The technology department has traditionally been the heart of innovation within a business; new processes and systems are created by IT experts and trickled down to users as required.

However, over the past year or so the game has changed. UK chief information officers (CIOs) now face pressures from a number of significant directions: the finance department, the firm’s line-of business managers and the fast-developing Asian economies.

The financial director demands tight fiscal prudence and more IT leaders are choosing to outsource in-house technology operations.

At the same time, users need on-demand innovation, with CIOs required to create an agile technology process where the technology team listens to the business, rather than the other way round.

Finally, innovation in the UK is being challenged by the up-and-coming technology presence of China and India.

This month’s Computing Business looks at how IT leaders can build the organisation in the face of increasing fiscal prudence, fast-changing user requirements, and global research and development.

The good news suggests UK and other EU member states are showing signs of fighting back against the tidal wave of innovation and patenting in Asia.

At 9.1 per cent, the UK had the highest rate of growth in Europe for international patent filings last year, according to the World Intellectual Property Organisation.

There is, however, much work to be done. Research from consultant Capgemini shows two thirds of CIOs believe IT is critical to business innovation, but only one out of four technology leaders felt their IT function is actually driving business innovation.

The survey suggests there is a risk IT departments will be spectators, rather than participants in the innovation-led evolution.

CIOs need to assert their presence and demonstrate how technology leadership ­ through best practice and operational excellence ­ is crucial to business innovation.

Also IT leaders will need to embrace social approaches to innovation because six out of ten new collaboration-related IT projects will incorporate suppliers, partners and customers by 2009, says analyst Gartner.

Creating a dominant­ but collaborative position on innovation will be no easy task. But the rewards for taking a strong stance are likely to be plentiful.

Further reading

• Growing risk of litigation threatens IT innovation
• The CIO must act now to prevent project lethargy
• How can the CIO gain respect for IT innovation?
• Making best use of Gartner's reports
• CIOs will need to transform to survive
• Modernise to beat IT and skills obsolesence

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Want to contact the writer? Email Mark Samuels