Data from the Q2 2012 Forrsights Budgets And Priorities Tracker Survey shows that for nearly 70% of Australian and New Zealand organisations, the top IT management priority is to increase IT capacity or resources to drive business innovations. This focus on innovation has been reflected in numerous discussions I’ve been having with CIOs. At a panel session on innovation towards the beginning of 2012, the audience were pretty evenly split between those who believed IT has a key role to play in business innovation and those who thought innovation was not IT’s job. Now, however, innovation seems top of mind with most CIOs I speak to.

So what can your IT department do to help drive business innovation? Well – really there are lots of ways – but most importantly you can help by implementing processes that help drive “sustainable innovation”. Sustainable innovation is not small changes – and not the big changes – it is everything in the middle. I call it the “gut feel” innovation – i.e. “I have this idea and I think it could help improve the business. The thing is that I don’t have the stats to prove it can help – hence I can’t build a business case – hence we can’t put this idea through the traditional business investment process.” In a scenario like this, what you need is a process to quickly test and measure the idea to give you the data to put into the traditional business process to either move it forward or discard it as a bad idea. If fewer than 45% of your ideas move from ideation to reality you are probably testing too many “bad ideas” and you need to tighten your process to get rid of more bad ideas earlier – and on the flip side, if more than 70% of the ideas are being commercialised then you probably aren’t testing enough ideas.
Your innovation process must be fast, light and inexpensive. Where IT can add value in the process is to put the implementation and control structures around this process – for without these, most organisations find that the innovation funnel does not diver the expected benefits to the business. 
Forrester has recently published our Innovation playbook. The playbook contains the tools, advice, and measurement mechanisms to assist you along the whole path in developing an innovation capability. It helps you to develop an innovation funnel, along with the implementation and control structures. Innovation is not just about the ideation funnel, but about the structures that you put in place to support that funnel.
However, the long-term goal for your innovation capability should be a cultural change – where innovative behaviour becomes part of the DNA of the organisation. The structures and processes you put in place will help to get the innovation funnel working – but cultural change is what will drive positive change for your business or government department.