Innovation is the foundation for maintaining a competitive edge, and 96% of professionals agree that increasing innovation spend is part of their organization's strategic priorities, according to a Rimini Street survey of more than 900 IT and finance decision makers.
However, more than three-fourths of respondents said their organization is delegating too much money to just "keeping the lights on," and 71% feel there is no more value left to be extracted from their "existing IT real estate."
Locking down budgets is tough for 71% of respondents who worry about where their organization will find the funds. Additionally, half of respondents said they have a difficult time effectively convincing their board that IT investments are vital to overall business innovation.
Spending on innovation comes with the hope of a healthy return on investment. However, sometimes CIOs have a hard time justifying such financial risks.
Still, the fear of becoming a "digital laggard" should be enough to invest in more than just keeping the lights on. Respondents who have seen positive impacts from innovation funding have also seen a 14% increase in revenue and a 12% decrease in operations costs, according to the survey.
Laggards on the other hand not only face "perish[ing]," they also spend about 20% more than competitors to attract talent because about one-fifth of laggards think their organization lacks the talent needed.
However, it takes time to show financial improvements. That is why companies are adopting a more experimental approach to innovation in the form agile or bimodal development.
Innovation at structured paces designed for either predictable or disruptive change helps CIOs better understand the gradual impact of innovations. These help establish how technologies first impact the workforce and productivity before the changes can translate to dollar amounts.