Is your company facing an innovation gap?

A lot of companies are neglecting to invest in innovative technologies such as advanced and cognitive analytics, the Internet of Things (IoT), and process robotics, while they continue to spend on areas such as cyber security, according to a recent survey of CFOs by advisory firm Grant Thornton LLP.

"Cyber security is one area that represents a clear and present threat and requires direct action," said Kevin Baril, a principal in Grant Thornton's Business Technology and Consulting practice. "It is easy to see the defensive nature of the investment. The investment need is clear, as is its benefit."

Meanwhile, most companies do not have the people, processes and appropriate technology infrastructure to capitalize on digital innovation and transformation, Baril said. "These same companies have not made the initial investment to create the platform for innovation, and [don't] have the necessary human capital capabilities within the organization to assess, realize and deploy solutions in a digital framework," he said. "Therefore there is not a clear investment thesis and no compelling case for action."

Grant Thornton surveyed 404 CFOs and senior financial executives in the US between November 2016 and January 2017, and found that 49 percent of them consider cyber risk an area of greatest need for risk management. More than half (57 percent) report that investment in cyber security/data privacy is underway, while 16 percent said it will be in six months and 21 percent within 12 months.

But at many organizations innovative technologies are not getting as much focus, despite the emphasis on digital transformation.

"Companies should be investing in innovative technologies" including advanced data analytics, IoT and robotics, and understanding the role of data strategically, Baril said. "Applying these innovative technologies utilizing agile, design thinking on cloud and [as-a-service] platforms, in an iterative, rapid manner is critical," he said. "Companies can realize time-to-market and early mover advantages with a properly considered and architected information technology framework."

About half of the CFOs surveyed (49 percent) see business intelligence and analytics as a top area of IT investment, and 42 percent see database systems and management as a top area. Only 4 percent and 17 percent of CFOs consider IoT and cloud computing, respectively, as top areas for IT investment.

What can be done, from a technology and business leadership standpoint, so that companies can invest in and deploy more innovative technologies?

"Companies must develop an overarching digital transformation model for the enterprise," Baril said. "An investment in people, partnerships and organizational change and the willingness to embrace new governance models is critical. Digital innovation requires engagement inside and outside the organization and is much broader than information technology and the IT department."

Much is at stake for those organizations that fail to change their spending strategy when it comes to more innovative technologies.

"Technology strategy and its effective, timely implementation [affect] corporate financial results and competitive position now more than ever," Baril said. Innovative technologies and their insightful application "within the context of a particular business strategy -- enriched with carefully structured data sets -- will play a much more significant role in overall firm results and positioning in the future," he said.