Learning to build an IT innovation platform

Information Technology (IT) pervades every aspect of a firm's value chain as a vast electronic network of interconnected applications and data. Managers perceive the immense potential of this complex infrastructure to enhance products and processes and create altogether new ones. However, some have gone a step further and determined how to harness untapped IT business value again and again to create innovative and valuable applications by reconfiguring existing systems in new ways. Creative adaptation of existing functionality (such as broadband over power lines) to enable entirely new applications (such as real-time power grid monitoring) rules the day for these forward-thinking business leaders.

What separates successful IT innovators from others? Is luck a primary driver, or are there deliberate actions that management can take to raise the odds of success? Given substantial implications for business performance, we set out to explore this question by interviewing senior IS and business executives with demonstrated track records of extracting untapped IT business value from existing IT infrastructural assets. Our objective was to uncover underlying mechanisms linking organizational actions with innovation outcomes.

What we learned is that while serendipity can sometimes play a role, developing a specialized set of competencies, which we call an IT innovation platform, plays a much larger and decisive role. IT capabilities drive innovation by enabling organizations to redesign business processes, craft a competitive strategy, and identify and cater to customer preferences. As we discuss below, understanding what these competencies are, how they are developed, and how they work together holistically can yield significant new sources of growth and bolster performance. While our research is exploratory in nature and requires rigorous testing, we believe that this new perspective on IT business value expands managerial understanding of how to extract ever-greater value from existing IT assets.