The Road to Innovation is Paved With Information Technology

THE ROAD TO
INNOVATION IS PAVED WITH
INFORMATION TECHNOLOGY
HOW BUSINESS LEADERS ARE CHANGING
THE RULES OF CORPORATE SUCCESS
IN ASSOCIATION WITH:

CONTENTS
Introduction and Methodology .........................................................................................................2
Executive Summary and Key Findings ..........................................................................................4
Agility and Nimbleness Are the Most Desirable Values a Firm Can Hold ......................8
The Roots of Competitive Advantage ..........................................................................................12
CEOs Have a Rosier View of IT Strategy Than Tech Chiefs .................................................17
Top Priorities: Mobility and Full Access at Any Time .............................................................23
Chiefs Have Divergent Views on the Role of CIO .................................................................. 26
Digging Deeper: Case Studies........................................................................................................ 29
1 We’re All in This Together: Chief Technology Offi cer ..............................................30
2 View From the Top: CEO .......................................................................................................31
3 Driving Disruption: Vice President of Innovation .......................................................32
4 Best of Both Worlds: Chief Technology and Innovation Offi cer .........................33
5 Follow the Money: Chief Financial Offi cer ....................................................................34
6 Across the Enterprise: Chief Innovation Offi cer ..........................................................35
Conclusion............................................................................................................................................... 36

INTRODUCTION AND
METHODOLOGY
“Innovation” has become the term du jour these days, but it’s just as
likely to evoke uncertainty as to evoke a sense of business progress.
Many business leaders are still struggling to defi ne what innovation
really means, what it can potentially do for their organizations, and
who is most capable of delivering and leading it. There is one thing that
nobody disagrees on, however: the road to successful innovation is
paved with information technology. From data analytics—which opens
up insights on customers and markets—to collaborative technologies—
which open up participation to employees and partners across the
enterprise—to social platforms—which open up communication
with customers—technology is providing insights that would
never have seen the light of day until recently.
2 | THE ROAD TO INNOVATION IS PAVED WITH INFORMATION TECHNOLOGY

COPYRIGHT © 2014 FORBES INSIGHTS | 3
To explore how business leaders see inno-vation
advancing their organizations, and
the role technology plays in these eff orts,
Forbes Insights, in association with NetApp,
launched a survey of top executives from a
range of industries. The goal of this research is to illu-minate
leaders’ perceptions on innovation, who should
lead and the role of technology. Forbes Insights also con-ducted
in-depth interviews with half a dozen executives
to provide context for the fi ndings.
The global survey of more than 300 top-level
executive decision makers fi nds widespread agreement
that IT is playing a key role in reshaping and redefi n-ing
innovation. It’s not just IT executives who hold
this point of view, it’s business leaders from across the
spectrum. Along with CIOs and CTOs, many tradi-tionally
“non-technical” business leaders—such as
CEOs and CFOs—are also getting deeply involved
in technology decisions. Ironically, IT executives may
even be a bit more cautious than their C-level coun-terparts
in seeing IT as an innovation driver—they are
more supportive of an enterprise-wide approach to
business development.
The survey was fi elded in September-October
2013, and received a total of 312 responses from senior
executives. Fifty-three percent of respondents were
C-level, while 47% were senior executives at the direc-tor
level or above. For C-level respondents, 18% were
CEOs, 23% were CFOs, 22% were CIOs and 23% were
CTOs (14% were another type of C-level executive).
Respondents hailed from fi nance (18%), general man-agement
(17%), IT (59%) and operations (6%) roles,
spread across multiple industries including manufactur-ing
(22%), healthcare, fi nancial services, media, energy
and telecommunications (10% each). By region, 11% of
respondents came from the U.S. and from Germany,
10% each from Australia, Canada, China, Japan, the
UK and Latin America, while 7% came from South
Africa and 5% from India. Fully 70% of respondents
worked at companies with more than 1,000 employees.
A majority of the executives in the survey, 88%,
indicate they have some infl uence over IT decisions
within their organizations. About one-fourth, 26%, say
they have the fi nal say. Seventy-six percent of CEOs
believe the technology decision buck stops with them,
versus 39% of CFOs, 41% of CIOs and 24% of CTOs.
K E Y TA K E AWAY
Many business leaders are still struggling to defi ne what innovation really means,
what it can potentially do for their organizations, and who is most
capable of delivering and leading it.

EXECUTIVE SUMMARY
AND KEY FINDINGS
The world has changed dramatically over the past fi ve years, and the
rules of business have changed. Businesses are operating in an unfor-giving,
hyper-competitive global economy. New startups with disruptive
business ideas are being launched every day, across all six inhabited
continents. Thanks to the pervasiveness of information technology, the
barriers to entry into global markets are low. It’s no longer enough to be
an established company with a well-known brand. Every organization,
regardless of size or industry, needs to be innovating, every day and in
every way.

The survey fi nds information technology is
playing a central role in delivering inno-vation
to organizations. Decision makers
from across the spectrum—from the CEO
on down—are embracing IT and its capac-ity
for innovation.
While technology has changed the rules, it also is
providing unprecedented opportunities to advance into
existing markets, or even build entirely new markets.
With technology, companies can work interactively
with employees, partners and customers to design and
release new products or services. The possibilities of
innovation are limited only to the extent of business
leaders’ imaginations.
Business leaders across the board—both within and
outside of traditional information technology func-tions—
agree that IT is a potent tool that needs to be
developed and leveraged to move their organizations
forward into this new reality.
The key to deploying IT as an innovation driver is
the ability to transform to a fl exible and nimble infra-structure.
In the process, it is opening up innovation
across the enterprise. “All good ideas don’t come from
a research organization or the product management
departments,” says Abhi Ingle, vice president of eco-system
and innovation for AT&T. “They come from
the understanding of people in the front lines of your
business who are interacting with customers, suppliers
and partners. Innovation is done everywhere, not just
in the sanctifi ed halls of a research institution.”
The convergence of technology and new ways of
thinking is creating an electrifying atmosphere for cre-ativity
and disruption. “This is the most exciting time
I’ve seen in technology in my 25-plus year career,” says
Roger Pilc, executive vice president and chief inno-vation
offi cer for Pitney Bowes Inc. “I’ve never seen
a more dramatic impact on business outcomes from
technology as I see today. The combination of mobil-ity,
social media and Big Data is helping organizations
transform how they interact with and market to their
customers, and how their customers consume their
products. The potential for opportunity is the strongest
I’ve seen in decades.”
K E Y TA K E AWAY
The convergence of technology and new ways of thinking is creating
an electrifying atmosphere for creativity and disruption.

KEY FINDINGS
The following are key fi ndings that have emerged from the latest Forbes
Insights survey of top-level executives in large organizations:
Today, executives credit their organizations with delivering agility and nimbleness.
In the years to come, they aspire to capitalize more on analytics for decision making.
Eight out of 10 consider agility and nimbleness as their top-ranked quality at this time, and also consider this to be
their organizations’ most important quality over the next three years. However, they realize that data analytics—
the primary advantage delivered through information technology—is the most essential capability needed going
forward. Currently, better decision making through data is ranked eighth among key values their organizations are
delivering. Over the next three years, they will prioritize this to be the second most sought-after quality.
Being fi rst-to-market and strong customer relationships are seen as the key to competitive advantage.
Technology and digital innovation play supporting roles.
Strategic advantage is all about being fi rst-to-market, satisfying customers and establishing a strong brand.
Executives say these are their top priorities for innovation. Big Data analytics, leveraging digital technologies,
technological innovation and mobile computing are important, but rank further down the list.
Chief fi nancial offi cers are spurring technology-driven innovation and making the biggest
push for investment in new solutions and approaches.
Technology is now providing unprecedented visibility into business metrics, as well as enhancing fi nancial report-ing
and insights. This has fueled the CFOs’ vision. CEOs, on the other hand, are less likely to see technology as a
leading strategy, as they continue to focus on broad enterprise approaches. For CEOs, their organizations’ ability
to adapt and change is a top priority, along with improving customer relationships. Interestingly, CIOs are more
focused on delivering business values—such as superior customer service and competitive diff erentiation—than
their business leader counterparts.
Executives agree that technology is a key component for their organizations’ plans for
growth in the long term.
The majority of executives see their enterprises in the middle of the IT adoption curve. While executives agree
that technology has not played a starring role in the past, a majority, 63%, see information technology as a key
part of their organizations’ long-term plans. However, only 21% see their organizations as being on the “leading
edge” of technology.

Executives are divided as to what is the best technology investment for business growth.
Customer relationship management ranks as the top type of technology investment that will help deliver busi-ness
growth, cited by more than one-third of executives. Close to one-third also cite data security and protection.
However, it’s notable that no option gets a majority of the votes.
Making business processes available anywhere, at any time, is the top tech action.
The biggest priority companies are acting on is providing anywhere/anytime access to business processes
(55% say they are taking “signifi cant steps”), followed by increasing customer interaction and enabling more
fl exible work environments, while few are as actively concerned with collaboration and the BYOD (bring your
own device) trend.
Executives are divided on the role of chief information offi cers in the innovation process.
However, everyone agrees that IT leaders need to play a key role in overall corporate innovation.
Aligning IT with the business is seen as the main focus area for CIOs at this time, as indicated by 48% of execu-tives.
Driving business innovation is the second-ranked area of focus, cited by 43%. In another 37% of organi-zations,
the CIO also gets directly involved with business strategy. However, CIOs need to continue focusing
on increasing their visibility in the corner offi ce suite. CEOs appear to have their CIOs more pigeonholed into
the typical “CIO role,” of maintaining the IT department—just four in 10 CEOs see the role of the CIO as driving
business innovation.

AGILITY AND NIMBLENESS
ARE THE MOST DESIRABLE
VALUES A FIRM CAN HOLD
Today, executives credit their organizations with delivering agility and
nimbleness. In the years to come, they aspire to capitalize more on
analytics for better decision making.

TOP VALUES TODAY IN 3 YEARS
1 1
Executives were asked to rank the most
outstanding qualities that currently char-acterize
their organizations, and which
they would like to see emphasized within
the next three years. Overall, more than
80% of executives consider agility and nimbleness as
the top-ranked quality their organizations deliver. Such
swift understanding of market needs and the ability
to adapt to them quickly will continue to be the most
important quality on their radar over the next three
years. Strong leadership follows as the second-ranked
priority, followed by operational eff ectiveness and com-petent
talent (Fig. A1). (It should be noted that majorities
of executives in all categories sought these values.)
Figure A1. Top Values in Organizations Today, and in Three Years
(In all cases, a majority of executives cited these as sought-after values.)
Agility/nimbleness
Strong leadership 2 5
Operational effectiveness/efficiency 3 7
Competent, expert employees 4 9
Steady stream of IT-enabled business innovations 5 4
Customizable products, solutions or services 6 15
Notably innovative products, solutions or services 7 16
Better decision making through business/customer intelligence 8 2
Efficient, streamlined approach to doing business 9 13
Process optimization 10 11
Competitive differentiation 11 10
Presence in emerging markets 12 18
Collaborative processes 13 6
Exclusivity of product or service 14 19
Best-in-class product or service 15 3
Cost-effective products, solutions or services 16 12
Scalable products, solutions or services 17 8
Global presence 18 14
Superior customer service 19 17

Notably, executives are moving toward a signifi cant
shift in priorities. Two among the top three qualities in
three years are currently ranked relatively low. Better
decision making through data is currently ranked
eighth. Going forward, executives would like it to be
in their top two.
Likewise, currently, executives are not as concerned
with their companies’ ability to support delivery of
“best-in-class” products or services—it ranks 15th on
the list, but they would like it to be in their top three
in the future.
Across the leading titles covered in the survey, dif-ferent
priorities and perceptions emerge. While just
about everyone in the C-suite agrees that agility and
nimbleness is the most important quality their orga-nizations
need over the coming years, chief fi nancial
offi cers are the greatest proponents of Big Data analyt-ics
as the driving force for their organizations (Fig. A2).
Thus, Big Data—better decision making through
business/customer intelligence—and off ering solutions
for developing the best products/services should be top
priorities, as they’re clearly very much on the minds
of senior executives and the C-suite. Strong leadership
and innovation will remain in the top fi ve as important
values to execute these new initiatives.
Every business has its own concept of what inno-vation
should deliver. But progress often follows a
well-defi ned “maturity curve,” as pointed out by Ed
Goldman, chief technology offi cer and general man-ager
of strategy architecture and innovation for Intel’s
IT Group. “The fi rst discussions about innovation with
business units will always be around their incremen-tal
issues. As you mature the relationship, and start to
deliver against those things, the conversation turns to
business strategies.”

Figure A2. Wish List—What Business Leaders Want (in 3 Years)
Agility/ Agility/ Agility/ Best-in-class
nimbleness nimbleness nimbleness product or service
Better decision making Steady stream of
Strong through business/ IT-enabled Agility/
leadership customer intelligence innovations nimbleness
1
CEOs CFOs CIOs CTOs
79% 79% 84% 82%
2 76% 74% 78% 71%
Competent Collaborative Superior customer Competent
employees processes service employees
3 72% 71% 76% 68%
K E Y CON C LU S IO N
In an era of heightened global competition, organizations need to be able to
quickly identify and respond to trends and needs within their markets, respond to
challenges and act on new opportunities. IT and analytics provide the tools and the
means to do so, but their eff ective application requires leadership. Top executives
acknowledge that technology solutions will soon be enabling innovation on a
greater scale than seen before, and will form the foundation of eff orts to achieve
greater agility and nimbleness.

THE ROOTS OF
COMPETITIVE ADVANTAGE
Being fi rst-to-market and strong customer relationships are seen as the
keys to competitive advantage. Technology and digital innovation play
supporting roles.

Being fi rst-to-market is by far seen as the
most important factor in an organization’s
competitive advantage, as ranked by 60%
of executives. Customer relationships and
strength of brand and reputation round out
the top three elements of competitive advantage (Fig. B1).
Close to half of the executives surveyed state that
leveraging Big Data is an “extremely important” strat-egy,
making this the fi fth-ranked item on the list. Big
Data is increasingly being adopted as a tool for ana-lyzing
and understanding customer preferences and
behavior. Despite all the current buzz around mobile
technology, executives seem relatively less concerned
with converting mobile to a competitive advantage.
With most executives acknowledging the key role
technology is playing in innovation initiatives, why
is it still being downplayed as a competitive advan-tage?
Business leaders understand that technology
development is not a competitive diff erentiator in
itself—rather, it is the collection of tools and method-ologies
that support innovative activities that enable
faster time to market, more developed customer rela-tionships
and stronger brands. As shown throughout
this survey, executives recognize that more has to be
done to boost technology assets, and that technology
plays a supporting role in advancing today’s and tomor-row’s
enterprises.
Figure B1. Important Strategies for Competitive
Advantage (Percentage indicating strategy is
“extremely important”)
Being first-to-market
Customer relationships
Strength of brand and reputation
Efficient supply chain management
Leveraging Big Data
(customer and market intelligence)
Ability to adapt and change
Leveraging digital technologies
More efficient information management
Technological innovation
Marketing and advertising
State-of-the-art IT resources
Successful collaborative partnerships
Leveraging mobile technologies
59%
51%
49%
48%
45%
42%
42%
41%
41%
38%
38%
37%
34%

What does the C-suite focus on? CFOs are driving
technology-based innovation and making the biggest
push for investment in new technologies and data ana-lytics,
pointing to the increasing role of technology in
fi nancial reporting. CIOs are more focused on deliver-ing
business values—such as superior customer service
and competitive diff erentiation—than their business
leader counterparts (Fig. B2).
“Compliance really encompasses so much of what
we do in each of our businesses, but we can only be
eff ective if we have greater and more-eff ective IT
tools,” says Paul Reilly, executive vice president of
fi nance and operations and chief fi nancial offi cer of
Arrow Electronics, Inc. “In this slow-growth eco-nomic
backdrop that we’re all operating in, so much
is centered around centralization and standardization
of functions. But most important is the automation of
processes. It’s great that you centralize and standard-ize,
but if you don’t automate, you’re not going to get
the right level of effi ciency. Automation comes from IT
tools and capabilities.”
Figure B2. Wish List—What Business Leaders Want (in 3 Years)
CEOs CFOs CIOs CTOs
Ability to adapt Being Customer Being
and change first-to-market relationships first-to-market
55% 53% 54% 79%
Customer Technological Strength of brand Leveraging digital
relationships innovation and reputation technologies
1
2 55% 47% 54% 63%
Leveraging Big Data Leveraging Big Data
Strength of brand Leveraging digital (customer and (customer and
and reputation technologies market intelligence) market intelligence)
3 52% 47% 49% 61%

Figure B3. What Influences Business
Investment Decisions
Cost projections of implementation/use
Savings projections from use of product/service
Level of efficiency expected from vendor
Level of support from vendor
Ease of integration with other
IT systems/processes
Cost of vendor vs. that of competitor
Flexibility for length of agreement
Vendor’s ability to supply
up-to-the-minute upgrades
55%
49%
31%
31%
30%
18%
17%
15%
When looking across the six key industry groups
covered in the survey, distinctions emerge in terms of
innovation strategies. For example, while fi nancial ser-vices
and technology industry executives place their
highest priority on being fi rst-to-market with product
innovations, those in charge of media operations are
most inclined to focus on the strength of their brand
and their company’s reputation as a competitive dif-ferentiator.
For telecommunication executives, the top
priority is being able to leverage mobile technologies—
in line with their core product off erings.
Business investment decisions are driven by cost
and savings projections on development/use of tech-nology.
Innovation is strongly associated with agility
and productivity, but business leaders still look at the
bottom line fi rst (Fig. B3).
Executives recognize that costs are only part of the
equation. “The costs of innovation are easily measured,
but the benefi ts are not so easy to quantify,” says Reilly.
“You do need to build a business case to support inno-vation,
but sometimes you have to take risks when you
can’t quantify the benefi ts. Sometimes that’s just part of
innovation if you want to go forward.”
Interestingly, CEOs are not as concerned about
costs as they are about how new investments will fi t in
with existing enterprise systems and processes.
Their C-level associates, however, including CIOs
and CTOs, will put costs and potential savings fi rst.
CFOs are naturally most preoccupied with savings pro-jections
from use of the product/service, and CTOs are
most concerned with cost and savings projections for
implementation and usage. Interestingly, CIOs and IT
industry executives are by far the least concerned with
fl exibility for length of agreement (Fig. B4).

Figure B4. What Influences Business Investment Decisions—by Title
Ease of integration Savings projections
with other IT from use of Cost projections of Cost projections of
systems/processes product/service implementation/use implementation/use
Savings projections Savings projections
Cost projections of Cost projections of from use of from use of
implementation/use implementation/use product/service product/service
1
CEOs CFOs CIOs CTOs
45% 58% 49% 76%
2 41% 45% 43% 63%
Ease of integration Ease of integration Level of efficiency
Level of support with other IT with other IT expected
from vendor systems/processes systems/processes from vendor
3 34% 37% 38% 34%
While this survey report focuses on the role of technology in innovation, it’s important
to keep the ultimate strategic goals in focus—leading the market, actively engaging
with customers and building a brand. Business leaders understand that technology
development is not a competitive diff erentiator in itself—spending money for the
latest and greatest solutions will not automatically generate innovation. Innovation,
assisted by technology, springs from leadership and engagement.

CEOS HAVE A ROSIER
VIEW OF IT STRATEGY
THAN TECH CHIEFS
Executives agree that technology is a key component for their organi-zations’
plans for growth in the long term. The majority of executives
see themselves in the middle of the IT adoption curve. While there are
a number of initiatives under way, such as customer relationship man-agement,
executives are divided as to what is the best technology
investment for business growth.

Most enterprises consider themselves
to be “moderate” to “conserva-tive”
adopters of IT. Top executives
clearly recognize the power of IT to
transform and advance their busi-nesses,
but there are a myriad of reasons that many
do not see their organizations as leading the technol-ogy
wave. There are often skills constraints, as well as
entrenched legacy systems that need to be modernized
and integrated into new platforms. The majority still
see technology—at least as it is deployed within their
enterprises at this time—to be a force within the walls
of their enterprises, delivering effi ciencies that will
boost the productivity of their workforce and the eff ec-tiveness
of their processes (Fig. C1).
The employment of information technology as an
external force for the business—opening up or even
creating new markets, acting as a disruptive force—is
still in the early stages. Yet executives expect to rely on
information technology to enable their organizations
to compete on analytics, which will drive new insights
into customer trends and acquisition. About one in fi ve
enterprises consider their organizations to be leading-edge
adopters of information technology.
Even the most tech-savvy enterprises are learning
to structure innovation as they would a startup, with
lots of collaboration along the way. Intel’s Goldman,
for example, says his company concentrates on mea-suring
“yields” from innovation proposals coming
in from employees and partners. “In the proof-of-technology
phase, a lot of it is seeing whether or
not the technologies that are happening can actually
be assembled to solve the problem you’re thinking
about,” he explains. “We’re looking for about a 50%
yield. Then we involve our customers and other peo-ple
into that process, to make sure that we bring them
in, to make sure it is indeed solving it, and do a proof
of concept with them.” As the innovation moves
through this process, the yields increase as well, he
says. Interestingly, non-tech C-level executives give
their organizations savvier tech ratings than tech
executives do (Fig. C2).
Figure C1. How Executives Perceive Their Organizations’ Use of IT
21% 58%
Leading-edge IT adopter.
We compete at the cutting
edge of innovation, using IT as a
driver for corporate innovation.
We have management
commitment and funding.
Mainstream IT adopter.
We use IT to improve
productivity, product quality
and customer service, but we
generally do not use it to
compete on price or innovation.
21%
Conservative IT adopter.
We compete on the thin edge
of cost margin or economies of
scale. Management regards
IT primarily as a tool for
reducing costs.

Figure C2. How Executives Perceive Their Organizations’ Use of IT—by Title
14%
72%
14% 13%
66%
21%
Leading edge Mainstream Conservative
30%
43%
27% 26%
58%
16%
CEOs CFOs CIOs CTOs
The survey explored the role of technology in
innovation, and perceptions about its role. While exec-utives
agree that technology has not played a starring
role in the past, a majority, 63%, see information tech-nology
as a key part of their organizations’ long-term
plans (Fig. C3).
“It doesn’t have to be technology that drives
that innovation, but increasingly it is,” says David
Kieselstein, CEO of Penton. “The power of mobile, of
apps, of SaaS platforms, of the web, of data capture and
analysis, is driving almost all of the new product devel-opment
that we’re doing within the company now,
which is very far from where this company was even
a few years ago. We actually launched eight new prod-ucts
just in the last three to four months of last year,
leveraging technologies. We also augment the chief
data offi cer’s management suite with a world-class
engineering team.”
Figure C3. Importance of Technology to Business Planning
(Percentage “strongly agreeing” that technology is...)
...a key component of my organization’s plans for growth in the long term (beyond 18 months) 63%
..a key component of my organization’s plans for growth in the short term (coming 12-18 months) 47%
...a key contributor to my organization’s past ability to succeed and grow 28%

Executives were asked about the types of tech-nologies
that are delivering the best results for their
organizations. Customer relationship management
(CRM) systems rank as the top type of technology
investment that will help deliver business growth, cited
by more than one-third of executives. The ability to
better engage with customers, and understand their
requirements across a life cycle, means greater oppor-tunities
to reach new markets (Fig. C4).
In tech circles, security solutions are often seen as
necessary components to prevent damage from data
breaches. Typically, these solutions are not seen as
adding to business growth or productivity. However,
executives take a diff erent view on these types of solu-tions,
ranking them second on the list of technology
delivering value—close to one-third cite data secu-rity
and protection as their best investment for business
growth. This shows an understanding that data secu-rity
solutions deliver potential savings far beyond the
initial investments. The costs of data breaches include
staff time to audit and trace breaches, potential fi nes
from government agencies, costs incurred for notifying
aff ected parties, and potential loss of business due to
lack of confi dence from customers or potential custom-ers
in the security of their information.
Big Data analytics tools are also a top choice
among executives as savvy investments for business
growth. Executives see it as a corporate capability that
will help them glean insights from a range of infor-mation
coming into their organizations, including
machine-generated data from sensors and applications,
user-generated data from social media, on-site collab-orative
environments and productivity applications, as
well as “traditional” structured transactional data.
While cloud computing and analytics are key ini-tiatives
for sizable segments of organizations, there
is also growing interest in related areas. “Today, we
have quite a few eff orts around the Internet of Things
going on,” says Intel’s Goldman. “We also are using
analytics to make user experiences more dynamic in
the future. We try to stay in the lead with technol-ogy
to fi gure out whether there a business case for
it.” However, Goldman adds, even though Intel is a
leader in technology adoption, the company recognizes
that technology is one of several tools in the innova-tion
process. “Technology is an ingredient of the set of
activities,” he says.
Figure C4. Best Technology Investments
for Business Growth
Customer Relationship Management (CRM)
Data security and protection
Analytics tools (leveraging Big Data,
capturing metrics, etc.)
Customer service and support
Cloud computing capabilities
App-development capabilities
IT storage
Digital marketing and
customer communications
Enterprise applications
Digital technologies for
internal collaboration
34%
32%
30%
30%
27%
25%
22%
17%
14%
13%

everything. I think the answer’s usually somewhere in
the middle. We typically go with a 70%-30% blend,
with 70% of our IT capability coming from within.
There are always going to be needs for external sup-port,
and you should be open to that. You’ll have
short-term bursts of volume, you’ll sometimes have
very specifi c technical needs, and certainly it’s very
expensive to always be running at 100% capacity.”
Because innovation is an informal process with
unpredictable results, traditional cost-benefi t analysis
often can be counterproductive. “We don’t do cost-benefi
t analysis up front,” says Rickey Burks, senior
vice president and chief technology and innovation
offi cer at USAA. “We will go far enough to put some-thing
in, and put analytics in it, and do a look back
to see what value we’re getting. So we’re allowed
to go far enough to really explore a particular idea.
Analytics tools
For most of the executives—inside and outside of IT—
customer relationship management is consistently viewed
as the technology area that delivers the greatest value to
business. CTOs, on the other hand, take a diff erent view,
suggesting that analytics tools are the best way organiza-tions
can spend their technology dollars (Fig. C5).
Investment priorities diff er across the major indus-try
segments. For example, CRM does not rank high
among IT or media industry executives, who tend to
see Big Data analytics tools as their most urgent invest-ment
area. Media executives also see IT storage as a key
investment area, and believe outsourcing IT is a key
innovation strategy that often opens up new oppor-tunities.
Outsourcing is part of “achieving the right
balance with technology,” says Penton’s Kieselstein.
“People will swing from left to right, from feeling like
they need to have entirely captive staff s to outsourcing
Figure C5. Best Technology Investments for Business Growth—Preferences by Title
Customer Relationship Customer Relationship Customer Relationship (leveraging Big Data,
Management (CRM) Management (CRM) Management (CRM) capturing metrics, etc.)
Analytics tools
Data security Customer service (leveraging Big Data, Data security
and protection and support capturing metrics, etc.) and protection
1
CEOs CFOs CIOs CTOs
41% 50% 41% 34%
2 38% 37% 30% 34%
Customer service Data security Data security App-development
and support and protection and protection capabilities
3 34% 26% 27% 29%

We don’t have a basis to say what the value’s going
to be. That’s going to empower folks to be creative.
You can’t do everything that way, but a number of
our ideas, we actually move them into production, we
gather the data of what we’re seeing coming back. And
then we stop and work with our business partners to
see if this is something we want to scale.”
Projected 2014 IT spending tracks similarly to the
IT adoption curve. Close to a third of executives expect
their IT purchasing to increase next year, while 23%
expect it to decrease (Fig. C6). The telecommunica-tions
sector will see the most robust spending increases
during 2013, with more than two-fi fths of executives
within this industry foreseeing spending boosts.
Figure C6. Planned Increases in 2014 IT Spending
Decrease by 10% or more
Decrease by 5% to 9%
Decreased by less than 5%
Stay about the same
Increase by less than 5%
Increase 5% to 9%
Increase by 10% or more
1%
1%
21%
47%
15%
10%
5%
Executives have diff erent opinions on the role of IT in business growth. But they all
agree IT is an essential part of this growth. Most see their organizations as lagging
or mediocre in their ability to leverage technology to achieve innovation—and are
willing to make the necessary investments to change that.

TOP PRIORITIES:
MOBILITY AND FULL
ACCESS AT ANY TIME
Customer collaboration and easy, anywhere/anytime access to business
processes are the top technology expansions recommended by exec-utives.
Encouraging—and not fi ghting—the “BYOD” (bring your own
device) trend also ranks high on the list of suggested actions.

The biggest priority companies are acting
on is providing anywhere/anytime access
to business processes—more than half say
they are taking “signifi cant steps” to open
up their processes, and technology helps
provide needed visibility and manageability. This is fol-lowed
by increasing customer interaction and enabling
more fl exible work environments. At the same time,
relatively few are as actively concerned with collabora-tion
and use of any device (Fig. D1).
Executives within the IT and media sectors are
concentrated on creating fl exible work environ-ments,
while fi nancial services executives are focused
on increasing customer interaction. The remainder of
the industry categories are focusing on open access to
technology.
Eff ective business innovation through technology
requires that organizations do a good job looking after
the basic IT requirements, says Goldman. “You have to
run the systems in order to be able to do projects and
activities to advance the business. If you run your sys-tems
well, you move to the next level, which allows
you to partner and innovate with the business. And if
you fail on any of the lower levels, the conversation
goes right back there. Innovation is part of an advanced
relationship with your business lines.”
So how do executives educate themselves about
innovation, to identify their priorities? Overall, infor-mation
about innovation tends to come from traditional
sources. Today’s innovation may encompass transfor-mation
to the digital enterprise, but ironically, business
leaders still turn to traditional venues for more informa-tion
and enlightenment on the topic. Senior executives
turn in the largest numbers to business print publications
to stay up to date with new ideas or ways to innovate. A
majority report these sources as the way they stay on top
of trends, followed by executive conferences or events,
and general interest publications (Fig. D2).
Figure D1. Strategies for Expanding
Technological Capabilities (Percentage
reporting they are taking “significant” steps)
Provide anywhere/anytime access
to business processes
Increase customer interaction
Enable greater collaboration with customers
Enable more flexible work environments
Expand visual collaboration via video
Promote greater collaboration internally
Enable greater collaboration
with suppliers/partners
Allow use of “any device”
55%
44%
29%
43%
33%
33%
30%
47%

Figure D2. How Executives Keep Up-to-Date
With New Ideas or Ways for Their Companies to Innovate
Business print publications
Executive conferences or events
General interest online publications
Technology print publications
General interest print publications
Technology vendors
Reports from analyst firms
Trade shows
Industry- or topic-specific blogs
Peers or colleagues
Social networks
77%
67%
61%
54%
51%
51%
48%
47%
47%
46%
40%
The mobility wave is sweeping through enterprises, and with it, greater access to
technology resources for employees at all levels. This opens up the door to even
greater and more widespread innovation as the workforce gets involved. At the
same time, executives have a wide range of resources available to help them elevate
their roles as catalysts of this new innovation.

CHIEFS HAVE
DIVERGENT VIEWS ON
THE ROLE OF CIO
CFOs are leading the charge for more technology-driven innovation.
Executives are divided on the role of CIOs in the innovation process.
However, everyone agrees that IT leaders need to play a key role in
overall corporate innovation.

The survey revealed the attitudes of various
business leaders toward the role of tech-nology
in innovation, as well as how they
perceive the CIO’s role changing. For the
CIO’s job these days, it’s all about business.
Aligning IT with the business is the main focus area for
CIOs, as indicated by almost half of executives.
While there are some diff erences in perceptions
about the CIO’s role in the evolving enterprise, some
organizations are embracing the partnership role they
need to play. For example, at Pitney Bowes Inc., the
CIO is an equal partner at the management table, says
Roger Pilc, the fi rm’s chief innovation offi cer. “Our
CIO [chief information offi cer] is an incredibly impor-tant
partner to my own organization, in terms of
providing the technologies and the capability that will
help us innovate and create new products for our cus-tomers
more quickly. The same thing is absolutely true
for operations, and services and support, as well as for
the marketing and sales parts of our organization.”
Accordingly, driving business innovation is now
the second-ranked area of focus for CIOs. In addi-tion,
the CIO often also gets directly involved with
business strategy. The leading IT-centric area of
focus—improving IT performance—pops up only in
sixth place among the focus areas (Fig. E1).
Executives across the various categories have dif-fering
perceptions as to what key roles CIOs will be
playing in innovation. CEOs appear to have their
CIOs more pigeonholed into the typical, IT-centric
“CIO role”: namely, aligning IT with the business and
improving IT performance. Overall across the C-suite,
however, the CIO is the one seen as the innovation
leader (Fig. E2).
Some executives believe strongly in the CIO’s role
as a business partner and advisor to the organization.
“IT is a true business partner of our organization,”
says Paul J. Reilly, executive vice president of fi nance
and operations and chief fi nancial offi cer of Arrow
Electronics, Inc. “IT has transitioned to be an inte-gral
part of most organizations. For us, there is a new
level of sophistication for our IT function. And that’s
something that our CIO brings as a partner, provid-ing
thought leadership around social media, clients and
converting data to information.”
Figure E1. What CIOs Should Be Focusing On
Aligning IT with business
Driving business innovation
Refining business strategies
Identifying opportunities for differentiation
Forging IT/business partnerships
Improving IT performance
Ensuring cost control for IT purchases
Leading technology change efforts
Ensuring cost control for the organization
48%
43%
37%
29%
29%
28%
21%
20%
12%

Figure E2. What CIOs Should Be Focusing On—Opinions From the C-Suite
CEOs CFOs CIOs CTOs
Aligning IT Identifying opportunities Refining business Driving business
with business for differentiation strategies innovation
62% 37% 49% 71%
Improving IT Refining business Aligning IT Aligning IT
performance strategies with business with business
1
2 45% 37% 46% 55%
Identifying opportunities Driving business Driving business Forging IT/business
for differentiation innovation innovation partnerships
3 34% 34% 41% 32%
The CIO’s role is rapidly changing—from caretaker of technology assets to partner
in business growth. As organizations increasingly turn to information technology to
successfully carry out their digital journeys, top executives across the board recognize
that technology paves the way forward for their organizations, and that CIOs need to
take a leadership role.

DIGGING DEEPER:
CASE STUDIES
The six case studies that follow provide context, texture and examples
that illuminate the fi ndings of this study.
1 . INT E L COR POR AT ION
2 . P ENTON
3 . AT&T
4 . U SA A
5 . A RROW E L EC TRONI C S
6 . P I TNE Y BOWE S

WE’RE ALL IN THIS TOGETHER:
CHIEF TECHNOLOGY OFFICER
Intel Corporation is one of the world’s leading designers and manufacturers of integrated
digital technology platforms, used in a range of applications, such as personal computers,
data centers, tablets, smartphones, automobiles, automated factory systems and medical
devices. Revenues were $53 billion in the most recent year.
Innovation is not something that comes out of a struc-tured
process, but out of more-spontaneous events.
“There’s no simple, single process of ‘follow these eight
steps and innovation will occur,’” says Ed Goldman, chief
technology offi cer and general manager of strategy archi-tecture
and innovation at Intel IT.
Intel seeks to identify and nurture innovation opportuni-ties
through an internal venture capital fi rm. “Think of it
in terms of a pipeline, and trying to get yields at diff er-ent
points in the pipeline. Within that innovation path,
we break it up into four phases—basic research, proof of
technology, proof of concept, transition to production.”
Goldman works with an internal group within Intel called
IT Labs. While innovation happens across the company,
Goldman’s group “is more focused on what technologies
are coming, and how might they lend themselves to solv-ing
some of our big problems, and trying to evolve the
process such that we can go solve all the issues that will
create a larger business value for Intel.”
Goldman’s IT Labs works with other teams that focus on
product innovation. The role of IT Labs is to introduce a
technology perspective to new ideas. “We partner with
them, so we have interaction across both of those envi-ronments,”
he says. “Our goal is, how do we make Intel
better, faster, cheaper, in delivering what we do for our
products and services, from an Intel IT perspective.”
1 I N T E L C O R P O R AT I O N
K E Y TA K E AWAY
Innovation is not something that comes out of a structured process,
but out of more-spontaneous events.

VIEW FROM THE TOP: CEO
Penton is a professional information services company that engages and informs millions
of professionals every day, helping them decide how to grow and solve their most critical
business challenges. The company runs 65 trade shows and conferences, 145 digital prop-erties,
20 paid data products and 86 print products in fi ve core, scaled sectors.
Many chief executive offi cers are incorporating a new la-bel
in their job descriptions—technology leader. While this
doesn’t necessarily mean CEOs will be learning to write
code or run quality assurance tests anytime soon, the top
executive needs to have a grasp of the power of technol-ogy.
“You can’t aff ord as a CEO to pretend to know what’s
going on vis-a-vis technology anymore,” says David Kie-selstein,
CEO of Penton. “You really need to have a least a
15,000-foot view and understanding of what’s going on.
You can’t truly be expert, but you need to understand the
business dependencies created by leveraging technology,
how to shape technology for user needs, how to create
built-for-purpose opportunities, versus kitchen sink. If
you’re not at least reasonably well versed in that, you’re
going to miss opportunities, you’re going to miss com-petitors
eating your lunch, and ultimately the business is
K E Y TA K E AWAY
Many chief executive offi cers are incorporating a new label in their
job descriptions—technology leader.
going to suff er.”
Technology is playing a key role at Penton, which has
evolved from publishing company to a leading digital and
data services provider. “We have evolved signifi cantly,”
says Kieselstein. “Technology is driving all of the innovat-ing
we’re doing, for the most part. The complexion of the
company has changed a lot, and technology has played a
big role in that transformation.”
The product portfolio keeps rapidly evolving, in large part
due to Penton’s increasing immersion in technology-driv-en
innovation. “In the last two years, almost 40% of the
team is new, because we’re adding new roles and new skill
sets that are oriented towards knowing how to use and
leverage technology. Getting insights to our customers
and leveraging tech and data to launch new products is
so critical to us at Penton that we recently created a new
role of chief data offi cer,” Kieselstein says. “Whether it’s
people that are experts at engaging the social commu-nity,
user interface, SEO and digital product development,
we’re bringing in a lot of new energy.” This isn’t limited
to purely technical talent either, he adds. “In sales, we’re
bringing strategic sellers into the organization who know
how to sell strategic marketing services packages—which
is not off the rack anymore. These packages are more
complicated and more strategic.
“When you’re thinking about accelerating your use of
technology in an organization, you really need to be
thoughtful about not just the technological skill base
you’re bringing, but also the structure—how that group is
going to interact with the rest of the organization,” adds
Kieselstein.
2 P E N T O N

DRIVING DISRUPTION:
3 AT & T
VICE PRESIDENT OF INNOVATION
AT&T is a provider of global telecommunications services, including wireless communica-tions,
local exchange services and long-distance services. Revenues were $127 billion in
“The work plan we adopted two to three years ago was to
radically open up the workspace, everything on wheels,
with no assigned seating or desks or offi ces,” says Abhi
Ingle, vice president of ecosystem and innovation at AT&T
Inc. “This is very diff erent from our history, but it has actu-ally
now been adopted by our corporate real estate team
as the work plan for AT&T’s workspace as we head toward
the year 2020. All the new remodels are happening in this
philosophy.” Along with open, informal workspaces, the
management of the AT&T Foundry is based on the Ag-ile
and Lean methodologies that have been developed
and refi ned over the years within IT environments. And
AT&T’s technology leaders have taken note. “Our Big Data
and emerging business channels teams have actually
co-located in the Foundry, and are taking on completely
Foundry-based methodologies, including the workspace,
the rapid, short design, the user-centric, design-oriented
Agile sprint,” Ingle says. “We even have a word for that—
when we want to get things done fast, quick, innovate, we
say, let’s just ‘Foundry’ it.”
The AT&T Foundry is part of an eff ort within AT&T intend-ed
to open up the innovation process, says Ingle. “We
have a quarter-million employees. That is a strength, but
it’s also a weakness—if a product manager tried to listen
to 250,000 people who were trying to suggest ideas, he
would never succeed.” That’s why AT&T introduced The
Innovation Pipeline, or “TIP.” TIP is “a crowd-sourced pro-gram
that gets employees to sign up, collaborate online
and come and pitch their ideas, and people essentially
crowd-reviewed their ideas.” Currently, up to 130,000
of AT&T’s employees participate in the program, Ingle
says. “At the end of every quarter, we essentially do an
American Idol on them. Think of American Idol meets
Shark Tank—but a much kinder, gentler Shark Tank. The
best ideas, the actual people who put them in get to pitch
them to some of the most senior people at AT&T.”
the most recent year.
K E Y TA K E AWAY
Along with open, informal workspaces, the management of the AT&T Foundry
is based on the Agile and Lean methodologies that have been developed
and refi ned over the years within IT environments.

USAA is a diversifi ed fi nancial services group of companies off ering banking, investing
and insurance to people and families that serve, or served, in the United States military.
The organization serves 10 million members, with annual revenues of $20.7 billion in 2012.
BEST OF BOTH WORLDS:
CHIEF TECHNOLOGY AND
INNOVATION OFFICER
At the United Services Automobile Association (USAA),
one of the largest North American insurance companies,
innovation has always been percolating throughout the
organization, but now technology is being employed to
harness this innovative energy. Such an eff ort requires
leadership from across the enterprise.
“The relationships you build across the organization are
probably the most critical to innovation,” says Rickey
Burks, SVP and chief technology and innovation offi cer.
“It’s more critical than your technical skills. It’s in the re-lationships
of being open and living out with the business
folks, and understanding what business challenges are
there. Because that’s where the creativity begins.”
Over the past year, USAA has created a “more formal
innovation organization that helps get us focused on in-novation
for our business, for our members, for our em-ployees,”
he explains. In his relatively new job role, Burks
reports to the company’s chief information offi cer with his
“chief technology offi cer hat” on, as well as to the chief
administration offi cer with his “chief innovation offi cer
hat.” He observes that the dual role brings together two
teams, one of which is “thinking innovatively and about
disruption,” while a companion team is “thinking about
standards and technology, and how do we keep things
operationally healthy and moving along.”
4 U S A A
K E Y TA K E AWAY
At the United Services Automobile Association (USAA), one of the largest North
American insurance companies, innovation has always been percolating throughout the
organization, but now technology is being employed to harness this innovative energy.

FOLLOW THE MONEY:
CHIEF FINANCIAL OFFICER
Arrow Electronics is a provider of products, services and solutions to industrial and com-mercial
users of electronic components and enterprise computing solutions, including
materials planning, new product design services, programming and assembly services,
inventory management, reverse logistics, electronics asset disposition and a variety of
online supply chain tools. Revenues were $21 billion in the most recent year.
Technology-driven innovation is reaching an important
corner of the enterprise not typically known for innova-tion—
fi nance executives. The most logical starting point
and greatest business value for fi nancial executives is le-veraging
the power of data analytics to look at informa-tion
in new ways.
“Finance teams are usually very good at generating data,”
says Paul Reilly, executive vice president of fi nance and
operations and chief fi nancial offi cer of Arrow Electron-ics,
Inc. “But we need to do better at generating informa-tion
from that data.” At his own company, Reilly says he
has been using data analytics for the past two years for
corporate auditing purposes. Employment of IT tools in fi -
nancial reporting is helping the company “identify, ahead
of the curve, areas of geography opportunity and trans-action
execution trends,” he says.
“The other thing we’re using around technology is data
analytics,” he adds. “We’re evaluating not just short-term
trends, but macro trends over the long term in the global
economy. But that evaluation is being done at a country-by-
country level, as we begin to try to match what our
strengths and capabilities are to developing markets and
developing geography.”
In the process, fi nance is taking a new role in enterprises
by using technology tools to facilitate and promote inno-vation.
“One of the things that fi nance teams are good at
is looking backwards—’here are the results of last month
or last quarter,’” Reilly explains. “Innovation is possible
when we can look forward as well. What does this in-formation
tell me about trends? Do we speed up or slow
down as an organization? Do we identify opportunities
to be more successful in the marketplace? Can we aff ord
to be more aggressive? It’s about telling the story of the
numbers. We can’t do much about the past, but we can
certainly learn from the past, and we certainly can use
that to understand what the future may be for us, and to
capture the future that we want.”
5 A R R OW E L E C T R O N I C S
K E Y TA K E AWAY
Technology-driven innovation is reaching an important corner of the enterprise
not typically known for innovation—fi nance executives.

ACROSS THE ENTERPRISE:
CHIEF INNOVATION OFFICER
Pitney Bowes Inc. is a global provider of software, hardware and services to enable both
physical and digital communications and to integrate those physical and digital communi-cations
channels. The company off ers a range of equipment, supplies, software, services
and solutions. Revenues in the most recent year were $3.9 billion.
At Pitney Bowes Inc., innovation is an enterprise-wide ini-tiative.
Roger Pilc, chief innovation offi cer at Pitney Bowes,
says his newly created position includes all the product de-velopment
across all the business units: more than 1,000
engineers across many geographies, as well as a strategic
technology and innovation center, and enterprise growth
initiatives and technology alliances. Innovation is one of
the key pillars of Pitney Bowes’s strategy, and innovation
is the combination of business insights and technology-based
invention, so he orchestrated the function to be
multifaceted. “It crosses functions, and it crosses business
units,” says Pilc. “It is a very holistic approach.”
Pilc recommends an “outside-in approach” to innova-tion:
“Be very customer- and partner- and sales-centric
in terms of the prioritization of innovation. An innovation
is a combination of business, technology and invention.”
Pilc also advocates having the appropriate management
systems in place—the process “of identifying ideas, vali-dating
them, prioritizing them, commercializing them and
then rolling them out in great business scale.”
6 P I T N E Y B OWE S
K E Y TA K E AWAY
Innovation is one of the key pillars of Pitney Bowes’s strategy, and innovation
is the combination of business insights and technology-based invention.

CONCLUSION
Technology, which is producing so much disruption and so much
opportunity, also serves as a key tool to facilitate innovation. And con-tinual
innovation at every level is now the crucial ingredient that allows
businesses to not merely survive but thrive.
ACKNOWLEDGMENTS
Along with data provided in the survey, Forbes Insights spoke with senior executives at six leading
corporations about their innovation strategies, along with the role of technology.
Forbes Insights and NetApp would like to thank the following individuals for their time and expertise:
Rickey Burks, Senior Vice President and Chief Technology and Innovation Offi cer,
United Services Automobile Association (USAA)
Ed Goldman, Chief Technology Offi cer and General Manager of Strategy Architecture and Innova-tion,
Intel Corporation’s IT Group
Abhi Ingle, Vice President of Ecosystem and Innovation, AT&T Inc.
David Kieselstein, Chief Executive Offi cer, Penton
Roger Pilc, Executive Vice President and Chief Innovation Offi cer, Pitney Bowes Inc.
Paul J. Reilly, Executive Vice President of Finance and Operations and
Chief Financial Offi cer, Arrow Electronics, Inc.

ABOUT
FORBES INSIGHTS
Forbes Insights is the strategic research and thought leadership practice of
Forbes Media, publisher of Forbes magazine and Forbes.com, whose combined
media properties reach nearly 50 million business decision makers worldwide
on a monthly basis. Taking advantage of a proprietary database of senior-level
executives in the Forbes community, Forbes Insights conducts research on a
host of topics of interest to C-level executives, senior marketing professionals,
small business owners and those who aspire to positions of leadership, as well
as providing deep insights into issues and trends surrounding wealth creation
and wealth management.
Bruce Rogers
CHIEF INSIGHTS OFFICER
Brenna Sniderman
SENIOR DIRECTOR
Hugo Moreno
EDITORIAL DIRECTOR
Brian McLeod
MANAGER, NORTH AMERICA
Matthew Muszala
MANAGER
Lawrence Bowden
MANAGER, EMEA
Joe McKendrick
REPORT AUTHOR
Kari Pagnano
DESIGNER
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