HP.

'Organizations should employ a holistic approach with a combination of hardware, software and services, to drive budget from operations to innovation (and) break the gridlock,' says Michael Thacker, a spokesman for HP Enterprise Business.

A recent survey of business and technology executives reveals that more than half of business executives indicated their organizations suffer from 'innovation gridlock' - where IT organizations are blocked from driving new business innovation because the majority of technology funding is consumed by operating the status quo.

Almost 70 percent of all respondents indicated they are unable to invest in new technology to meet changing business needs. The study also found that 40 percent of respondents' current budgets were spent on mission-critical systems and 30 percent on 'legacy' systems, with only 30 percent left for important new technology initiatives.

Innovation gridlock also hurts the bottom line. According to the survey:

• Ninety-five percent of business and technology executives said innovation gridlock resulted in lost opportunities for their organizations.
• Ninety-one percent felt that innovation gridlock cost their organizations in lost effort.
• In addition, 73 percent of business executives indicated that innovation gridlock prevented them from generating real flexibility in their operations.
• Nearly 60 percent of executives felt this gridlock also prevented their organizations from keeping up with their competition.

But there are steps that can be taken to improve the situation.

CIOs can break the innovation gridlock by reclaiming operations dollars that can be invested in innovation. Thacker says it can be done by:

Creating 'self-funding' projects that allow for transformation within current budgetary constraints and offer quick paybacks. Self-funding are funds created from projects that free up operational dollars, that can then be invested in new IT projects to drive innovation for the business.

Designing new solutions so IT organizations can quickly and easily add new functionality as the business requires it.

Freeing up funds trapped in operations. Organizations should find ways to drive a continual reduction in operating costs through best practices and technology. This lowers the costs of operations.  It also reduces the burden of legacy and mission critical systems and reclaims funds for innovation.

Still there are stumbling blocks to change. Thacker explained that rigid infrastructure and aging applications continue to consume the bulk of IT budgets in operations, and severely restricts the amount that can be spent on innovation.

HP offers qualified clients a complimentary applications modernization transformation session. In addition, HP modernization funding options provide clients with access to capital based on the value of existing systems, helping to fund investments in new technology and innovation.

Some other HP products and services that can promote change are the server management software suite, efficient servers, and the HP financial solution analysis.

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Edited by Michael Dinan