4.7 Conclusion

The role of ICT in enabling innovation has been canvassed extensively in the management, technology and public policy literature (Briggs 2004; Fitzgerald and Wynn 2004; Matthews and Frater 2003; National Academy of Sciences 2003b; OECD 2000). Much of this material takes a generic view of technology and technological change and has a focus on economy wide and industry level concerns. At the enterprise level, the focus tends to be on the opportunities and possibilities captured through the acquisition of ICT hardware, systems and services – rather than on the situations and circumstances where investment decisions are made at the firm, or enterprise level.

In most of the companies interviewed for this study, investors, CEOs and business unit managers could envision how ICT could be used to innovate in all major areas of business activity – in product development, production, process design and supply chain management. They were also aware of the possibilities of relating to suppliers and customers in new ways through new business relationships.

The interviews made clear, however, that existence and availability of technological advances (and novelty) does not necessarily mean that boards and senior management will commit to adoption through an innovation strategy: acquisition, adoption and use of technology will reflect a business decision, based on a wide variety of strategic and environmental considerations.

The study has highlighted the importance of close and effective working relationships between ICT staff, business unit staff and suppliers/customers in realising innovation potential in all aspects of business. The practice-based literature and commentary on innovation establishes that it is a collective, social learning and evolutionary process – not a one-off technical exercise. However, the business profiles undertaken for this study indicate that senior executives have had a key role in driving the innovation process, drawing on and ‘pulling through’ available information and communication technologies.

The study found that companies in specialised and high technology manufacturing areas, such as medical equipment, have developed their own ICT solutions that are incorporated directly into products that deliver higher levels of value to customers. These solutions may be developed within companies’ own research and development (R&D) business units and/or in collaboration with research organisations. However, companies generally outsource ICT maintenance and support functions to specialised ICT developers, providers and service contractors.

On the other hand, for companies, particularly SMEs, that purchase solutions directly from third party vendors, the study identified a risk that poor project specification, inappropriate software selection and missed opportunities to integrate ICT with other aspects of the business operation may adversely impact on the ability of ICT to contribute to business performance. However, in situations where owners and senior managers are skilled in ICT applications and development ICT has been developed, applied and used economically and efficiently.

The study has demonstrated, through the interviews, that ICT-based technological advances will be adopted, applied and used when there is a likelihood that they will result in increased profitability and demonstrated return on investment. In a highly competitive environment where profit margins are thin, managers may have to invest in ICT simply to stay in business.

The study found that it is only when innovations remain unique to a company that it is possible to capture sustained profits. For an innovation to be unique a company will rely on context dependent, tacit and location specific knowledge embedded or manifested in its people, business processes, organisation structures, culture and human behaviour. These are the hardest aspects of an innovation to replicate – not the technology.

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