NRI Papers
No.119 July 1 , 2007
  IT-Driven Business Innovation  
Koki YODOKAWA
   Business innovation refers to a reform to completely change products/services, organizations and/or business processes, whereby providing new value for customers and enhancing a company's business value. IT (information technology) can provide powerful tools for achieving such business innovation. However, companies have been focusing their IT utilization themes on improving existing business operations for which the effect attained can be readily perceived. Now is the time that they should be redefining the objectives of IT utilization. We propose that these new objectives should be to foster relationship assets, knowledge assets and process assets, and to create platforms that enable the integration of these three types of intellectual assets in pursuit of business innovation.
   These three types of intellectual assets are the source of business innovation. Companies must sow the seeds of innovation by continually evolving these intellectual assets as well as IT assets in which such intellectual assets are incorporated.
   In the surveys conducted by Nomura Research Institute (NRI), we found that while many companies are implementing reforms to create intellectual assets, they have not yet been successful in producing the desired effects.
   The measures leading reforms to success include those related to strategic alignment, governance, methods, use of IT, corporate culture and human resources. While many responding companies have been implementing measures to ensure strategic alignment and those related to the use of IT, only a limited number of companies have actually been applying the development of methods and the training of human resources.
   Great expectations are given to the CIO (chief information officer) as the promoter of business innovation. Of course, in the true sense of the word, the innovation officer is the CEO (chief executive officer) and the person responsible for each business unit plays the role of effective utilization of intellectual assets. IT-driven business innovation should be promoted by the trinity configuration involving these three parties, i.e., CEO, CIO and the person responsible for each business unit.
Contents
I Use of IT to Achieve Business Innovation
II Relationship, Knowledge and Process Assets Form the Source of Business Innovation
III Required Asset Management
IV Critical Success Factors for Business Innovation
V Trinity of CEO, Business Units and IT Divisions to Promote Reforms

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