Who Drives Innovation?
Management? IT? Business?
In the age of Digital Transformation, companies have to face changes in technology and hence need to place a bet on the future. New ideas should be developed, tested and, if not successfully implemented, quickly discarded or adapted. The increasing rate of change belongs to our daily lives and betting on the future is a big part of these modern trends. As a result, innovation and agility become more important, rather than absolute planning reliability. So, who bets on the future?
The IT department as the driving force behind Cloud and SaaS applications
Topics such as Cloud, Analytics/Big Data, Artificial Intelligence, Internet of Things and Blockchain are IT-related topics. Instead of only focusing on supporting the core business, as usual in IT, it is also rather intended to innovate businesses.
Therefore, the IT department is only the driving force when it comes to cloud and SaaS applications. This is because the budgets for these IT-related services are located historically within the IT department. Also, specialist departments of all kinds such as staff development and the creation of sales often represent the "demand side,” as the survey showed.
Management and departments as a source of innovation
In all other areas, management and specialist areas are at least initiators and often also the financial stakeholders of the investment. After all, this also involves making core business processes more efficient or opening up entirely new fields of business.
Analytics/Big Data applications are already implemented in almost 50% of the companies surveyed. However, corresponding investments are being driven forward in particular by tax authorities, which means they still seem to be close to the "traditional" reporting of key financial figures. Nonetheless, marketing and sales are still crucial stakeholders. Also, the production, as well as particular areas, such as energy data management, were also mentioned.
The topic of Internet of Things (IoT) is already wholly or partly implemented by a third of those surveyed. The IoT initiatives are (not surprisingly) mainly driven by the production and engineering areas of companies. Just as often, (somewhat more surprising) marketing and sales were declared as IoT pioneers in the survey. Significant specialist areas are network and infrastructure operation as well as facility management.
50% of the survey participants do not even consider artificial intelligence, and additionally, 20% are still in an "early discussion phase.” However, the wide range of potential areas of application for artificial intelligence can be seen from the diversity within the stakeholders who are driving the topic forward within their company: Most frequently mentioned were sales and marketing, followed by manufacturing and logistics, as well as administration and controlling. Besides, there is a wide range of stakeholders from particular areas such as development, traffic planning, network operation or hospital management, right up to cross-sectional specialist areas such as building management automation, energy management or nature conservation. Dedicated "Digital Offices" and a "Department for Innovation" were also mentioned.
Blockchain is currently only discussed by a quarter of the companies surveyed. Nevertheless, the fields of application are numerous, as you can see when you ask about the driving force within the companies: in addition to IT and dedicated "Innovation Labs,” departments such as production, purchasing, and materials management as well as sales are interested in blockchain. Even within an industry, the most diverse fields of application are often seen, in the energy supply sector, such as network operation, energy trading, and sales.
Are purchases made past the IT department?
Therefore, the driving force behind most current IT innovation topics are usually management and specialist areas - and not the IT itself. Does this mean that purchases are made without IT involvement? The dangers of such behavior and the creation of a so-called "shadow IT" are well known, especially about security and data protection, but also to the increasing complexity and lack of integration capability of such stand-alone IT solutions. However, our last year's study for Arvato Systems, "Cloud and Multi-Cloud Use in Germany,” showed clearly that the influence of business units on IT investment decisions is growing significantly, but the influence of IT is not necessarily decreasing as a result.
Although the departments increasingly provided budgets, all parties seem to have understood that only a holistic view, which includes functional and technical as well as organizational and regulatory dimensions, makes investments in new technologies beneficial and low-risk. We will look at the question of the areas of application in which these divisions invest in detail later on.
Cloud, Big Data, IoT, Artificial Intelligence, Blockchain - how far are German companies in the implementation?
The market analysis and consulting firm Pierre Audoin Consultants (PAC) asked the above question on behalf of Arvato Systems during February and March of 2018 within a telephone survey on application areas, investment plans and attitudes to the currently dominant topics of digitization - cloud, big data, IoT, Artificial Intelligence and blockchain. In addition to IT decision-makers, the management and specialist departments of German companies were interviewed to look at different perspectives.