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The BPI Network Journal

Q4 2016

Editor's Note

Shifting into the New Year

Thanks to the Business Performance Innovation (BPI) Network’s extraordinary community of innovators, 2016 was an extremely thought-provoking year. In the past year, we have seen membership in this innovation-focused community increase by 42 percent and have welcomed leaders from BASF, Bed Bath & Beyond, Lufthansa Innovation Hub, Philips, and Whirlpool to our Leadership Board. We have also had the honor of interviewing numerous Game Changers, executives who are thinking and acting differently in order to activate real change. As the network continues to grow, so has our opportunity to share new trends, new insights, and cover the latest and greatest innovative trends to help you differentiate between hype and reality.

We covered an array of topics this year: disruptive insurance models, the evolving role of the CFO in an increasingly complex multinational regulatory system, the impact of IoT on the industrial sector, and the evolution of the CMO. We want to thank our members for supporting our various initiatives, and sharing your unique insights.

One study to highlight was actually the result of partnering with our sister network, the Chief Marketing Officer (CMO) Council, and Deloitte. The report, “The CMO Shift to Gaining Business Lift,” reveals the evolution of the very role of the CMO, away from the traditional role of mere global brand ambassador, instead adopting the new role as business driver, change agent, and customer experience champion. In fact, 27 percent of marketing respondents believe that the CMO is the principal growth driver within their organization, outpacing the CEO (22 percent) or Line of Business leadership (11 percent).

This shift isn’t just impacting the marketing department as the actions of marketing leaders are sending ripples of change across the entire organization. As CMOs are focusing more on customer experience strategy and intelligence alignment, they are seeking out new infrastructure, data and analytics tools, and platforms that look to connect engagement to revenue, heralding a new trend of organizations looking to advance beyond MarTech stacks towards RevTech solutions. This will require even more alignment between marketing and technology teams if organizations truly want to be considered innovation drivers that are delivering profitable customer experiences.

This report has proven to be a must-read for any executive working across functional silos to facilitate business transformation and growth as CMOs begin to reach across marketing’s functional lines to better partner with growth centers and business influencers across the organization. For more information, please download “The CMO Shift to Gaining Business Lift” here.

We highlighted this report because it has actually led us directly into a key area of research and investigation in 2017. According to respondents, only one in four marketers actually focus on the aftermarket, which is surprising because this strategic focus area is crucial to delivering a total, end-to-end customer experience. Therefore, in Q1 we are launching a new program on the aftermarket of consumer goods. Leading executives will address the importance of the aftermarket, and strategize best-practices on how be successful in this realm.

The CMO Council, BPI Network, and LiveTechnology are teaming up to digitally revolutionize and elevate the experience of owning, operating, maintaining, troubleshooting, and repairing durable goods sourced from leading manufacturers supported by their retail and aftermarket service partners. 91 percent of unhappy customers will not return to purchase products, so don’t let your customer get away because of aftermarket neglect. Make sure to keep an eye out for “Elevate What Consumers Appreciate” at the beginning of 2017.

Another strategic focus in heading into 2017 will be a continuation of our investigation into the Industrial Internet of Things. This past year, the BPI Network and Penton's new IoT Institute joined forces to facilitate cross-functional peer-to-peer networking, advice, and education focused on IoT value planning and organizational readiness. In November, at Penton's premier IoT Emerge event in Chicago, BPI Network Director of Thought Leadership Dave Murray led a panel discussion with Andrew Minteer, the Director of IoT at Navistar, Nahel Gandhi, the Global Director of IoT at CNH Industrial, Terry Lewis, the Digital and Technology Director at Caterpillar, and Gary Trott, VP of Intelligent Lighting at CREE around the state of IIoT planning and adoption worldwide. The executives shared IIoT obstacles and drivers, as well as the economic, operational, safety, and security gains being achieved by early adopters in the aerospace, transportation, plant/property management, manufacturing, utility, and agricultural sectors.  

In early 2017, the BPI Network will launch a new report on the insights from a survey of 325 executives across the top industries impacted by IoT around the globe. Expect to see more about this study, “The Impact of Connectedness on Competitiveness” in early January. Early findings indicate that despite IoT's popularity, many shifts are still needed to truly succeed in this realm, especially in industrial applications, meaning this dialog is not likely to subside after one report. In fact, the BPI Network is committing to ongoing dialogs around the issue, needs, and challenges organizations may face when developing and deploying their IoT strategies. If you are interested in getting involved, either as an expert or as a sponsor spearheading thought leadership development and demand in the IoT innovation space, there are still partnership and sponsorship opportunities available for heading into 2017.

No matter what your interest area or goals for 2017, we can collaborate and work with you to help you remain competitive. Do you have a distinct point of view when it comes to business performance, impacting change or accelerating innovation? If you do, and would like to have your content considered for inclusion in the upcoming edition of Brainwaves, the official newsletter of the BPI Network, send your submissions to us. From sponsorship to sharing content, if you'd like to work on thought leadership with the BPI Network, please reach out to Sally Lopez at slopez@bpinetwork.org.

Again, we want to thank you for your continued participation and strong contributions to the BPI Network over this past year. We are excited about all that is ahead in 2017 and will be counting on your voice and expertise to keep this exploration of innovation advancing.

As always, we look forward to bringing in the new year with you! 

Feature Article

Mapping Your IoT Monetization Strategy for 2017

By Chris Kocher

Sure, the Internet of Things could create hundreds of billions of dollars in new markets but the question is: who will be the winners and losers in this new marketplace? What are the driving forces behind IoT and what are the implications for companies developing strategies in IoT? How should you innovate to ensure you grow your business without being disrupted or “Amazoned?”

Let’s examine these issues in a bit more detail then review a framework for evaluating IoT strategies and the implications of how you should be developing your approach to monetizing IoT.

Power by the Hour and Other Driving Forces Propelling IoT

As with previous waves of technology, smaller, lower cost, and more powerful computing devices and sensors are helping propel the Internet of Things. Another critical factor in the equation is ‘connectivity.’ Standard protocols and electronics drawing less power while offering greater bandwidth are other factors tying this enormous variety of devices together into productive networks. The result has spawned entirely new types of devices, capabilities, and services at lower cost to consumers and industries. This in turn has driven companies to develop new applications that provide greater value and reduce costs in a virtuous cycle.

Many new innovations are being developed—not just in the technology–but in revolutionizing business models, changing revenue streams and disrupting established markets and industries.

Jet engine manufacturers can now sell “power by the hour” as a service instead of jet engine hardware as a capital expense. Medical device companies now sell MRI imaging priced per image instead of expensive machines. That enables them to add value, get into new markets, and extract revenues from smaller hospitals they could not previously reach.

These examples extend across industries, companies, and consumers with new recurring revenue models, subscription-based pricing and pay-per-use models. These areas provide fertile territory where innovative companies are finding better ways to satisfy their customers, seek greater differentiation, and enter adjacent and new markets.

Implications for Your IoT Strategy: Link Monetization to Customer Value

Every company will have different monetization options available to it depending on its industry, market segments, product, technology and other variables. What is critical is linking your monetization approach to how you can create new value for your customers. The image below highlights a number of ways you can streamline operations, reduce costs, add new value and increase revenues. Consider which of these you’ll use to hone your value proposition and identify new ways to leverage IoT to better meet your customers’ needs.

Examining Monetization Opportunities in Five Dimensions

Although there is not enough space in this article to examine multiple industries and company types, there are five key dimensions or characteristics that heavily impact monetization strategies and opportunities. Looking at companies across these five dimensions can help pinpoint new value creation, key success factors, product strategies, ecosystem partnering, competitive threats and monetization opportunities. You should consider where you lie in these dimensions and consider what the best IoT strategies are for your company:

  • Large vs. Small companies
  • Incumbents vs. New entrants/Disruptors
  • Industrial vs. Consumer
  • Product vs. Service
  • End-user products/apps vs. infrastructure/platforms

Here are just a few things you should consider in your IoT strategy in each area.

Large vs. Small companies

Large companies should actively explore new technologies, consider partnerships, build ecosystems, participate in standards, set up trials and encourage experimentation. Schneider Electric is one company that is leveraging their strengths and even set up a Silicon Valley Innovation center to help foster new technologies and partnerships. Most importantly, leverage existing customer relationships for insights into nascent needs and test beds for your new offerings.

Small companies with fewer resources need a tight focus. Identify ways to obtain feedback and gain traction quickly. Think beyond the technology and products to how you can bring your new offerings to market efficiently and monetize them through unique business models. Also consider partnering with larger companies to enhance distribution, awareness, and credibility.

Incumbents vs. New Entrants/Disruptors

If you enjoy an incumbent position with large market share and strong customer relationships, leverage that to provide your new offerings and/or partner with third parties to bring their offerings to market through your channels of distribution. Companies like Bosch, Siemens, Honeywell and similar industrials can leverage their power positions if they don’t become complacent and fall prey to the Innovator’s Dilemma. If you’re a new entrant, you may want to partner with existing companies to leverage their products and channels as well as get to market efficiently and increase your credibility. If you have a point product or service, you may also need to partner with a larger company in order to provide a “whole solution.” If you’re truly disrupting the market, you’ll need to consider new business models, new distribution approaches and alternate paths to partner in the ecosystem. 

Industrial vs. Consumer

If your company is selling to other businesses, look for ways to leverage IoT to offer new services, reduce your own costs, streamline your supply chain, and price based on usage or other revenue models.

If you’re focused on consumers consider how you can combine new technologies with your existing products to provide more value. Also examine how you can best establish an ongoing relationship with customers through subscription or usage-based pricing -as opposed to only a one time transaction or sale of a product or device.

Product vs. Service

Product companies with hardware devices should consider ways to turn one-time sales into ongoing revenue streams. These may include value based pricing with SAAS models, subscriptions, pay per use or other ways to connect pricing to ongoing value which can deepen relationships with customers.

Service companies may be able to add new value by integrating IoT devices, supporting them, managing data flows and monetizing these new value added services. Partnering with IoT device companies may also be fruitful. Companies like Comcast and ATT for example are in the “cat bird's seat” and can deliver and subsidize devices as part of their Smart Home strategies.

End-user Products/Apps vs. Infrastructure/Platforms

Selling an individual app, device or product within certain markets will require a great deal of differentiation – otherwise competition is going to drive down prices and margins. Think niche positioning and partnering with bigger players to leverage their market presence.

Companies with strong market positions that can drive platform standards like GE with their Predix platform or RTI with its middleware for the Industrial Internet of Things can create a great deal of new value. Key for these platform vendors will be lining up partners, building ecosystems of partners, and attracting developers to leverage their offerings.

Plotting Your Course to Monetization in the Internet of Things

With so much growth and opportunity in the IoT market, the key for monetization will be focus.  Depending on the type of company and offering you bring to market consider where you fit in the five dimensions above. Make sure to link monetization to key customer values that reduce costs, increase revenues or improve user experience. Consider how you can leverage partnerships, ecosystems, and value chains. And most importantly, think about innovating not just with technology, but also with unique business models and differentiated pricing.

This article was provided by one of our partners, Penton. Visit here to learn more. 

Interview

Prith Banerjee, Group CTO of Schneider Electric

Prith Banerjee is Group CTO of Schneider Electric, a global leader in energy management and automation, with operations in more than 100 countries. Currently, Schneider is looking at business model transformations, in which guarantees of production outcomes can be sold as services. In this interview, Banerjee says that despite the massive strides already made with IoT-enabled solutions, the truly game-changing innovations will come from next-generation analytics on big data.

Q: How is your team changing the game within your industry sector?

A: We deliver to our customers low and medium voltage products and automation systems that are all integrated in several end markets: buildings, data centers, asset intensive industries, and utilities. We have a host of innovations throughout those areas, and we invest 1.3 billion euros on R&D. It is about faster, cheaper, better, so why do we need that deep level of innovation?

Over the next 10 years, the energy consumption in the world will increase by about 40 percent, and electricity consumption will increase 80 percent thanks to things like urbanization, industrialization, and digitalization; you must be three times more efficient to keep carbon emissions near neutral. We found that in the domain of buildings, only 18 percent are energy efficient, so there is an opportunity for 82 percent of untapped energy efficiency in buildings. Data centers are 30 percent energy efficient. Asset intensive industries such as oil and gas, mining, and metals are about 50 percent efficient. The grand problem we are trying to solve is making sure your energy efficiency is running close to 100 percent.

I work with the five business CTOs to harness the innovations springing from that $1.3 billion investment. Connectivity is a major part of the solution. We are on the IoT journey, and our innovation chain is tied to IoT and digital transformation. Connectivity is about bringing value to our customers, and it can be cost reduction, efficiencies, performance, or all of the above. It also promotes safety, and safety has always been a core value in our customer proposition.

We look at innovation in the portfolio approach. A large percentage of investment—about 70 percent—is on Horizon 1: short term innovations on our core products. With Horizon 2, we have products like Masterpact MTZ, which has an IoT and power monitoring capability. This is Horizon 2 or adjacent and medium-term innovations: bringing new technologies to the same product. H-2 also includes bringing the same product to a new geography, meaning bringing these circuit breakers to China or India with modifications. H-2 is about 20 percent of our innovation investment. Horizon 3 is truly disruptive and long-term innovations, and represents a lot of the stuff we are driving today, and is about 10 percent of our R&D spend. Some of them are seemingly crazy, but with huge potential to completely disrupt our industry.

I am responsible for all innovation, not just the digital parts. We are on the journey of IoT and digital transformation, and almost all our products—from automation systems to circuit breakers—are integrated with digital technologies. We are absolutely the market leader.

Our new products are taking the industry by storm, and I am completely proud.

Q: What are some of the biggest impediments to innovation in your organization or industry sector?

A: We are moving toward IT/OT convergence, so all of a sudden engineers who had been very focused on the physics of arc breaking and switching in circuit breakers find themselves in the world of cyber security and cyber trends, of analytics, and machine learning. How do you bridge the gap from the old physics-based engineering to new world technologies or social media, machine learning and data analytics? That’s a challenge, and it needs a multi-disciplinary approach. Finding people who have knowledge in all areas is tough. Obviously, you do not need individuals fluent in all areas, but you do need individuals who can collaborate in large teams to solve customers’ problems effectively. The competency of people in our area is in the IT/OT convergence. We are an operational technology company, so we take care of the actual operations of the company—whether it is operating wells for Shell or what have you, whereas the IT companies like Oracle or SAP or Microsoft do the company back office.

Siloes also present a problem, because in many organizations, each line of business is so focused on their own vertical that they don’t think about the broader ecosystem. Companies that don’t invest enough in innovation have an even greater challenge. If I had only the industry average of 2 percent of sales for R&D, I would not be able to compete with the Schneinders of this world!

Also, with a risk-intolerant culture, you get only incremental innovation. The only way to get disruptive innovation is to create a culture of risk tolerance, where it is okay to try crazy things. We have a culture where it is okay to fail, and even encouraged to celebrate early failures—but only early failures, not just putting hundreds of millions of dollars into a stubborn mule project. We try to spend on lots of wacky things, knowing that most will fail, and when they do I give the team a pat on the back and say thanks for trying that, and what have we learned? Knowing something does not work also adds to our knowledge. Organizations who do not tolerate failure become very incremental.

For IoT, there are three main challenges: cyber security; inter-operability, or standardization; and legacy systems. There are systems you build on that could be 30 years old (brownfield systems) or one day old (greenfield systems). I think data security is a very big problem. The perimeter for attack is increasing daily with the 50 billion connected devices in the world of IOT. Cyber terrorists can create more havoc with cyber attacks than with bombs. We are giving a lot of attention to cyber security.

Q: How has innovation become engrained in your organization's culture, and how is it being optimized?

A: One of the things we pride ourselves on is the concept of open innovation, and that is something I have been practicing and preaching for years. Open innovation is a very big part of what we do, and we try build solutions for our customers with partners. Before we open an R&D project, we always ask if there is any start-up in the world that is doing something related to what we are trying to do? If there is, lets investigate and possibly collaborate with or bring that start-up into our fold. We can innovate much faster with this approach. It took three years and 10 million dollars to bring a solution to customers before; now we can spend, say, one extra million and bring it to market in six months. That’s the value of open innovation.

Q: What technologies, business models, and trends will drive the biggest changes in your industry over the next two years?

A: As Group CTO, I am driving IoT, and there are four pillars that are part of my organization. One is working with the five divisional CTOs on driving about 1.3 billion euros in R&D spend. The second is programs like open innovation. The third pillar is our corporate research center, where we look at Horizon-3—disruptive innovation. The fourth pillar is IoT. I was recruited at Schneider fundamentally to drive our IoT development, along three levels. One is connected products, which is fundamental, but not where the real value is.The next level is edge control, where in our application, our customers do not expect these IoT products to be connected and controlled from the cloud. We want to have local control. The third level is apps, analytics, and services, which we are building on top of the cloud.

The first value is in services. In the past, if a transformer failed, you as the customer would have to alert Schneider and ask if we can fix it. Today, we will tell you your transformer has failed, and ask if you would like me to fix it. Remote services are the low hanging fruit we are going after. But the next level is having the transformer give signals before it fails so we can inform the customer that the transformer will fail Thursday, and replace it Wednesday. Now there is no downtime. It is called asset performance management with predictive analytics, and we are doing it with a whole range of products. The cost of 15 minutes of downtime for an Amazon data center can be a hundred million, so the value is enormous. The third value is outcome-based services—if you can guarantee the outcome. If you’re making widgets in your factory, we can guarantee you will make 20,000 widgets per minute, no matter what. So rather than selling the 1,000-dollar transformer, we can sell the guarantee of 20,000 widgets per minute. You lease our products which we install for free, and you pay for the service of productivity. We are currently running pilots on this model. The IoT area will journey from products to connected products to services to guaranteed outcomes. We are increasingly moving toward a world where people will not own products, and instead will get services on demand where and when they need it.

IoT also offers enormous benefits for continuous customer engagements. In the past, when we sold you a circuit breaker or panel that lasts seven years, the next time we would talk would be in seven years. With IoT, you have a 24/7 connection with the customer. We know exactly what is going on. Continuous engagement with customers is an amazing new opportunity for marketers, and the best thing you can do for your CMO. IoT is just the plumbing. The technology that will be truly disruptive will be the analytics on that big data you are collecting. How to use data is the most important question we discuss every day. Initially, you are collecting small data, but with data coming in 24/7 from 50 billion connected devices. How do you do artificial intelligence and machine learning on all that data? This is going to be the most exciting thing. Connectivity is the easier part; analytics on the big data is going to be the game changer.

We have partnerships with the top 50 companies in Silicon Valley and relationships with top venture capital firms, and we ask all of them: “what are the top start-ups you are working with in the IoT space? In the sensor space? In the cyber space or in the drive space?” We ask them for their technology strategy—what is it they are trying to do? From this, we typically identify three or four start-ups, and we try to identify the technology that best matches with our system. Conferences are also helpful. A week ago, I gave a keynote in Barcelona at the IoT world congress. We tell the world, “this is where we are headed,” and then 15 start-up founders came to me and talked about possible synergies.

Q: Can you share a specific innovation strategy you’ve recently encountered which you find compelling?

A: I am very excited with some of the latest innovations in areas such as augmented reality/virtual reality, cognitive computing and machine learning, 3D printing, robotics and drone technology.

Contributed Article

Prediction Roundup: What does 2017 Have in Store for Innovation and Transformation?

By Sarah Karlen, BPI Network

With 2016 coming to a close, and enterprise transformation at the top of mind for executives across functions and industries, it is time to turn insights gained in 2016 into actions in 2017. As business leaders outline a new roadmap for the coming year. It is imperative to consider which trends are truly innovative, and which are momentary flashes of light, only to fade away in the coming year.

Experts say 2017 will be truly disruptive; it is a vital year for leaders to pull away from the laggards, and for companies to fully invest in their innovation strategies. While rumors are floating around about evolving digital platforms, big data, voice first browsing, and the decline of mobile applications, the Business Performance Network (BPI) Network has some thoughts on trends we have been tracking that will likely continue to dominate headlines well into 2017.

The Internet of Things: Real Innovation or Real Headache?

The Internet of Things has the potential to take off in numerous directions—one more consumer focused, and the other more industry centered. You can expect to see numerous IoT benefits for the consumer in the coming year: Intelligent apps introduced in the work place, Virtual Reality and Augmented Reality moving beyond gaming. Cloud services continue to gain momentum, and many experts are lauding new applications for wearables, including applications across employee health gaining traction.

Per Gartner’s predictions in a recent Forbes roundup, by 2020, 40 percent of employees will be able to cut their healthcare costs by wearing a fitness tracker. This is something worth keeping an eye on and maneuvering around next year when thinking about wearables and the impact they could have. Beyond health applications, B2B connections on IoT are also expected to explode in the coming years, with Verizon predicting the number of connections will increase to 5.4 billion by 2020, with large enterprises leading the connection charge.

While IoT applications for consumer products are clearly changing the game and playing a heavy hand in shifting customer expectations for speed of service and connections, the industrial application of IoT is emerging as the real game changer. For companies looking to remain competitive in the coming years, Industrial IoT (IIoT) is expected to top $60 trillion during the next 15 years.But how will all of these connections impact the performance of the business infrastructure?

Many experts, while eager with anticipation of the advances, also admit that IoT opens the flood gates for a whole new realm of threats, the biggest concern involving security and the very real threat of attacks via IoT. Companies, and consumers alike, will need to properly equip themselves with the right security platforms and protocols early on in their design, development, and deployment stages. Jon Wrennall, CTO of Advanced, agrees, “The evolution of intelligent digital mesh, digital technology platforms, and application architectures, combined with the addition of the IoT frontier, means the threat landscape is expanding exponentially. Consequently, multi-layered security and use of user and entity behavior analytics will become a requirement for virtually every enterprise.”

To advance this IIoT discussion in earnest, the BPI Network will be releasing a report in the New Year that highlights where business are in adoption and planning for IIoT. The study identifies best practices and successes in using IIoT applications and will include peer-level insights from across organizations already applying the power of IIoT to their business systems, processes, and operations.

In order to prepare for IIoT disruption, profound business realignment is now underway, which necessitates the redesign of products, processes, business models, and demands new thinking and inventive approaches from business leadership teams and their entire global organizations.

Shifts in the C-Suite: Job Shifts to Maximize Business Lift

Amongst those functional titles most greatly impacted by shifting business expectations is the Chief Marketing Officer. The new, digital, connected ecosystem means enterprises have access to the customer like never before. And with the customer at the forefront of business decisions, CMOs face amplified expectations to have a far more strategic role directly tied to driving growth and profitability if they want to still be here in 2017.

While the CMOs of today believe they are actively asserting their role as business driver and customer experience champion, according to research from the CMO Council and Deloitte, many are still stuck in their traditional role as brand ambassador—reviewing budget plans and organizing content for campaigns. In an article from Media Post, Chuck Martin, editor of IoT Daily, predicts that CEOs will get rid of at least 30 percent of CMOs for not mustering the blended skill set needed to drive digital business transformation, design exceptional personalize experiences, and propel growth in 2017.

If CMOs want to stay in their role and truly be the growth drivers, they need to prepare themselves for the technological revolution. One CMO interviews for the report, Martyn Etherington, Chief Marketing Officer & SVP Operations at Cisco Jasper, said it best: “It is incumbent upon marketers to step up, assume accountability, and drive growth. If you deliver results, you will excel. If you don’t, your replacement will!”

You can download the CMO Council and Deloitte report here.

As the digital revolution continues to take hold, successful companies will put increased emphasis in the development of their IT department in 2017, expecting the CIO, similar to the CMO, to adopt a highly visible and intensely strategic position in the C-Suite. Implementing strategies to generate positive customer relationships is nothing new. Yet despite the increasingly technical nature of customer experience, most often focused in a digital realm, in a recent Deloitte survey, only 45 percent of CIOs say their IT departments are actually involved in delivering customer experience through IT capabilities.

In the coming year, IT departments will need to focus on collaborating with marketing, service, and support teams to really understand the end customer in order to deliver relevant platforms to teams directly touching the customer, and create relevant experiences and connections with customer that align with company-wide customer experience strategies. This will also include Marketing and IT teams being far more bound through a unified data strategy that defines key processes and platforms to best aggregate, analyze, and disseminate critical customer intelligence to relevant internal teams.

Business executives around the world expect IT organizations to innovate using modern transformative technologies, while simultaneously catering to an increasingly complex list of “traditional” operational needs. When the BPI Network looked at the state of transformation in the report, “Bringing Dexterity to IT Complexity: What’s Helping or Hindering IT Tech Professionals,” two-thirds of IT professionals admit that their company’s IT transformation hasn’t even begun or is just getting started. Even more troubling is that these IT pros also admit that their roadmaps to transformation are barely developed with only 15 percent feeling they have a well-defined plan and roadmap in place.

The roadblocks holding transformation back may be culturally rooted, having more to do with a lack of communication and under-resourced teams than with the complexity of emerging technologies and the almost constant battle with legacy infrastructures. Some 82 percent of survey respondents felt that it was actually the ever-shifting list of priorities being thrown at IT that was most often derailing innovation, while 62 percent pointed to IT projects being under-staffed or under-funded. But it is the 52 percent of IT executives that reveal that there is no sufficient alignment and collaboration between IT and the business, leaving IT to be brought in far too late in transformation or innovation conversations to be able to realize true transformation that should be the primary concern.

For best practice leaders, these disconnects and political wrangling are being set aside with the intentional strategy to optimize innovation, setting aside squabbles for ownership and instead looking to both internal and external resources that can collaborate effectively. Prith Banerjee, Executive Vice President & CTO at Schneider Electric, told the BPI Network that the company ever starts an R&D project, they investigate… are more specifically, they investigate externally. “We always ask if there is any start-up in the world that is doing something related to what we are trying to do. If there is, let’s investigate and possibly collaborate with or bring that start-up into our fold. We can innovate much faster with this approach.”

This trend of open innovation will be beneficial to both large corporations and start-ups, and you can expect to see a lot of collaboration between the two in the coming year, especially as C-Suite leaders apply laser focus on accelerating transformation in order to maximize business lift and growth.

With so much on the brink of change, the BPI Network will be keeping our ears to the ground to keep you in the know on what you need to succeed in 2017. 

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