believe information systems will hamper their work
and present barriers to their creativity and produc-
tivity. IT managers are no less frustrated. From their
viewpoint, as a senior manager from E. I. du Pont de
Nemours and Co. told us, one of the biggest issues
is “IT getting a place at the [innovation-activity]
table versus being a utility.”
Yet the potential of information systems to im-
prove the innovation process is too great to dismiss
them out of hand. For example, visualization tools
can help innovators make sense of data and un-
cover hidden relationships. Portfolio-management
tools can help keep the innovation pipeline full,
limit a company’s financial exposure and fast-
track the development of promising ideas.
IT-enabled collaboration capabilities can bring
together innovators with different skills to solve
multidisciplinary problems. And IT-based knowl-
edge management can help innovators find
information they need from vast pools of organi-
zational knowledge resources.
We undertook research to learn how some leading innovators have used information systems to
make their innovation activities more effective and
efficient. We examined the ways in which they improved the innovation process through better use
of IT and through effective partnership with the
IT department, thus accelerating the conversion of
research and development into business growth
and increasing the yield of the innovation portfolio. (See “About the Research.”)
The research results that follow essentially provide
a checklist by which enlightened innovation managers may review how IT can bolster their efforts.
Components of Innovation Success
Our research shows that companies require three
things in order to use IT for facilitating innovation
activities. First, they need specific IT-enabled organizational capabilities, which are formed by combining
their IT assets (data, infrastructure and expertise, for
example) with non-IT assets (such as creativity of
innovators, technological sophistication of top management and laboratory resources) to enable the
across-the-board processes essential to developing
and applying innovations. 1 Second, companies need
a strong set of IT-based tools to effectively sustain the
central activities required for innovation and to sup-
port the analytical work that scientists, engineers and
designers need to transform ideas into products,
processes and services. Third, companies need a system of control that allows innovation workers to
access and use the I T resources effectively.
Capabilities, tools and control are the three legs
of the innovation stool. Excellence in any two of the
areas is insufficient. If the third is lacking, excellence in innovation will be difficult if not impossible
to achieve.
I. Capabilities We identify six organizational capabilities typical of companies that effectively use
information systems to boost their innovation performance: ( 1) portfolio and project management;
( 2) collaboration; ( 3) knowledge and information
management; ( 4) business-IT linkage; ( 5) ambidexterity; and ( 6) competitive intelligence.
1. Portfolio and Project Management. This capability is required to organize and administer the
company’s portfolio of innovation activities. Lacking it, the company may not know when to
terminate projects that are in trouble or may un-derfund those needing to clear a threshold. The
company also will not be able to aim toward opti-mality in the size of its portfolio. On the one hand,
having too few innovations under development exposes a company to the risk of being unable to
improve its products and services sufficiently to
fuel growth or even sustain market share. On the
other hand, supporting too many innovation projects runs the risk that the company will be unable
to marshal the resources necessary for proper and
timely development of its innovations. Therefore,
this capability draws on portfolio-management
tools to help managers maintain a viable pipeline
of innovation projects at various stages and funding levels. And it draws on project-management
software to allocate resources within projects, set
deadlines and monitor progress.
Many of the companies we surveyed or researched
had developed their own portfolio/project-manage-ment systems. At Dow AgroSciences LLC, a leader in
biotechnology products, this capability is manifested
in a process, called “Create Product Success,” that has
been in place since 1998. The process takes an innovation project through five key documents: business
case, technological and commercial assumptions,
